Mr. Parviz Farsangi reports

SCORPIO MINING REPORTS RECORD REVENUES, MINE OPERATING EARNINGS AND CASH FLOW FOR 2011 AND PROVIDES UPDATE ON MINERAL RESOURCES AND RESERVES AT NUESTRA SENORA

Scorpio Mining Corp. has issued its financial and operating results for the year and fourth quarter ended Dec. 31, 2011. This news release should be read in conjunction with the corporation's audited financial statements and management's discussion and analysis for the year ended Dec. 31, 2011, available on the corporation's website and on SEDAR.

                  HIGHLIGHTS FOR THE YEAR AND THREE MONTHS ENDED DEC. 31, 2011
                                 (in thousands except as noted)

                                                               Year ended          Three months ended
                                               Dec 31, 2011  Dec 31, 2010  Dec 31, 2011  Dec 31, 2010

Mine operating earnings                             $33,231        $8,959        $3,613        $5,488
Net earnings (loss) (1)                             $12,577       $30,657       $(1,040)      $14,999
Earnings per share (basic)                            $0.07         $0.18         $0.00         $0.08
Adjusted EBITDA (2)                                 $35,002       $14,325        $3,574        $7,376
Adjusted EBITDA per share (basic) (2)                 $0.18         $0.09         $0.01         $0.04
Cash flow from operating activities                 $33,869       $11,511        $1,129        $6,623
Underground ore production (tonnes)                 511,605       351,874       135,084       102,164
Plant throughput (tonnes)                           509,292       381,215       131,581       112,783
Surface stockpile (tonnes)                            8,947        25,239         8,947        25,239
Head grades
Silver grade (g/t)                                      101            97            91            97
Zinc grade (%)                                         2.16          2.04          2.05          2.01
Copper grade (%)                                       0.33          0.32          0.34          0.37
Lead grade (%)                                         0.92          1.02          1.03          0.91
Contained metals
Silver (ounces)                                   1,363,217       910,352       320,448       274,741
Zinc (pounds)                                    20,395,987    14,103,587     4,922,536     4,136,424
Copper (pounds)                                   2,143,091     1,666,377       522,468       626,295
Lead (pounds)                                     7,210,861     6,158,650     2,094,092     1,663,750
Revenue from metal payable                          $70,323       $42,231       $13,776       $15,696
Revenue distribution
Silver                                                   57%           45%           53%           49%
Zinc                                                     23%           28%           25%           25%
Copper                                                   11%           13%           12%           15%
Lead                                                      9%           14%           10%           11%
Recovered silver equivalent (ounces) (3)          2,847,687     2,014,188       694,538       612,941
Silver payable (ounces)                           1,155,412       817,512       246,114       251,809
Zinc payable (pounds)                            16,820,739    11,798,390     4,103,591     3,547,136
Copper payable (pounds)                           1,953,147     1,498,453       464,203       583,771
Lead payable (pounds)                             6,366,495     5,812,413     1,646,566     1,607,756
Total cash cost (recovery) 
per silver payable ounce (2) (U.S.)                   $1.14         $1.89         $9.65        $(1.82)

2011 highlights

Financial

• Revenue from metal payable increased 67 per cent to $70.3-million in 2011 compared with $42.2-million in 2010 as a result of record production and increased metal prices;
• Cash cost per silver payable ounce, net of byproduct credits, was $1.14 in 2011 compared with $1.89 in 2010;
• Mine operating earnings in 2011 increased 271 per cent to a record of $33.2-million compared with $9-million in 2010;
• Net earnings for 2011 decreased 59 per cent to $12.6-million or seven cents per share (basic) compared with net earnings of $30.7-million or 18 cents per share (basic) for 2010. Included in the net earnings for 2010 is a $20.2-million gain on dilution and deconsolidation of Scorpio Gold Corp. and a $9.9-million deferred income tax recovery adjustment, which in the aggregate accounted for 18 cents per share (basic);
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) (2) in 2011 increased 144 per cent to $35-million compared with $14.3-million in 2010;
• Cash flow from operating activities in 2011 increased 194 per cent to $33.9-million compared with $11.5-million in 2010;
• Attained debt-free status through the repayment of $20-million to fully retire convertible debentures;
• After the repayment of the $20-million debentures in May, 2011, and prepayments in December, 2011, of $4-million for equipment and $1.8-million for reagents, which will be delivered in 2012, the corporation had $25.8-million in cash as at Dec. 31, 2011, compared with $12.6-million as at Dec. 31, 2010;
• Working capital as at Dec. 31, 2011, was $48.9-million compared with a negligible amount as at Dec. 31, 2010.

