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Scorpio Mining Corporation announced its unaudited financial and operating results for the first quarter of 2011.
Parviz Farsangi, President & CEO comments, "We are very pleased to report record production of all metals in the first quarter of 2011 and a further substantial increase in mine operating earnings from our turnaround quarter, Q4 2010. Combined with a strong operational cash flow and relatively low operating cost, Scorpio Mining is well positioned among the best performing silver producers with significant base metal by-product credits in Mexico. We are committed to continue building on our current assets with an aggressive exploration program in 2011 and planned plant expansion." Highlights for the First Quarter Ended March 31, 2011 and Subsequent Events: • The Corporation achieved record mine operating earnings of $12.5 million in Q1 2011, an increase of 823% over mine operating earnings in Q1 2010 and 123% over mine operating earnings in Q4 2010. • Net earnings were $6.6 million or $0.03 per share (basic) for Q1 2011 compared to $18.6 million or $0.17 per share (basic) for Q1 2010. The Q1 2010 net earnings included a $19.8 million gain on dilution and deconsolidation of Scorpio Gold Corporation. Basic earnings per share of $0.09 in Q4 2010 was due to the inclusion of $12.4 million of non-cash corporate tax recoveries. • Adjusted EBITDA increased 483% to $11.6 million in Q1 2011 compared to $2.0 million for Q1 2010. • Cash flow from operating activities increased by 506% to $10.8 million in Q1 2011, primarily as a result of higher production, higher grades and better metal prices compared to Q1 2010. • Underground ore production in Q1 2011 increased 14% over Q1 2010 to 113,826 tonnes. • The Nuestra Señora plant processed 122,062 tonnes in Q1 2011, a 32% increase over Q1 2010. • Processed head grades during Q1 2011 averaged 115 g/t silver, 2.49% zinc, 0.98% lead and 0.42% copper compared to 88 g/t silver, 2.07% zinc, 1.17% lead and 0.25% copper during Q1 2010. • In Q1 2011, contained metals produced in concentrates amounted to 368,866 ounces of silver, 5.856 million pounds of zinc, 731,000 pounds of copper and 1.835 million pounds of lead; reflecting increases from Q1 2010 of 89%, 68%, 161% and 2%, respectively. • Total cash operating cost per silver equivalent ounce in Q1 2011 was US$7.10 (Q1 2010: US$8.12) based on silver equivalent ounces of 737,833 (Q1 2010:419,681). • Revenue from metal payable for the quarter totalled $20.8 million (Q1 2010: $7.9 million) and was distributed as follows: silver 53% (2010: 38%); zinc 23% (2010: 33%); lead 9% (2010: 21%); copper 15% (2010: 8%). • Following the construction of a new power line and the installation of a sub-station, the Nuestra Señora mine was energized from the national electrical grid on January 19, 2011. This has reduced the mine's dependence on diesel-generated power. • On March 9, 2011, the Corporation announced an updated mineral resource and reserve estimate at its Nuestra Señora mine. The proven and probable reserves increased to 2.764 million tonnes, providing an estimated mine life of six years at current production levels. • During Q1 2011, Scorpio Gold issued 21.9 million shares, none of which were subscribed for by the Corporation. This resulted in the Corporation's investment in Scorpio Gold decreasing from approximately 35% to approximately 27% and creating a gain on dilution recorded in the statement of operations of $1.1 million. On March 24, 2011, the Corporation sold 8,139,568 shares of Scorpio Gold for proceeds of $5.2 million. Following this transaction, Scorpio Mining still holds approximately 19.8 million shares in Scorpio Gold, representing 19.6% of Scorpio Gold issued and outstanding shares. • As of March 31, 2011, the Corporation had $27.7 million in cash, compared to $12.6 million as of December 31, 2010. The Corporation used existing cash to repay the $20 million outstanding convertible debentures at maturity on May 5, 2011. More information, click here. |
