Resource World Magazine

MINI NG SCORPIO GOLD planning growth at Mineral Ridge by Mike Kachanovsky Scorpio Gold Corp. [SGN-TSXV] was established as a junior gold producer with a bias for growth. The company secured 70% ownership of the Mineral Ridge Project in 2010. Located in southwestern Nevada within the Walker Lane Trend, the property area once hosted numerous operating gold mines, some of which were significant producers dating back more than 100 years. In more recent times, a larger deposit area of near-surface, lower grade gold had been mined as an open pit operation that was suspended in the 1990s due to low metals prices. However, the large remnant resources and the potential for new discovery warranted reactivating the mine when metals prices rebounded. Mineral Ridge operates as an open pit mine, accessing a gold and silver-bearing structural feature along the down slope of a shallow ridge. This presents advantages in terms of lower mining costs and a lower strip ratio since the 'pit wall' is always open as mine development advances down to lower elevations of the slope. The company utilizes the services of a mining contractor to handle the extraction and transport to the processing plant. This means Scorpio Gold does not have the high capital expenditure that goes with owning and operating its own fleet of heavy equipment, nor the additional expense of managing a large labour force. 36 www.resourceworld.com However, the flipside to this plan is that operating costs are higher overall on a per-tonne basis. To offset mining costs and report robust operating margins, it is essential to achieve optimum efficiency. During the early phases in 2010 and through 2011, Scorpio encountered difficulties to deliver production numbers that were in line with the design performance of the processing plant. The key to being successful with a small mine comes down to being effective at problem solving. Management reviewed all phases of the operation and came up with a plan to generate improvements. The company subsequently enacted a program to improve efficiency in all areas. Enhanced supervision and mining practices at the pit has led to better grade control. New mineralized zones have been developed to increase overall production. The increased ore stacking height on the leach pad required greater water volume for proper cyanide leaching, so the company drilled a new high-volume water well to double the amount of water available for processing. A new, fully automated, crushing plant was designed from the ground up with high efficiency and greater capacity. This plant uses state-of-the-art technology to allow easier access for maintenance, to reduce down time, and minimize dust. It will allow Mining operations underway at the main pit, Mineral Ridge. Photo courtesy Mike Kachanovsky. INSERT: State of the art crushing plant at Mineral Ridge that recently commenced commercial operations. Photo courtesy Scorpio Gold. higher volumes of rock to be processed with lower unit costs and better control of particle size output. The plant was also designed to enable easy disassembly and relocation to other project areas, to extend its service life when mining activity eventually winds down at Mineral Ridge. As the production level has increased, the emphasis is now shifting to increasing the resources of the operation to extend the mine life. There is no shortage of targets for potential discovery zones on the property area but extending the current pit resource is the first priority. Drilling work completed during 2013 has been successful, with more than 85% of the drill holes encountering significant mineralization, highlighted by an interval of more than 21 metres grading 5.17 g/t gold. Looking ahead, Scorpio Gold has planned its future growth around a major acquisition it announced in 2012. The company was able to purchase 100% ownership of two attractive projects within its core operating area of Nevada. The Goldwedge property is located just over an hour to the northeast of Mineral Ridge, and similarly encompasses a historic mining camp with numerous old mine workings and gold resources remaining from a past-producing mine. There is also a functioning mill and recovery plant on the property that is currently being refurbished. SEPTEMBER 2013

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