Scorpio Gold Reports Financial Results for The Third Quarter of 2018
TSX -V: SGN
206-595 Howe St.
Vancouver, British Columbia
Canada, V6C 2T5
Tel: (604) 678-9639
www.scor piog old .com
News Release No. 264
Scorpio Gold Reports Financial Results for The Third Quarter of 2018
Vancouver, November 28, 2018 - Scorpio Gold Corporation (“Scorpio Gold” or the “Company”) (TSX-V:
SGN) announces its financial results for the third quart er (“Q3”) ended September 30, 2018. This press
release should be read in conjunction with the Company’s conde nsed interim consolidated financial
statements for Q3 and Management’s Discussion & Analysis (“MD&A”) for the same period, available on
the Company’s website at www.scorpiogold.com and under the Compa ny’s name on SEDAR at
www.sedar.com. All monetary amounts are expressed in US dollars unless otherwise specified.
PERFORMANCE HIGHLIGHTS:
Q3 2018
Q3 2017
Nine Months
2018
Nine Months
2017
$ $ $ $
Revenue (000’s) 2,2 11 6, 042 7,729 22 ,216
Mine operating earnings
(loss) (000’s) 916 (1,088) 2,923 2,432
Net (loss) earnings (000’s) 415 (2 ,774 ) 805 (3,019 )
Basic and diluted (loss) earnings
per share 0.00 (0.02) (0.00) (0.02)
Adjusted net earnings
(loss) (1) (000’s) 420 (928) 1,146 997
Adjusted basic and diluted net
earnings (loss) per share (1) 0.00 (0.01) 0.00 0.00
Adjusted EBITDA (1) (000’s) 644 26 1,872 3,0 58
Adjusted basic and diluted
EBITDA per share (1) 0.00 0.00 0.01 0.02
Cash flow from operating
activities (000’s) 662 1,037 1,855 3,601
Total cash cost per ounce of gold
sold (1) 721 1,209 804 991
Gold ounces sold 1,825 4,827 6,0 25 17,954
Gold ounces produced 1,627 4, 935 6,187 15,336
(1) This is a non-IFRS measure; refer to Non-IFRS Measur es section of this press release and the Company’s
Management Discussion & Analysis for Q3 of 2018 for a compl ete definition and reconciliation to the IFRS
results reported in the Company’s financial statements for Q3 of 2018.
Highlights for the Third Quarter Ended September 30, 2018 and Subsequent Event:
1,627 ounces of gold were produced at the Mineral Ridge mine dur ing Q3 of 2018, compared to
4,935 ounces during Q3 of 2017.
Revenue of $2.2 million, compared to $6.0 million during Q3 of 2017.
Total cash cost per ounce of gold sold (1) of $721 compared to $1,209 during Q3 of 2017.
Mine operating earnings of $0.9 million compared to a mine operating loss of $1.1 million during
Q3 of 2017.
Net earnings of $0.4 million ($0.00 basic and diluted per sh are), compared to a net loss of $2.8
million ($0.02 basic and diluted per share) during Q3 of 2017.
Adjusted net earnings (1) of $0.4 million ($0.00 basic and diluted per share) compared to an adjusted
net loss of $0.9 million ($0.01 basic and diluted per share) for Q3 of 2017.
Adjusted EBITDA (1) of $0.6 million ($0.00 basic and diluted per share) compar ed to close to nil
($0.00 basic and diluted per share) during Q3 of 2017.
In November 2018, the Company requested and received from its lender an extension to December
19, 2018 of the maturity date of its senior secured debt, subject to certain conditions.
Highlights for the Nine Months Ended September 30, 2018:
6,187 ounces of gold were produced at the Mineral Ridge mine, compa red to 15,336 ounces
produced during the nine months ended September 30, 2017.
Revenue of $7.7 million, compared to $22.2 million during the nine months ended September 30,
2017.
Total cash cost per ounce of gold sold (1) of $804, compared to $991 during the nine months ended
September 30, 2017.
Mine operating earnings of $2.9 million, compared to $2.4 million during the nine months ended
September 30, 2017.
Net earnings of $0.8 million ($0.00 basic and diluted per sha re), compared to a net loss of $3.0
million ($0.02 basic and diluted per share) during the nine months ended September 30, 2017.
Adjusted net earnings (1) of $1.1 million ($0.00 basic and diluted per share), compared to $1.0
million ($0.00 basic and diluted per share) during the nine months ended September 30, 2017.