Operations

• Zero environmental non-compliance;
• Reduced lost time and severity frequencies by 91 per cent and 89 per cent, respectively, compared with 2010;
• Underground ore production and plant throughput in 2011 increased 45 per cent and 34 per cent, respectively, compared with 2010;
• Recovered silver equivalent ounces (3) in 2011 increased 41 per cent to 2,847,687 ounces compared with 2,014,188 ounces in 2010;
• Contained metals produced in concentrates in 2011 reflect an increase of 50 per cent, 45 per cent, 29 per cent and 17 per cent for silver, zinc, copper and lead, respectively, compared with 2010;
• Commenced development of the Candelaria deposit in preparation for test mining;
• Assumed control of mining operations at the La Verde mine and commenced refurbishment for improved safety and future production. Initial metallurgical testing performed at Nuestra Senora plant;
• Initiated replacement of aging mining fleet;
• Closed agreement with Grupo Mexico to obtain its district concessions in the Cosala district.

Fourth quarter 2011 highlights

Financial

• Revenue from metal payable decreased 12 per cent to $13.8-million in fourth quarter 2011 compared with $15.7-million in fourth quarter 2010. Although there was increased production of contained metals in the fourth quarter of 2011 compared with the fourth quarter of 2010, the decrease in revenue was due mainly to lower silver and copper payables related to variations in metallurgy and commercial settlement variations which have subsequently returned to acceptable ranges, decreases in the recorded metal prices, and an increase in lead concentrate inventory at the end of fourth quarter 2011;
• Cash cost (recovery) per silver payable ounce, net of byproduct credits, was $9.65 in fourth quarter 2011 compared with a loss of $1.82 in fourth quarter 2010. This increase in fourth quarter 2011 resulted from lower than usual payable silver, as explained above, and the fact that not all of the contained metals from production were realized since a customer was not able to purchase all of the December production of lead concentrate, which contains a significant portion of silver. In addition, the corporation incurred approximately $900,000 of additional costs in fourth quarter 2011 beyond those incurred in fourth quarter 2010, specifically relating to additional spare parts for the mill, increased insurance premiums for increased coverage, year-end adjustments for labour and contracting a third party to perform drilling. This increased cost accounted for $3.66 cash cost per silver payable ounce;
• Mine operating earnings in fourth quarter 2011 decreased 34 per cent to $3.6-million compared with $5.5-million in fourth quarter 2010. The decrease in mine operating earnings is due to the factors explained above, namely decreases in metal payables and metal prices, an increase in concentrate inventory which led to reduced revenues, and the additional $900,000 costs;
• Net loss in fourth quarter 2011 was $1-million or zero cent per share (basic) compared with net earnings of $15-million or eight cents per share (basic) in fourth quarter 2010 as a result of the reduction in revenues and increased costs described above. The fourth quarter 2010 earnings included an $11.5-million deferred income tax recovery adjustment which accounted for six cents per share (basic);
• Adjusted EBITDA (2) in fourth quarter 2011 decreased 52 per cent to $3.6-million compared with $7.4-million in fourth quarter 2010 as a result of the reduction in revenues and the additional costs described above;
• Cash flow from operating activities in fourth quarter 2011 decreased by 83 per cent to $1.1-million compared with $6.6-million in fourth quarter 2010 as a result of the reduction in revenues, additional costs described above and the prepayment of $1.8-million for reagents to be delivered in 2012.

Operations

• Underground ore production and plant throughput in fourth quarter 2011 increased 32 per cent and 17 per cent, respectively, compared with fourth quarter 2010;
• Recovered silver equivalent ounces (3) in fourth quarter 2011 increased 13 per cent to 694,538 ounces compared with 612,941 ounces in fourth quarter 2010;
• Contained metals produced in concentrates in fourth quarter 2011 reflect an increase of 17 per cent, 19 per cent and 26 per cent for silver, zinc and lead, respectively, and a decrease of 17 per cent for copper, compared with fourth quarter 2010;
• Announced high-grade results from San Rafael drilling (news release Nov. 7, 2011);
• Appointed vice-president of exploration.

Notes for year-end and fourth quarter highlights

(1) The year ended Dec. 31, 2010, results include a $20.2-million gain on dilution and deconsolidation of Scorpio Gold and a $9.9-million future income tax recovery adjustment. The fourth quarter 2010 results include an $11.5-million future income tax recovery adjustment.

(2) This is a non-IFRS performance measure.

(3) Silver equivalent ounces in 2011 were established using budgeted prices as follows: silver -- $24 (U.S.) per ounce, zinc -- $1.01 (U.S.) per pound, copper -- $3.58 (U.S.) per pound and lead -- $1.02 (U.S.) per pound.

