Interview with Chris Zerga, President of Scorpio Gold Corporation (TSX-V: SGN): 70% Interest in the Operating, High-Grade, Mineral Ridge Open-Pit, Heap-Leach Gold Mine in Esmeralda County, Nevada
|
By Dr. Allen Alper, PhD Economic Geology and Petrology, Columbia University, NYC, USA
on 12/21/2016
Scorpio Gold Corporation (TSX-V: SGN) holds a 70% interest in the operating, high-grade,
Mineral Ridge open-pit, heap-leach gold mine in Esmeralda County, Nevada, politically safe,
pro-mining area in the US. They have produced over 180K ounces of gold since January 2012.
We learned from Chris Zerga, president of Scorpio Gold, that Mineral Ridge has been mined
since the 1860s and historically there's been 9,731,118 ore tons mined with 954,404
contained ounces. The Mineral Ridge property has over 52 miles of underground workings and
462,025 of the total ounces mined were from those workings. The oxide ore, from this mining,
was processed utilizing standard milling technics and when coupled with cyanide leach
achieved 95 percent recovery of the contained gold.
Scorpio Gold is open-pit mining through underground historic workings and the ore from
this mining is processed utilizing four stages of crushing. When the ore is placed on the
lined heap-leach pad it is the consistency of coarse beach sand and recovers 67 percent of
the contained gold after 120 days of cyanide leaching. The Mineral Ridge property is
considered a high-grade oxide-leach property, as the historic gold extracted from open-pit
mining averages 0.060 opt with typical cutoff grades running 0.020 opt.
Allen Alper: This is Dr. Allen Alper, Editor-in-chief of Metals News,
interviewing Chris Zerga, President of Scorpio Gold.
Allen Alper: Could you update our viewers on Scorpio Gold?
Chris Zerga: Scorpio Gold continues producing gold from its Mineral Ridge
property. We are in our fifth year of commercial production and continue to produce 30,000
to 40,000 ounces yearly while further defining mineable resources, meeting production
guidance and keeping our costs competitive. We also own the Gold Wedge property, which hosts
a fully permitted underground mine and a 400 ton per day wet mill with gravity recovery
circuit. The property is currently on care and maintenance, while we systematically define
our land package through surface sampling and a ground magnetic/VLF electromagnetic survey.
In 2015, the milling circuit underwent rehabilitation efforts in order to support grinding
of high grade ores from the Mineral Ridge property. Recently, management has been in
discussion with external parties requesting toll milling through the Goldwedge facility.
Allen Alper: Could you tell me a bit about what makes your properties of
interest?
Chris Zerga: The Mineral Ridge property should be of interest to your viewers
because the property has historically been mined since the 1860’s with nearly 1,000,000
ounces being mined. The Mineral Ridge property is located in mining friendly Nevada and the
land package consists of 5,010 hectares (12,380 acres) with 616 mining claims. We have been
in commercial production since 2012 and produced 180,000 ounces while keeping costs
competitive. Recent drilling continues to define mineable resources and the potential to
find resources that were missed by historic miners. The ore associated with Mineral Ridge is
oxide ore and heap leaching is a low cost recovery method. All our ounces produced are
unhedged which allows for exposure to market rise.
The Goldwedge property should be of interest to your viewer because it lies within the
Walker Lane Gold Belt and is situated on the southern periphery of the Manhattan Caldera,
approximately 16 kilometers south of the 15 million ounce Round Mountain Mine. The property
has a permitted underground mine with a 400 ton per day milling facility and gravity
recovery circuit. Recent surface sampling within Scorpio’s Goldwedge land package has been
very successful and will be further defined with a planned surface drilling program. The
area had a non-compliant resources associated with it that was completed in 1997. Nevada
gold fields and New Concept Mining reported 220,652 grading .193 opt or 42,584 ounces
contained on the Jumbo pit. The Keystone pit had a resource of 415,000 tons, grading .272
opt, or 113,000 ounces. Again, these resources are non 43-101 compliant and we want to get
in there and do some drilling in that area to define that resource and bring it into
compliancy.
Allen Alper: That sounds excellent. Sounds like excellent potential.
Chris Zerga: Yes, we really believe it does have good potential.
Goldwedge Surface Sampling Program with Structural Interpretation and Grade Heat
Map
Allen Alper: Could you tell me a bit about the reserves and resources?
Chris Zerga: At Mineral Ridge we continue to produce ounces, while defining
mineable resources. In 2016, a majority of the mining occurred in the Mary LC deposit.
Mining also occurred in the Brodie, Bluelite, Solberry and Missouri satellite areas, which
are all located west of the Mary LC pit and lie in close proximity to the leach pad. The
Bluelite and Brodie satellite pits have remaining resources associated with them and are
scheduled to be mined in 2017, along with continued mining in the Mary LC pit. Exploration
drilling in 2015, followed by infill drilling in 2016, further defined the Custer resource,
which was the first new discovery at Mineral Ridge and is currently being permitted for
mining to begin in Q4 of 2017. The LOM projects - the mine life at Mineral Ridge extending
into Q2 2018.
Scorpio Gold’s management fully expects that positive results from 2016 exploration will
extend the current life of mine at Mineral Ridge.
Allen Alper: Could you tell me a little bit about yourself and your team?
Chris Zerga: Yeah, absolutely. The team consists of a seasoned group of
individuals with a diverse background in exploration, mining, operations and permitting.
This group is directly responsible for the success achieved to date and is also aided by a
very knowledgeable corporate team and board of directors. I would direct you to our website
www.scorpiogold.com for a list of the management team as well as directors.
Allen Alper: Looks like you have an excellent and a very strong team there.
Chris Zerga: We really believe we have a strong senior management team along with
a diverse group of corporate directors.
Allen Alper: Could you tell me a little bit about your share and capital
structure, and where your stock is listed?
Chris Zerga: We have outstanding shares of 124.9 million shares, 10.9 million
shares optioned. We have a market cap of 10 million, and our working capital is currently 10
million. That was as of September 30th 2016.
Allen Alper: Sounds like you're in a good cash position.
Chris Zerga: Yes we are.
Allen Alper: What are the primary reasons our high-net-worth readers/investors
should consider investing in your company?
Chris Zerga: Well I think there's a potential for real growth. Again we are
operators, so we like to see properties put into production. When we originally joint
ventured on the Mineral Ridge property, the property had a checkered past from an operating
standpoint. Two companies tried to operate that property and failed. We rehabilitated the
associated infrastructure and were able to bring it into production, economically, in a
relatively short time frame. As operators, we have maintained a profitable operating margin
through some relatively tough times in the gold market. We believe we can do the same thing
with the GoldWedge property. I believe, if you were going to invest in a mining company, we
are a proven resource.
Allen Alper: That sounds very good. Is there anything else you'd like to add,
Chris?
Chris Zerga: Yes, I think that Mineral Ridge has been a great property to
operate, and the team is what makes it work so well. We're always balancing production with
exploration and permitting and it’s never easy. The property will always require our
exploration team to bring exploration targets into mineable resources quickly. While we're
doing some of that work, we're also going to be defining the Gold Wedge property. I do
believe that's where the next big production will come from. It has a bit of a timeline
associated with it and we are working with the regulatory agencies to stream-line that
timeline. Also, we're always out there looking for properties that fit our operating
abilities. There are several companies with resources very near us. From those standpoints,
I think it's very good for us. We're in the right location with the right team. I think
that’s a good bet.
http://www.scorpiogold.com/
Telephone: 819-825-7618
Email: scorpio@scorpiogold.com
|
|