Scorpio Mining finishes Nuestra Senora mill
2008-03-31 11:35 ET - News Release
Mr. Peter Hawley reports
SCORPIO RECEIVES MILL FACILITY CONSTRUCTION COMPLETION CERTIFICATE AND PROVIDES A PROJECT UPDATE ON THE NUESTRA SENORA PROJECT, SINALOA STATE, MEXICO
Scorpio Mining Corp. is providing an update on its progress toward production at the 100-per-cent-owned Nuestra Senora project, Sinaloa state, Mexico.
Peter J. Hawley, chairman, chief executive officer, comments: "The Scorpio team is extremely proud to have reached completion of the Nuestra Senora mill facilities. Considering that the initial groundbreaking for the mill facility was on Aug. 1, 2007, attaining this milestone within a period of only eight months is an achievement that demonstrates the know-how and dedication of the Scorpio team. This extraordinary fast-track timeline is particularly impressive given current mining industry shortages of supplies, components and experienced professionals, including tradespeople. In addition to this feat, the company also cleared and constructed a tailings dam impoundment area, a 34-kilometre power line, 4.8-kilometre water line, mine personnel living complexes and 4.3 kilometres of bypass road, all while underground development and stockpiling of mineralized material continues to progress. At the same time, the geological team has recently delineated some new discoveries and controls of high-grade mineral emplacement that is expected to significantly enhance the grade of the mill throughput in the future, as well as offer more flexibility in mine planning."
Project update
Mill construction
As of March 27, 2008, the company has received the mill facility construction completion certificate sign-off from Exergy Engineers & Constructors Inc., which has overseen the mill construction and precommissioning, and will oversee the commissioning.
From this point in time, the company will proceed with eight scheduled weeks of verification of the equipment and mill commissioning. This will include approximately two weeks of final verification confirming that all equipment is mechanically sound, and that electrical panels and wiring are correctly installed. This will be followed by powering up the facility to check on motors and the rest. This is to be followed by the initial ore processing, including further commissioning for the first three months (April to June), during which time mill throughput will average 500 tonnes per day. The purpose of this preliminary production is to determine the reagent consumption and maximize the recovery of metals. Following these steps, throughput will be increased to 1,000 tonnes per day commencing July, 2008.
Construction of the company's 100-per-cent-owned and dedicated 34-kilometre power line from the main hydro dam to the mill facility has been fully completed, including the building of an electrical substation. It is expected to go live on April 1, 2008.
The two one-million-litre water tanks are full and ready for processing start-up. It is anticipated that 80 per cent of the water used will be recovered for recycling in the process.
Ore stockpile inventory as of the end of February, 2008, was as follows:
Stockpile 1 -- 52,148 tonnes grading 69 grams per tonne Ag, 0.08 gram per tonne Au, 0.25 per cent Cu, 1.42 per cent Pb and 2.55 per cent Zn;
Stockpile 2 -- 22,724 tonnes (assay results pending).
Bypass road -- housing
The 4.3-kilometre Cosala bypass road has been completed. This road was used for moving oversized mill equipment, trailers and the rest for installation at the mill facility, and the future transfer of daily metal concentrates to smelters without impacting the town of Cosala with heavy traffic.
Construction work on the permanent facility camp is 75 per cent complete; final details in progress consist of completion of the installation of doors and windows, roof tiles, and exterior and interior painting. Sewage lines have been connected to Cosala's municipal system with fresh water now being connected.
When finished, the camp will initially house 48 persons in 16 houses and the site allows expansion for further construction. This facility is being built on 14 hectares of land that the company has purchased which is ideally situated on both sides of the company's Cosala bypass road. This purchase of the land is a cost-effective measure allowing the company to build houses for employees and to construct its own core logging and equipment storage facilities rather than rent these facilities.
Currently, land is being cleared and prepared for the construction of a main central office, core logging and equipment storage facilities, which will allow the company to relocate its entire support staff to the new facility.
Tailings pond and dam construction
Tailings dam construction has been completed for phase 1 (first year of production).
The bottom of the tailings receiving pond has been completed and the geomembrane installation is in progress. The tailing facility is now ready to receive material from the milling process.
The contouring of the tailings pond area for the second phase (years two to five) is in progress.
Water supply for the mill
A water supply system consisting of a well by the river, a storage tank, a pumping station and a 4.8-kilometre pipeline to the mill is under construction. The pipeline construction is at 90-per-cent completion.
The pipeline consists of a six-inch-diameter steel pipe along the road with cement holding supports and anchors, whereas the cement water well holding tank consists of an 18-inch-diameter steel pipe under the river bed with three different pipe water feeders that feed the well. In addition, a backup supply of excess clean mine water can also be pumped from level 6 of the mine into the storage tank. The entire infrastructure is 95 per cent complete. The Habitas river flows all year long, thus ensuring a constant flow of water available for the milling process even in the driest months.
The staging storage tank has been constructed on site.
The cement work for the pump station is completed.
Although it is planned to recirculate approximately 80 per cent of the process water, the water supply system will have the capacity to supply 100 per cent of the mill needs.
Underground development
As of the end of March, 2008, a total of 6,769.5 metres of development were done, which includes crosscut and access points of four by four metres. Of this total, 1,804 metres of ramp (section of four by five metres) have been excavated.
During one 10-hour shift, the company is currently capable of moving over 1,550 tonnes of waste/ore from stope development and preparation activities in three zones to the mill site. This only requires eight 12-cubic-metre trucks completing 82 trips per shift, which supports management's view that the company can easily haul from underground the initial 1,000 tonnes per day projected for mill feed.
The initial full-scale mining is planned to start from the lower-grade Hoag zone, where primary and secondary blocks have been outlined. Each primary block contains approximately 23,000 tonnes on level 10.5 and between 30,000 to 45,000 tonnes on level 10. Long-hole drilling of the blocks from the level 10 to level 10.5 (15 metres) began in February, 2008, with the first blasting of blocks begun in March, 2008. In addition, five blocks have been excavated at the bottom and the top, and two of these blocks are currently ready for long-hole drilling; development is continuing to prepare the others.
The Alimak ventilation raise from the sixth level of the Nuestra Senora mine to the Candelaria mine has been completed and installation of the vent fan system will be completed by July.
The up ramp from the third level of the Nuestra Senora mine to the Candelaria mine (located 175 metres vertically above) has advanced 220 metres of the overall 470 metres required to connect with the above Candelaria mine ramp. Once connected, this will allow the company to access the high-grade Candelaria mineralization for the blending of mill feed to increase mill head grades.
Surface and underground exploration
The company currently has three underground diamond drills performing infill delineation drilling for areas of exploitation as well as exploration drilling, which is also targeting the zones outlined by the recent successful surface drilling of the Santa Teresa and Santo Domingo satellite deposits, and based on new exploration models established from underground structural mapping. Recent exploration results in the Santa Teresa extension and below the main northwest zone (Jewel Box area) have been surpassing the company's expectations.
On Feb. 18, 2008, the company completed a geophysical program of down-hole pulse electrical magnetic (DHPEM) surveying to determine if this system will accurately locate known mineralized bodies within the Nuestra Senora project. The survey was successful in identifying the known orebodies, particularly in the main zone. This tool is expected to greatly enhance the company's exploration efforts in underexplored and/or structurally complex areas.
The company is in the final stages of signing commercial smelter agreements and once finalized will inform the public during the next month.
The president, D. Roger Scammell, PGeo, is the company's qualified person for the Nuestra Senora project. Mr. Scammell is responsible for the current exploration and development program, and has reviewed the content of this release.
We seek Safe Harbor.