Nuestra Senora mineral resources and reserves update

The corporation has identified an unexpected divergence between the mineral resource and reserve estimates set out in the technical report dated March 28, 2011 and entitled mineral reserve update, Nuestra Senora, NI 43-101 technical report prepared for the corporation by Genivar Inc., and the actual mineralization that the corporation has encountered in the main production areas between levels 8 and 12 at the Nuestra Senora mine. The corporation has encountered ore with lower than estimated lead and copper grades in these production areas, and development and definition drilling has identified lower tonnages relative to what was expected in the Nuestra Senora technical report.

In order to better understand this divergence, the corporation has commissioned a comprehensive update of the Nuestra Senora mineral resource and reserve estimates. As part of this update, in third quarter 2011, the corporation engaged Mine Development Associates, an independent expert, to prepare new resource and reserve estimates that are compliant with NI 43-101 and that take into account the latest information available to the corporation. The corporation expects the new resource estimate to be available by the end of second quarter 2012. An updated reserve estimate is expected in late third quarter 2012 or early fourth quarter 2012.

As of the date of this news release, the corporation's current assessment of the geology, exploration and production data indicates that the mineral deposit at Nuestra Senora is not as continuous as previously interpreted. The model developed by the corporation, based on the geological information and data available to it at the time, predicted areas suitable for block mining from large stopes. However, geological information and data from actual mining received by the corporation since the development of such model suggests that the mineral deposit is more variable in distribution and continuity, and more confined in extent, than anticipated. Accordingly, management expects a significant reduction in the resource and reserve estimates at the Nuestra Senora mine. The magnitude of the reduction cannot be accurately quantified at this time. Such a reduction could adversely impact production, life-of-mine and cash flow forecast, including the corporation's previously released production guidance for 2012. A reduction in operating earnings from this mine could negatively impact earnings and the financial condition of the corporation.

Outlook for 2012

• Continuous improvement of safety and environmental systems building on the recent achievement of one million hours with no lost-time accidents;
• Sustaining capital expenditures of $5.2-million allocated for maintaining and improving existing operations at Nuestra Senora;
• Approved $5-million for phase I of the Nuestra Senora plant expansion by 80 per cent to 2,750 tonnes per day. Phase I of this expansion, which includes engineering, civil works and the purchasing of long-lead-time items, such as an additional used ball mill and the installation of a flash flotation cell, is expected to be concluded in second quarter 2012. The commencement and completion of phase II, which includes construction and commissioning, will depend on the results of the updated NI 43-101 resource and reserve estimates at Nuestra Senora, El Cajon and San Rafael, drilling results at La Verde, and permitting. The total plant expansion is estimated at $20-million and will be financed internally;
• $9.3-million allocated for exploration, including: exploration drilling at Nuestra Senora and its adjacent deposits; infill and exploration drilling at San Rafael, El Cajon and La Verde to support near-term production growth; exploration drilling of multiple prospects in the Cosala North district; and drill testing of the La Revancha and Tepozen projects in the Parral area;
• Updated resource estimates at San Rafael and El Cajon deposits are expected by the end of second quarter 2012 and reserve estimates are expected by the end of third quarter 2012 or early fourth quarter 2012;
• Drilling on the La Verde mine is expected to finish in second quarter 2012, to be followed by geological modelling and interpretation. The corporation will make an assessment at that time to determine whether the data will support a resource estimate. The mine is currently undergoing refurbishment to improve safety and production efficiency;
• A 4,500-metre surface drilling program at La Revancha and Tepozen. The initial drill results from La Revancha have returned significant silver values over substantial widths (news release March 5, 2012).

The Nuestra Senora processing plant has an existing capacity of approximately 1,500 tonnes per day but is expandable up to approximately 4,000 tonnes per day. The corporation has commenced phase I of the plant expansion to 2,750 tonnes per day. The commencement of phase II of this expansion depends on the results of the resource and reserve update at Nuestra Senora and geological interpretation of the La Verde mine to ascertain their ability to provide immediate expanded ore feed while the San Rafael and El Cajon deposits are being developed. Other growth alternatives being evaluated include the development of a second processing facility in the Cosala district. Such expansion would allow for the diversification of process circuits and reduce the distances between multiple ore sources and processing facilities. Near-term and future production growth to support these expansion scenarios is expected to come through advancement of deposits in the Cosala district.

Conference call and webcast details

Scorpio Mining plans to host a conference call on Monday, April 2, 2012, at 10:30 a.m. (EDT) to discuss these results. To participate in the call please dial:

North America toll-free: 888-231-8191

Toronto area: 647-427-7450

Conference ID: 67041078

A digital recording of the conference call will be available two hours after the call's completion at 1-855-859-2056. An archived webcast of the conference call will also be available on the Scorpio Mining website.

We seek Safe Harbor.