Interview With Founder And Chairman Of The Board: Scorpio Gold Corp. (SGN.V) - Peter J. Hawley
December 19, 2011 - The Wall Street Transcript has just published Gold and Precious Metals Report offering a timely review of the sector. This Special Report contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. Please find an excerpt below.
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Peter J. Hawley, Founder of Scorpio Mining Corp., served as CEO of the company from 1998 until November 2010, and he remains a Director and Chairman of the Board. He has 30 years of mining industry experience that spans grassroots exploration to development and production. Mr. Hawley has worked extensively with a large number of intermediate and senior mining companies, including Teck, Noranda, Placer Dome, Inc., and Barrick Gold Corporation. Mr. Hawley is also highly experienced in private and public company financing, and corporate administration. He holds degrees in mining engineering and geology.
TWST: Please start with a short introduction and history of Scorpio Gold.
Mr. Hawley: Scorpio Gold (SGN.V), I'll just backup a little bit. Scorpio Mining is the parent company; I was the Founder and created the company and then brought it public, and brought it into production. Scorpio Mining had some gold assets and because Scorpio Mining was a very large silver producer, it didn't recognize any value for it. So I had the mandate with the board of directors to spin out the gold assets and create value for the shareholders. And as a result of that, we spun out the company Scorpio Gold Corp. The IPO happened in March 2010 with the company going public on the TSX-V Exchange, and it started producing gold in June of this year, and went cash flow positive in September 2011. So not only was it quite accretive to not only Scorpio Mining but also to shareholders of both companies.
TWST: Would you comment on the economically recoverable reserves that you estimate out of your Mineral Ridge project?
Mr. Hawley: Absolutely. When we acquired the property, it was a distressed asset from the company that filed Chapter 11. But they have historically done 380,000 feet of drilling, and it was all in paper format, not electronic format. So when we started looking at the property, it was where to begin to assess this amount and how reliable was the data. So what we did was, we took one of eight mineralized zones that were drilled off, called the Drinkwater area, and we took approximately 50,000 feet of that drilling, put it electronic format and went to Micon engineering out of Toronto with mandate to form NI 43-101 on that zone. To that point in time, we went ahead and drilled approximately 20 holes to see how reliable the data was and then went ahead and did some additional drilling to form the resource database for the calculation.
The results of that was the first-ever NI 43-101 in June of last year, which said the Drinkwater area had 357,000 ounces, and mostly in the measured category, and was open for expansion. That was the basis of the mine planning and why we entered into production. Since that point in time, we've taken the remaining 320,000 feet of historical drilling, which is all in 25-foot centers and has outlined another seven additional pits. Under the guidance of AMEC engineering out of Reno, Nev., we expect to release a new NI 43-101 reserve/resource report, which will include all the historical drilling in addition to the 150,000 feet we have drilled since the 2010 Micon report. So in Q1 of next year, we'll come up with a new reserve/resource statement, and you will see that 357,000 ounces grow dramatically.
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