Vancouver, January 27, 2020 – Scorpio Gold Corporation (“Scorpio Gold” or the “Company”) (TSX-V: SGN) is pleased to announce the signing of a Toll Milling Agreement (the “Agreement”) between the Company’s affiliate, Goldwedge LLC, and Lode-Star Mining Inc. (“Lode-Star”). The Agreement will allow for the processing of ore delivered from Lode-Star’s mining properties to Scorpio Gold’s 400 ton per day Goldwedge milling facility located in Manhattan, Nevada.

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Under the terms of the Agreement, Lode-Star will advance funds required for the design engineering, permitting and mill modifications required for processing of Lode-Star’s ore. Based on previous metallurgical testing, Lode-Star’s ore requires gravity combined with flotation for optimal recoveries of contained precious metals. The Goldwedge milling circuit is currently configured with a gravity recovery circuit. The modifications to the Goldwedge milling facility will include the addition of a flotation circuit, supporting reagent tanks/silos, secondary lining of process containment ponds, leak detection and monitoring wells associated with fluid containments. The Agreement provides for Lode-Star to recoup the advanced funds through a reduction in toll milling rates until all advanced funds have been repaid. Following repayment, the toll charges will revert to standard rates.

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This Agreement is mutually beneficial for both parties. Goldwedge LLC will transition from temporary closure into production. With the addition of a flotation circuit the Goldwedge milling facility will have the capability of processing carbonaceous/sulfidic ores, expanding its availability for toll milling in addition to the Lode-Star arrangement. The new flotation circuit will also result in improved recoveries for mineralised material within the Goldwedge deposit, potentially allowing for lower mining cut-off grades. Lode-Star benefits from having a long-term processing agreement for their ores at a location operated by an experienced processing team. The mill is in close proximity to their mine, thus minimizing haulage costs, and will have a milling circuit optimised for peak metallurgical recoveries.

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Scorpio Gold’s President, Chris Zerga, comments, “This toll milling agreement is the achievement of many hours of work between Lode-Star and Scorpio Gold’s management and both parties will greatly benefit from it. We look forward to working with the Lode-Star team and positioning the Goldwedge mill for additional toll-milling opportunities.”

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