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Scorpio Gold Announces Closing of Acquisition of Nevada Mineral Properties

VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 12/19/12 -- Scorpio Gold Corporation ("Scorpio Gold" or the "Company") (TSX VENTURE:SGN) announces that it has completed the acquisition (the "Acquisition") of two exploration-stage Nevada mineral properties, known as the Goldwedge and Pinon properties (the "Properties") from Royal Standard Minerals Inc. ("Royal Standard"). The Company acquired the Properties pursuant to the terms of an asset purchase agreement, which was disclosed in the Company's news release dated October 11, 2012.

In consideration for the Acquisition, the Company paid Royal Standard $1,250,000 in cash, less certain holdback amounts, issued Royal Standard 3,000,000 common shares (the "Consideration Shares") and assumed approximately US$16,500,000 of debt (the "Royal Standard Debt") owing by Royal Standard to Waterton Global Value, L.P. ("Waterton").

Scorpio assumed the Royal Standard Debt pursuant to the terms of a credit facility agreement (the "Credit Agreement") with Waterton, which provides that Scorpio Gold will be indebted to Waterton (the "Scorpio Debt") in the principal amount of US$16,000,000, but that the principal amount of the Scorpio Debt will increase to $16,250,000 if not repaid within one year, and increase to $16,500,000 if not repaid within two years. Under the terms of the Credit Agreement, the Scorpio Debt with accrue interest at a rate of 8% per annum, be repaid in monthly instalments over a 36 month period, be secured against all of the Company's assets, and may be repaid by the Company at any time without penalty. The Credit Agreement also provides that the Company will be required to use 50% of any net revenues from the Goldwedge property and 100% of any net toll-milling revenues from the mill located on the Goldwedge property to pre-pay the Scorpio Debt.

In connection with the Acquisition, the Company and Waterton entered into a royalty agreement (the "New Royalty Agreement") to reduce certain existing royalties held by Waterton in respect of the Properties and a gold supply agreement in respect of the Goldwedge Property (the "New Gold Supply Agreement", collectively with the New Royalty Agreement, the "New Agreements"). Under the terms of the New Royalty Agreement, the Company granted Waterton a 2% net smelter return royalty (the "NSR") on the Goldwedge property and portions of the Pinon property. The NSR in respect of portions of the Pinon property may be reduced by half (to a 1% NSR) for a cash payment to Waterton of US$1,000,000. The NSR in respect of the Goldwedge property may be reduced by half (to a 1% NSR) for a cash payment to Waterton of US$1,000,000, and then eliminated for a further cash payment of US$2,000,000. Under the terms of the New Gold Supply Agreement, the Company will be required to sell to Waterton all gold produced at the Goldwedge property until the date that is the later of the date the Scorpio Debt is repaid and December 17, 2015, subject to extension for certain force majeure events. Gold sold to Waterton pursuant to the New Gold Supply Agreement will be priced at the lower of the average settlement price of gold for the 10 trading days prior to the date of sale, and the settlement price of gold on the trading day immediately prior to the date of sale.

The New Agreements replace prior royalty and gold supply agreements (the "Prior Property Agreements") granted to Waterton by Royal Standard, which ran with the Properties and were on terms less beneficial to the Company than the New Agreements. In consideration for Waterton's agreement to terminate the Prior Property Agreements and replace them with the New Agreements, the Company has issued Waterton 7,500,000 common shares (the "Termination Shares"). The Consideration Shares and the Termination Shares are subject to a four month hold period under applicable securities laws which will expire on April 18, 2013.

For additional information please see the Company's website at www.scorpiogold.com.

ON BEHALF OF THE BOARD

SCORPIO GOLD CORPORATION

Peter J. Hawley, CEO

This news release may contain forward-looking statements that are based on the Company's current expectations and estimates. Forward-looking statements are frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate", "suggest", "indicate" and other similar words or statements that certain events or conditions "may" or "will" occur, and include, without limitation, statements regarding the Company's current plans. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause actual events or results to differ materially from estimated or anticipated events or results implied or expressed in such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise. Forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contacts:
Scorpio Gold Corporation
Steve Roebuck
President
(819) 825-7618
[email protected]

Torrey Hills Capital
Investor Relations:
Jim Macdonald
(858) 456-7300
[email protected]

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