Nuestra Senora Operation
| Introduction | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Located in the Cosalá District of Sinaloa State, Mexico, the Nuestra Señora Mine is a fully automated, low-cost underground operation with the benefit of flexible mining methods and diversified metal production. The nearby Nuestra Señora processing facility has an existing capacity of ~1,500 TPD but is expandable up to ~4,000 TPD. The plant produces zinc, copper and lead concentrates; with a significant silver component in the copper and lead concentrates. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current Operations | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| A summary of the operating and financial results for the year ended December 31. 2011 are presented in the Corporation's January 27, 2012 and March 27, 2012 press releases, with complete details provided in the Corporation's 2011 Annual Financial Statements and Management's Discussion & Analysis. 2011 Financial Highlights
2011 Achievements
Since its first year of commercial production in 2009, the Nuestra Señora operation has increased plant throughput by 142%, resulting from a number of key improvements to both mining and plant operations. As reported in the Corporation's January 27, 2012 press release, the 2012 budgeted production based on underground mining at Nuestra Señora using predominantly long hole stoping methods is as follows: 2012 Production Forecast:
OUTLOOK FOR 2012
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| Expansion Plans & Feasibility Study | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| On January 30, 2012, Scorpio Mining announced plans for a major expansion project that is expected to increase current production capacity at its 100% owned Nuestra Señora processing plant by over 80%. Internal engineering and scoping studies carried out in Q3 2011 determined an optimum size of the Nuestra Señora plant expansion from its current capacity of 1,500 TPD to approximately 2,750 TPD, reflecting an increase of over 80%. Phase I of this expansion, which includes engineering, civil works, and the purchasing of long lead time items, is expected to be completed in Q2 2012. The commencement and completion of Phase II, which includes construction and commissioning, will depend on the results of the updated NI 43-101 resource and reserve estimates at Nuestra Señora, El Cajón and San Rafael, drilling results at La Verde and permitting. The total plant expansion is estimated at $20 million and will be funded internally. In addition to the expansion of the Nuestra Señora plant, Scorpio Mining is evaluating the viability of a 4,000 TPD processing facility situated proximal to the La Verde, San Rafael and El Cajón deposits, 17 km north of the existing Nuestra Señora plant by existing road. The study is anticipated to be completed in Q4 2012.
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| Mineral Resource & Reserve Estimate | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| An updated mineral resource and reserve estimate prepared by independent consultant, Genivar Inc. of Val d'Or, QC (Genivar), was released on March 9, 2011. Table 1. Nuestra Señora Mineral Resource Estimate below the 4750 level - October 31, 2010 << Drag to view table >>
Table 2. Nuestra Señora Mineral Reserve Estimate below the 4750 level - October 31, 2010 << Drag to view table >>
Notes:
The estimate includes the results of drilling performed since the Corporation's previous estimate (Sedar filing - Jul 9, 2008) and was updated for prevailing costs and metal prices. Genivar provided separate estimates for above and below the 4750 level of the Nuestra Señora mine (just above Level 8). The extent of historical mine workings by Asarco and later artisanal mining above the 4750 level is uncertain, and future development in this area needs further evaluation. The area below the 4750 level is accessed by current operations and will continue to be the focus of development and extraction. Further details including the general methodology used for the estimation is presented in the Corporation's March 9, 2011 press release. A NI 43-101 technical report (the "Technical Report") supporting the above mineral resource estimate is entitled "Mineral Reseve Update Nuestra Señora" by qualified person, Hugues de Corta,P.Geo. Dated March 28, 2011, the report was filed on SEDAR (www.sedar.com) March 30, 2011 is also available in the Technical Reports section. Review of Mineral Reserve & Resource Estimate As presented in its November 3, 2011 press release, the Corporation identified an unexpected divergence between the Nuestra Señora mineral reserve and resource estimate set out in the Technical Report and the actual mineralization that the Corporation has encountered in the main production areas between Levels 8 and 12 at the Nuestra Señora Mine. The Corporation has encountered ore with lower than estimated lead and copper grades in these production areas, and development and definition drilling has identified lower tonnages relative to what was expected in the Technical Report. In order to better understand this divergence, the Corporation has commissioned a comprehensive update of the Nuestra Señora mineral resource and reserve estimates. As part of this update, in Q3 2011 the Corporation engaged Mine Development Associates, an independent expert, to prepare new resource and reserve estimates that are compliant with NI 43-101 and that take into account the latest information available to the Corporation. The Corporation expects the new resource estimate to be available by the end of Q2 2012. An updated reserve estimate is expected in late Q3 2012 or