Scorpio Mining and U.S. Silver & Gold entered into a definitive agreement in early November to merge the two companies.

The combined company will have two producing silver mines: Scorpio’s Nuestra Señora mine at its Cosalá district operations in Sinaloa, Mexico, and U.S. Silver & Gold’s Galena mine in northern Idaho. Also in the Cosalá district, Scorpio has its El Cajón silver-copper-gold mine approaching startup and is continuing development of its San Rafael advanced exploration project.

Sustainable production of the merged company is forecast in the range of 4 million to 5 million silver equivalent oz/y.

The merged company will continue under the name of Scorpio Mining and will be headquartered in Toronto, Canada. Its pro forma net working capital will total about C$40 million, including approximately C$21 million in cash. The transaction values the merged company at about C$65 million.

Former shareholders of Scorpio will own approximately 59% and former shareholders of U.S. Silver & Gold will own approximately 41% of the merged company. Peter Hawley, Scorpio

Mining’s founder and CEO, will be chairman of the merged company. Darren Blasutti, current president and CEO of U.S. Silver & Gold, will hold those positions with the merged company.

The companies expect the transaction to close prior to year-end 2014.

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