Vancouver, May 20, 2014 - Scorpio Gold Corporation ("Scorpio Gold" or the "Company") (TSX-V: SGN) is pleased to announce its financial results for the first quarter ended March 31, 2014 ("Q1"). This press release should be read in conjunction with the Company's condensed consolidated interim financial statements for the three-month period ended March 31, 2014 and Management Discussion & Analysis for the same period, available on the Company's website at www.scorpiogold.com and under the Company's name on SEDAR at www.sedar.com. All monetary amounts are expressed in US dollars unless otherwise specified.
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Peter Hawley, CEO, comments, "The Mineral Ridge operation has posted another strong quarter, producing 10,294 ounces gold at a cash cost of $794 per ounce of gold sold, and is well on track of the Company's 2014 production forecast of 40,000 to 45,000 ounces gold at a cash cost of $800 to $850 per ounce of gold sold. Our focus remains on operational excellence, and I am very proud of the team's continued ability to deliver solid results despite a lower average gold price."
Highlights for the First Quarter Ended March 31, 2014:
(1) This is a non-IFRS measure; refer to Non-IFRS Measures section of this press release and the Company's Management Discussion & Analysis for Q1 of 2014 for a complete definition and reconciliation to the IFRS results reported in the Company's financial statements for Q1 of 2014.
- 10,294 ounces of gold were produced at the Mineral Ridge mine during Q1 of 2014, compared to 7,411 ounces during Q1 of 2013. This 39% increase is primarily caused by the fact that production numbers for Q1 of 2013 were negatively impacted by the prior sale of approximately 1,878 ounces of gold and 759 ounces of silver as part of a sale of loaded carbon that accelerated production and revenue in Q4 of 2012.
- Increased revenues of $13.2 million compared to $11.7 million during Q1 of 2013, due to a 46% increase in ounces of gold sold offset by a lower average gold price during Q1 of 2014.
- Total cash cost per ounce of gold sold(1) of $794 compared to $774 during Q1 of 2013 representing a 3% increase.
- Higher production levels during Q1 of 2014 did not completely offset the decrease in the average gold price which consequently negatively impacted the following:
- Mine operating earnings(1) of $1.3 million compared to $3.6 million during Q1 of 2013, mainly due to the lower average gold price during Q1 of 2014.
- Net earnings and adjusted net earnings(1) of $0.4 million ($0.00 basic and diluted per share), compared to net earnings and adjusted net earnings of $2.1 million ($0.01 basic and diluted per share) during Q1 of 2013.
- Adjusted EBITDA(1) of $3.9 million ($0.02 basic and diluted per share) compared to $6.9 million ($0.04 basic and diluted per share) during Q1 of 2013.
- Receipt of approval for the new plan of operations at the Mineral Ridge mine in February 2014 which allows for the planned expansion of the Mary pit.
- Sale of the Pinon property on March 5, 2014, with approximately $5.2 million of the proceeds from such sale being applied to reduce the Company's long term debt to less than $6 million as at March 31, 2014.
The discussion of financial results in this press release includes reference to Adjusted EBITDA, Total cash cost per ounce of gold sold and Adjusted Net Earnings, which are non-IFRS measures. The Company provides these measures as additional information regarding the Company's financial results and performance. Please refer to the Company's MD&A for the three months ended March 31, 2014 for definitions of these terms and a reconciliation of these measures to reported IFRS results.
About Scorpio Gold Corporation
Scorpio Gold holds a 70% interest in the Mineral Ridge gold mining operation located in Esmeralda County, Nevada with joint venture partner Waterton Global Value L.P. (30%), and is currently entitled to receive 80% of cash flow generated. Mineral Ridge is currently in production as a conventional open pit mining and heap leach operation. The Mineral Ridge property is host to multiple gold-bearing structures, veins and lenses at exploration, development and production stages. Scorpio Gold also holds a 100% interest in the advanced exploration-stage Goldwedge property and processing facility in Manhattan, Nevada. The Company is assessing its exploration plans for the Goldwedge property as well as the potential for toll milling at the Goldwedge plant currently permitted for 400 ton per day.
Scorpio Gold's CEO, Peter J. Hawley, PGeo, is a Qualified Person as defined by National Instrument 43-101 and has reviewed and approved the content of this release.
ON BEHALF OF THE BOARD
SCORPIO GOLD CORPORATION
Peter J. Hawley,
For further information contact:
Steve Roebuck, President
Tel: (819) 825-7618
Jim Macdonald, Torrey Hills Capital
Tel: (858) 456-7300
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. 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, development and exploitation of its Mineral Ridge project, including potential further exploration or development of the Solberry satellite deposit, any potential expansion of the current pit shell outline thereof, and any potential increase in the mineral resource estimate in respect thereof. 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 risks involved in mineral exploration and development programs and those risk factors outlined in the Company's Management Discussion and Analysis 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 thereof.