Jun 9 2014
Scorpio Mining Corporation (the "Company") today provided information concerning its ongoing review of certain previously disclosed discrepancies concerning the concession boundaries of the Company's El Cajón mineral deposit, located in the Cosalá Norte District near Cosalá, Sinaloa in Mexico, and efforts by Tocqueville Asset Management, L.P. and The Tocqueville Trust on behalf of The Tocqueville Gold Fund to take control of the Company's board of directors.
On March 18, 2014, the Company disclosed that, in connection with a pre-feasibility study of proposed underground mining of the El Cajón deposit that is currently being prepared for it by JDS Energy and Mining Inc., the Company had identified discrepancies between registered data and mapped information relative to the boundaries of the concessions encompassing the El Cajón resource outline. The Company reports that it is currently carrying out its planned development work at El Cajón, while it is awaiting confirmation of the concession boundaries from the Dirección General de Minería (the "DGM"). The Company expects that the pre-feasibility study will be completed in the third quarter of 2014, following the incorporation of geotechnical data analysis and the resolution of the concession boundaries by the DGM, and that this will then result in the publication of a mineral reserve estimate for the El Cajón deposit, prepared in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects.
The Company acquired the El Cajón deposit on April 1, 2010 through its acquisition by way of a statutory plan of arrangement (the "Arrangement") of all of the outstanding common shares of Platte River Gold Inc. ("Platte River"). Pursuant to the Arrangement, all of the outstanding common shares of Platte River were acquired in exchange for common shares of the Company. At the time of the Arrangement, approximately 39.2% of Platte River's common shares were owned by investment funds and/or managed accounts for which Tocqueville Asset Management, L.P. acted as investment advisor (collectively, "Tocqueville") and for which holdings Mr. John Hathaway was the fund manager. Mr. Hathaway was a director of Platte River at the time of the Arrangement. Pursuant to the Arrangement, Tocqueville acquired approximately 29.3 million common shares of the Company, representing approximately 15.7% of the Company's then outstanding common shares.
The Company notes that the Notice of Nomination of Directors delivered to the Company on May 12, 2014 by Tocqueville Asset Management, L.P. and The Tocqueville Trust on behalf of The Tocqueville Gold Fund proposing three new directors for election to the board of directors of the Company listed Mr. Hathaway as the contact at Tocqueville. The Company continues to be concerned about the motivation of Tocqueville in seeking to take control of the Company's board of directors.
The Company is reviewing the above-noted discrepancies at its El Cajón deposit and the extent to which Platte River and its management and shareholders were, or should have been, aware of such discrepancies at the time of the Arrangement. As part of that investigation, the Company is examining its available legal and other remedies in the circumstances. If the boundaries of the concessions encompassing the El Cajón resource outline, as confirmed by the DGM, differ significantly from the boundaries that the Company has historically believed them to be, the Company's El Cajón resource estimate may need to be revised.
Source: http://www.scorpiomining.com