Name and Location
Corsalá district projects, Mexico.

Client
Scorpio Mining.

Project Description
The projects are based on measured, indicated and inferred resources in the Nuestra Señora, El Cajón and San Rafael deposits.

Total measured resources are estimated at 2.21-million tonnes, grading 0.14 g/t gold, 107.1 g/t silver, 3.57% zinc, 1.57% lead and 0.02% copper.

Total indicated resources are estimated at 6.54-million tonnes, grading 0.14 g/t gold, 120.3 g/t silver, 2.07 g/t zinc, 0.84% lead and 0.22% copper.

Total inferred resources are estimated at 982 000 t, grading 0.06 g/t gold, 155.8 g/t silver, 1.42% zinc, 0.63% lead and 0.49% copper.

A preliminary economic assessment (PEA) undertaken on the project assumes continued mining at Nuestra Señora, along with the development of El Cajón and San Rafael underground operations and San Rafael openpit mining.

The PEA proposes:
• the continued mining from Nuestra Señora of 1.5-million tonnes, adding about three-and-a-half years of production at Nuestra Señora, at a reduced rate, from the schedule based solely on the reserve estimate tonnage;
• the expansion of the process plant from 1 500 t/d to 2 750 t/d at the end of 2014, following the ramp-up of El Cajón mine output and at the start of openpit mining at San Rafael in 2015;
• the openpit mining of the San Rafael deposit starting in year three (2015); and
• the development of the San Rafael underground mine to achieve production on the completion of mining at El Cajón (2018).

Value
The capital cost of the project is estimated at $85.3-million.

Duration
Production is based on the continuation of mining at the Nuestra Señora deposit through the first half of year five (2017). Mining of the El Cajón deposit was expected to start late in year one (2013), with expansion of the processing plant coinciding with the ramp-up in production at El Cajón and the start-up of the openpit mining of the San Rafael 120, Main and Upper zones, early in year three (2015). Underground mining at San Rafael would start in year six (2018), on or near the completion of mining at El Cajón. On completion of underground mining from all deposits, in year seven (2019), the openpit production will be expanded to meet the mill requirements through year 11 (2023).

Latest Developments
Underground development work at the El Cajón mine development is proceeding as scheduled. As of the end of May, the portal had been secured and 167 m of ramp had been driven, along with 42 m of lateral crosscut to establish the powder magazine.

The field visit by the Dirección General de Minería to provide surveying evidence of where the boundaries of the company's concessions lie relative to those of a neighbour was scheduled for June 25. As a result, the publication of a prefeasibility study covering the El Cajón project may be postponed to the first quarter of 2015. This is not expected to affect the underground development schedule though.

With the ramp being driven into El Cajón and the subsequent production ramp-up expected to follow later this year, Scorpio is considering alternatives for bringing the development of the San Rafael project forward as an additional source of ore.

Scorpio is reviewing the economics associated with the development of an under-ground operation at San Rafael, instead of an openpit, as suggested in the PEA.

A decision regarding development of an underground mine at San Rafael, in parallel with completion of the plant expansion, could be taken in the first half of 2015, with a delay of about 12 months before expanded production, for completion of additional engineering, development and construction work. This would allow for an increased production rate of about three-million silver equivalent ounces a year and reduced cash and total production costs, to be realised during the first half of 2016.

If a decision to go ahead with the development of the San Rafael underground mine and the associated plant expansion is to be taken, it is envisioned that external funds will be required.

Scorpio has been in informal discussions with third parties that would be interested in extending such financing, likely including an offtake agreement covering the purchase of concentrate production from the Cosalá district operations.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Scorpio Mining VP: investor relations and corporate communications Victoria Vargas, tel + 1 416 585 2200 ext 103 or email vvargas@scorpiomining.com.