Adjusted EBITDA (1) of $1.9 million ($0.01 basic and diluted per share), compared to $3.1 million
($0.02 basic and diluted per share) million during the nine months ended September 30, 2017.
Going Concern and Extension of Debt Maturity Date
The Company’s only source of revenue, the 70% owned Mineral R idge mine, suspended mining in
November 2017 as the Company had mined all of its economical m ineral reserves based on gold pricing
and heap leach recovery parameters. Remaining reserves are determined uneconomical to continue mining
with the existing processing infrastructure due to higher associated strip ratios and heap leach recoveries
and will require higher gold prices or mill processing to be considered economical. Management expects
to generate limited revenues from residual but diminishing gol d recoveries from the leach pads
(1) This is a non-IFRS measure; please see Non-IFRS performance measures section.
approximately through Q1 of 2019. As a result, the Company’s revenues from operations have been and
continue to be adversely affected, and cash flow from op erations will soon be insufficient to support the
Company.
In addition, the principal amount of $6.0 million of the Company’s senior secured debt matured on August
13, 2018. Since the Company was not in a position to repay the $6 million debt at that date, it requested
and received from its lender extensions of the maturity date of its debt agreement, the most recent of which
extended the maturity date to December 19, 2018, subject to certain conditions. For more information, see
the Company’s press release dated November 8, 2018.
In light of this situation, the Company does not expect that it will be able to generate sufficient cash flows
from its operations to continue as a going concern in the nea r future. The Company will need to raise
additional capital to support its operations and to sett le its long-term debt. The Company is currently
evaluating various business alternatives, which include a potential sale transaction, a business combination,
or refinancing its long-term debt and raising the required c apital to support its operations and for the
construction of a new processing facility at the Mineral Ridge mine
Outlook
The Company’s main focus is to identify potential sale transactions, business combinations, or opportunities
to raise sufficient financing to improve its financial p osition and to re-finance its senior secured debt
obligations and to allow it to proceed with the construc tion of a new processing facility at Mineral Ridge
with a view to process heap leach materials and additional open-pit mineral reserves.
NON-IFRS MEASURES
The discussion of financial results in this press release includes reference to Adjusted net earnings, Adjusted
EBITDA, Total cash cost per ounce of gold sold which ar e 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 and nine months periods ended September 30, 2018 for
definitions of these terms and a reconciliation of these m easures to reported International Financial
Reporting Standards (“IFRS”) results.
About Scorpio Gold Corporation
Scorpio Gold holds a 70% interest in the producing Mineral Ri dge gold mining operation located in
Esmeralda County, Nevada with joint venture partner Elevon, LLC (30%). Mineral Ridge is a conventional
open pit mining and heap leach operation. Mining at Minera l Ridge was suspended in November 2017;
however, the Company continues to generate limited revenues from residual but diminishing recoveries
from the leach pads. 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 an d maintenance basis and can be restarted
immediately when needed.
Scorpio Gold’s Chairman, Peter J. Hawley, P.Geo., is a Qualified Person as defined in National Instrument
43-101 and has reviewed and approved the content of this release.
ON BEHALF OF THE BOARD
SCORPIO GOLD CORPORATION
Brian Lock,
Interim CEO
For further information contact:
Chris Zerga, President
Tel: (604) 678-9639
Email: [email protected]
Website: www.scorpiogold.com
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the T SX Venture
Exchange) accepts responsibility for the adequacy or accuracy of this release.
The Company relies on litigation protection for "forwa rd-looking" statements. This news release contains forwar d-looking
statements that are based on the Company’s current expe ctations and estimates. Forward-looking statements are f requently
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 to identify potential sale or business combination transactions, seek and obtain sufficient financing
to improve its financial position, to re-finance its long-term debt and to construct a new processing facility at Mineral Ridge, plans
to re-commence mining operations and to plans with respec t to the development and exploitation of its Mineral Ridg e mine,
including 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 a ctual events or results to differ materially from es timated or
anticipated events or results implied or expressed in such forward-looking statements, including risks relating to compliance with
various agreements related to its long term debt, to operation of a gold mine, including the availability of cash flows or financing
to meet the Company’s ongoing financial obligations; the inability of the Company to re-finance its long-term debt obligations;
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; obtaining the required permits to expand and extend mining activities; delays in
obtaining governmental approvals; changes in metals pric es; unanticipated changes in key management personnel; chang es in
general economic conditions; other risks of the mining indus try and those risk factors outlined in the Company’s Managem ent
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 reli ance should not be put on such statements due to the inherent
uncertainty thereof.