early Q4 2012. As presented in its March 27, 2012 press release, the Corporation's current assessment of the geology, exploration and production data indicates that the mineral deposit at Nuestra Señora is not as continuous as previously interpreted. The model developed by the Corporation based on the geological information and data available to it at the time, predicted areas suitable for block mining from large stopes. However, geological information and data from actual mining received by the Corporation since the development of such model suggests that the mineral deposit is more variable in distribution and continuity, and more confined in extent than anticipated. Accordingly, management expects a significant reduction in the resource and reserve estimates at the Nuestra Señora Mine. The magnitude of the reduction cannot be accurately quantified at this time. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The Nuestra Señora Deposits | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mineralization in the vicinity of the Nuestra Señora Mine is hosted within four known deposits: Nuestra Señora, Candelaria, Santa Teresa and Santo Domingo. It occurs as carbonate replacement-style (CRD) mantos, veins, chimneys, chimney breccias, and mineralized exo- and endo-skarn within limestone host rocks and granodiorite intrusive. The extent and character of the mineralization on the Nuestra Señora property suggest a large mineralizing system, the potential of which remains underexplored. << Please visit full website to view images. >>  Nuestra Señora Property Geology  Satellite View Looking Southwest Nuestra Señora Deposit In early 2005, the Corporation focused its efforts on underground development and definition drilling of the Nuestra Señora deposit. The program was highly successful, resulting in the discovery of two large mineralized zones (Hoag and Sept 9) adjacent to the main Nuestra Señora zone, and other high-grade lenses peripheral to its extensions. The Hoag and Sept 9 zones do not outcrop at surface but are situated between the Nuestra Señora deposit and the Santo Domingo and Santa Teresa deposits, all of which have surface expressions. There is excellent potential to find other such "blind" (unexposed) mineralized bodies within the immediate area. The following 3-D view shows the location of the Hoag and Sept 9 zones relative to the Nuestra Señora deposit and underground workings.
The current understanding of the mineralized zones and their relation to other deposits in the area is that a series of stacked thrust faults provided the main conduit for mineralizing fluids. Subsequent deformation along the thrust faults created dilational zones, which provided wider structural traps for the emplacement of mineralization. Santa Teresa Deposit & Santa Teresa Extension Zone The surface expression of the Santa Teresa deposit is located 150 m northeast of the Santo Domingo adit and 250 m east of the Nuestra Señora mine. The Santa Teresa Extension zone is parallel to, and southeast of, the Hoag zone. The two zones are linked by the Sept 9 zone, which has been determined to be a mineralized feeder conduit for the emplacement of mineralization into the Hoag and Santa Teresa zones. Candelaria Deposit The Candelaria deposit is situated above the Nuestra Señora mineralization and is connected to the Nuestra Señora mine via an existing haulage ramp. The high-grade nature of the deposit was verified in 2004-2005, where results from 53 underground drill holes returned >300 g/t silver and >1,000 g/t silver in 56% and 22% of sampled intersections respectively (average sampled core length was 2.2 m). The mineralization is variably enriched in other metals, returning best assays of 7.69% copper, 23.51% zinc, 15.21% lead and 13.55 g/t gold. The Corporation is currently developing Candelaria on three levels, and in Q3 2011 excavated 8,500 tonnes of ore grading 202 g/t silver, 2.89% zinc, 1.38% lead and 0.67% copper. Open stope mining will be tested to assess the impact of dilution that results from that bulk mining method. Although the Candelaria mineralization has not been classified in terms of NI 43-101 compliant resources, historical mining by ASARCO in that zone produced 150,000 tonnes of high-grade ore averaging 22 oz/tonne silver, 6.5% zinc, 3.5% lead and 2.8% copper. The irregular geometry of the mineralization impedes delineation of the zone to meet CIM Standard Definitions; as such the estimation of NI 43-101 compliant resources is not currently targeted. The present goal is to establish the Candelaria mineralization as a small-scale production area utilizing mechanized mining techniques. Should mechanized mining result in unacceptable dilution, air-leg mining techniques will be introduced. Santo Domingo Deposit Mineralization within the Santo Domingo deposit is exposed at river level approximately 150 m southwest of the Santa Teresa occurrence. No previous drilling of the deposit has been recorded. Scorpio's initial four surface holes into the deposit returned positive results as reported in the Corporation's July 10, 2007 press release. Future underground drilling of the Santo Domingo will be conducted from the 6th level workings of the Nuestra Señora mine. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Presentations | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 360° View of the Nuestra Señora Mine Workings and River Canyon Topography
This presentation is only available on Scorpio Mining Corporation's full website.
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| Technical Reports | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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