Vancouver, October 13, 2009 - Scorpio Gold Corporation (TSX-V: SGN) is pleased to announce that it has entered into a binding agreement to purchase the current 8 percent (8%) net smelter royalty (NSR) which applies to 48 unpatented claims on the Mineral Ridge, Nevada property from the owner, Mary Mining Trust for US$3,000,000. Subject to regulatory approval, and concurrent with acquisition of a joint venture interest in the Mineral Ridge property from Golden Phoenix Minerals, Scorpio Gold will pay US$3,000,000 in cash at the closing to acquire the royalty.
Peter J. Hawley, CEO, Director reports; "The purchase of this underlying royalty from Mary Mining Trust on the Mineral Ridge gold property will only help to enhance the economics of the project and allow the Company to move quickly towards the finalization of a definitive joint venture agreement with Golden Phoenix Minerals. The preparation of a 43-101 technical reports which will include a NI 43-101 resource estimate followed by a full feasibility study has been advancing rapidly with surface reverse circulation and diamond drilling of the mineralized open pit areas nearing completion. In addition metallurgical work being performed by Kappes Cassiday is well underway with the bottle roll testing completed and assay results awaited from the 40 barrels of material from the mineralized leach pad material to determine if the leach pad still has recoverable gold."
Given the property's existing permits, bonding, and infrastructure, Mineral Ridge is considered to be a potential turn-key mining operation and Scorpio Gold looks forward to the reactivation of mining operations at the Mineral Ridge project in a relatively short period of time once the Definitive Agreement is in place with Golden Phoenix Minerals for the acquisition of a majority joint venture interest in the Mineral Ridge property and financing is arranged.
The Mineral Ridge project, a former producer, is located about 30 miles west of Tonopah, Nevada and has historically produced almost 575,000 ounces of gold which includes approximately 170,000 ounces from open pit and approximately 405,000 ounces from underground mining operations. The property is currently bonded and has been permitted for heap leach gold processing and production, and was in production as recently as 2005. The mine project comprises 65 patented and 130 unpatented mining claims covering 2,590 acres, and hosts multiple gold bearing structures, veins and bodies. It features a well-developed infrastructure consisting of roadways, power grid, heap leach pad, crushing circuit, ADR plant, water supply, maintenance shop, refuelling and storage facilities and administrative buildings.
Mineral Ridge has had a clean operating history and no environmental, permitting, legal, taxation, marketing or political factors are known that may impact the mineral resource estimates to be outlined in the planned NI 43-101 technical report and the NI 43-101 feasibility report. The dry climate and non-acid generating character of the rock should offer favourable conditions for mining and reclamation operations.
Completion of the acquisition of an anticipated 70% joint venture interest in the Mineral Ridge property remains subject to a binding definitive agreement, regulatory approvals, required financing and other customary closing conditions. See the Company's news release of June 22, 2009 for more details of the Company's agreement with Golden Phoenix.
For additional information please see the Company's website at www.scorpiogold.com
Mr. Peter Hawley, PGeo, is the Company's Chief Executive Officer and Qualified Person for the various Company projects. He is responsible for the current exploration and development programs and has reviewed the content of this release.
ON BEHALF OF THE BOARD
SCORPIO GOLD CORPORATION
Peter J. Hawley,
Chief Executive Officer and Director
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
The Company relies on litigation protection for "forward-looking" statements. This news release contains forward-looking statements that are based on the Company's current expectations and estimates, including statements as to future sales. Forward-looking statements are frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate", "suggest", "indicate" and other similar words or statements that certain events or conditions "may" or "will" occur, and include, without limitation, statements regarding the Company's plans with respect to the exploration and development of its projects. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause actual events or results to differ materially from estimated or anticipated events or results implied or expressed in such forward-looking statements, including those risk factors outlined in the Company's Management Discussion and Analysis for the year ended December 31, 2010 as filed on Sedar. Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise. Forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein.