Vancouver, May 30, 2017 - 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, 2017 ("Q1"). This press release should be read in conjunction with the Company's condensed interim consolidated financial statements for the three-month period ended March 31, 2017 and its related 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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Brian Lock, CEO, comments, "Despite lower production in Q1 of 2017 compared to Q1 of 2016, operating cash flows increased significantly from Q1 2016. Even though the Company sold slightly fewer ounces in Q1 of 2017 compared to Q1 of 2016, a decrease in gold inventories and higher average realized prices, compared with Q1 last year, were primary factors in the increase in operating cash flow.
Based on the Company's updated mine plan, the Company currently anticipates mining of gold at Mineral Ridge through August 2017. Due to permitting timelines, the Company anticipates production of gold at Mineral Ridge to be 20 - 25,000 ounces through to August 2017 from the Mary LC, Brodie and Bluelite south pits. The Custer pit and other areas for which permitting is outstanding, are not included in this production estimate and will be evaluated for economics of associated mining timelines when permits are received. There can be no assurances that, when the permits are received, production on the Custer Pit and other areas will commence if it is not economically viable to do so. Total cash costs are expected to be $1,050 - $1,100 per ounce of gold sold. This increase in costs is due to the projected lower production level in 2017 while fixed costs remain relatively constant. The 2017 mine plan calls for an average daily production rate of 11,500 tonnes which includes an average of 1,798 tonnes of ore delivered to the crusher on a daily basis over the 226 scheduled mining days. The decreased metal production in Q1 of 2017 is attributed to reduced mining rates, somewhat offset by higher grade and favorable leach pad recoveries.
Proposed exploration activities for 2017, which are dependent on the Company's finances, are intended to include geological mapping, geophysical surveying, sampling and drilling activities at Mineral Ridge's Drinkwater pit, North Springs, Tarantula and Eagle Canyon areas, as well as at the Orleans and the Goldwedge properties. Also included in the proposed exploration activities is an evaluation of potential unrecovered mineralization of the Mineral Ridge leach pad with a view to initiating a feasibility study for building a mill facility to recover additional gold mineralization.
Given the Company's short remaining life of mine, it is taking initiatives as set out above to extend the life of mine at Mineral Ridge. The Company is also currently evaluating various business alternatives which involve re-financing its long-term debt which matures in August 2018 and/or raising additional financing through an equity financing or other types of financing."
Highlights for the First Quarter Ended March 31, 2017:
(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 2016 for a complete definition and reconciliation to the IFRS results reported in the Company's financial statements for Q1 of 2016.
- 5,741 ounces of gold were produced at the Mineral Ridge mine during Q1 of 2017, compared to 8,508 ounces during Q1 of 2016.
- Revenue of $9.9 million, compared to $9.4 million during Q1 of 2016.
- Total cash cost per ounce of gold sold(1) of $876 compared to $801 during Q1 of 2016.
- Mine operating earnings of $2.4 million compared to $1.9 million during Q1 of 2016.
- Net earnings of close to nil ($0.00 basic and diluted per share), compared to $1.1 million ($0.01(2) basic and diluted per share) during Q1 of 2016.
- Adjusted net earnings(1) of $1.5 million ($0.01 basic and diluted per share) compared to $1.1 million ($0.01(2) basic and diluted per share) during Q1 of 2016.
- Adjusted EBITDA(1) of $2.1 million ($0.01 basic and diluted per share) compared to $1.6 million ($0.01 basic and diluted per share) during Q1 of 2016.
(2) This number was adjusted following a change in the calculation of the non-controlling interest's share of MRG's net income (loss). See the section of the MD&A entitled "Equity" for a description of the resulting changes.
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, 2017 for definitions of these terms and a reconciliation of these measures to reported International Financial Reporting Standards ("IFRS") results.
About Scorpio Gold
Scorpio Gold holds a 70% interest in the Mineral Ridge gold mining operation located in Esmeralda County, Nevada with joint venture partner Elevon, LLC (30%). 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 in Manhattan, Nevada, with a fully permitted underground mine and 400 ton per day mill facility. The Goldwedge mill facility has been placed on a care and maintenance basis and can be restarted on short notice.
Scorpio Gold's Chairman, 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
For further information contact:
Chris Zerga, President
Tel: (819) 825-7618
Jag Sandhu, JNS Capital Corp.
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 the short life of the Mineral Ridge mine, the Company receiving approval of its pending permitting applications any forecasts regarding future production or costs related thereto. 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 relating to operation of a gold mine, including unanticipated changes in the mineral content of materials being mined; unanticipated changes in recovery rates; changes in project parameters; failure of equipment or processes to operate as anticipated; the failure of contracted parties to perform; availability of skilled labour and the impact of labour disputes; delays in obtaining governmental approvals; changes in metals prices; the availability of cash flows or financing to meet the Company's ongoing financial obligations; the ability of the Company to refinance its long--term debt; unanticipated changes in key management personnel; changes in general economic conditions; obtaining the required permits to expand and extend mining activities and the life of mine; other risks of the mining industry 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.