Steve Roebuck, the President of Scorpio Gold Corporation, spoke with Metals News at the recently held Toronto Resource Investment Conference about their newly acquired projects and their commercial production.
Roebuck said, “My background is as a geologist. I have been involved in the industry for twenty years.” Though Roebuck has been in the industry for many years, he is a relatively new member of the team at Scorpio. He said, “This is my first anniversary at Scorpio. I have worked with Peter Hawley before and I am helping him to develop Scorpio Gold’s assets and take care of our shareholders.”
Scorpio Gold Corporation has three properties currently under their management, each of them in a different phase of development. Said Roebuck, “The main deposit is Mineral Ridge. All of our projects are in Nevada. It is an excellent jurisdiction to work in. It has deposits that are large and small.” This past year, Scorpio Gold Corporation became a commercial gold producer via the Mineral Ridge deposit. Roebuck said, “We produced over 32,000 ounces of gold last year.”
The company is on track to produce even more during 2013 with additional profitability. He said, “This year, at the halfway point, we are up to 18,000 ounces of gold, so we have increased our production guidance range from the 32,000 to 35,000 ounces up to 35,000 to 40,000 ounces..” In addition to increasing the amount of production, the company has been working on decreasing their costs of production. Roebuck said, “Our cost of production per ounce gold sold is currently $713 dollars which we have lowered since last year.”
Since bringing Mineral Ridge online with commercial production, the company has added two new projects. Roebuck said, “We have added Goldwedge and the Pinon Deposit. Goldwedge is fully permitted. Pinion is a more long term asset for our future.” These acquisitions are relatively new for the company. Roebuck said, “In December of 2012, we picked up Goldwedge. We like what we have there. Look for us to start doing some interesting things with that project shortly.” Goldwedge is currently fully permitted, but the company is spending time making sure that the documentation is correct. Said Roebuck, “The first part of this year we have spent looking at the permitting to make sure it is ready to go. We may start up the mill shortly, perhaps in late October or November.” Mr. Roebuck also talked about the Pinon deposit, “There are some real legs on the Pinon project. It is right at the surface with a gold oxide. The next step would be to get the NI 43-101 done. You may hear a lot about that project next year, or sooner.”
Scorpio Gold Corporation is currently stable financially, which is a priority for the management. Roebuck said, “We have 125 million shares, about 135 million fully diluted.” Many of those shares are held by New York and Toronto institutions. Roebuck said, “We have a large institutional shareholder base – approximately 50%. There are also insiders that own ten to twelve million shares.” Like many companies, Scorpio Gold Corporation has experienced a downturn in value with the changes in the market. Roebuck said, “We are trading at about $0.22 to $0.24 cents. We have a market cap of $30 million dollars.” As with other management teams, Roebuck and Hawley are not satisfied with where they are in the market. Roebuck said, “Is it a place we are happy with? No!”
Despite the challenges of the market, Scorpio Gold Corporation is in a solid financial position unlike many other junior companies. Roebuck said, “We are cash flow positive, we are profitable and we have been so for the past 6 quarters, not bad for a 3 year old junior producer. We have not gone back to the market and we have preserved the market structure.” Part of staying cash flow positive is keeping cash on hand from their commercial production at Mineral Ridge, which funds many of their other activities. Roebuck said, “We always have a couple million dollars in the bank. We have a lot of gold in process inventory as well.” In fact, with the gold production from their project, the company has access to additional liquid assets. Roebuck said, “There’s usually about ten to twelve million dollars worth of cash sitting in inventory.” The money they have made through production has also gone into capital improvements for the company. Roebuck said, “We have put a lot of money back into the company including a new crushing circuit and a new water well. We have a lot of money in bonds as well. We are always putting it back into the company and we are seeing our efficiencies increase.”
Why should investors consider Scorpio Gold Corporation? Roebuck believes that the timing and quality of the company are paramount. He said, “You are getting in at a good entry point and that is a reason. You are buying into a management team that has a production team. We are doers.” Roebuck and Hawley also understand the importance of shareholders. Roebuck said, “We respect our shareholders.” In fact, after their last funding, Hawley promised not to ask for additional monies and has stood by his word. Roebuck said, “Peter Hawley is a salt of the earth type of guy. He’s an engineer and geologist and well respected in the mining and financial sector. He set us up to stand on our feet. It is an honor to work with Peter.”
This type of behavior has earned Scorpio Gold Corporation the positive attention of many in the industry. Roebuck said, “Being a junior producer and having the respect of the industry and the street, we have visions to grow. The growth opportunities in this market are good and we are looking at a number of quality assets. Our three year goal is to be a 100,000 ounce producer, but I think we can get there sooner. ”
With a currently producing asset and two more deposits that may become near term producers, Scorpio Gold Corporation is in an enviable position to take advantage of growth in the market.
Peter J. Hawley, CEO, Scorpio Gold Corporation
Telephone: 819-825-7618
Email: phawley@scorpiogold.com
Steve Roebuck, President, Scorpio Gold Corporation
Telephone: 819-825-7618
Email: sroebuck@scorpiogold.com