Welcome to Baja Online Realty Blog Sign in | Help

Minefinders Corportation First Pour Scheduled for Mexico in July 2008

Mine-Finders Sets Initial Production Estimates for the Dolores Mine and Provides an Update on Commissioning and Community Relations

June 09, 2008: 09:18 AM EST

cnnad_createAd("654903","http://ads.cnn.com/html.ng/site=cnn_money&cnn_money_pagetype=article&cnn_money_position=220x200_ctr&cnn_money_rollup=markets_and_stocks&cnn_money_section=quigo¶ms.styles=fs","200","220");Minefinders Corporation Ltd. (the "Company") (TSX: MFL)(AMEX: MFN) reports initial production estimates for its Dolores gold and silver mine in Chihuahua, Mexico, where the first gold and silver pour is now scheduled for mid July, 2008.

Management expects gold production from Dolores will be approximately 40,000 ounces in 2008, 128,000 ounces in 2009 and 129,000 ounces in 2010. Silver production is expected to be 1.0 million ounces in 2008, 3.0 million ounces in 2009, and 4.0 million ounces in 2010. Excluding royalties, at a 52 to 1 silver to gold ratio, cash cost is expected to average $403 per gold equivalent ounce in 2008 and decrease going forward to the forecasted life of mine average cash cost of $297 per gold equivalent ounce.

Minefinders expects to report positive cash flow starting in the third quarter of 2008, which will be the first operating quarter.

Commissioning update

Mining at Dolores is approaching a sustained rate of approximately 100,000 tonnes per day with over 7 million tonnes of ore and waste material mined at Dolores to date.

Placement of initial drain rock and mineralized over liner material on the leach pad is complete and ore is now being crushed for stacking on the leach pad using the radial stacking system. With two of the three tertiary crushers now commissioned, Minefinders has processing and stacking capacity of 12,000 tonnes of ore per day. Final commissioning of the third tertiary crusher is targeted for mid June and is expected to bring the crushing and conveying circuit to the feasibility run rate of 18,000 tonnes of ore per day.

In late May an illegal blockade was established on an access road to the Dolores Mine site. The majority of the individuals involved are believed to be from outside of the region and include only a small fringe group from within the local 221-member Ejido community.

While Minefinders was on target to achieve the first gold and silver pour from Dolores in late June 2008, for safety reasons the Company decided to suspend construction activities and operations until Mexican authorities safely removed the illegal blockade. On June 5, in response to meetings held with government officials, the blockaders re-opened the road and mining and processing operations have recommenced. The Company is continuing discussions with the state and federal governments and with the individuals responsible for the blockade to come to a definitive long-term resolution. As a result of the temporary suspension of operations due to the illegal blockade, the first gold and silver pour is now expected in mid-July.

"Despite the delay of the first gold and silver pour due to the illegal blockade, the commissioning at Dolores is progressing well with construction and operating costs consistent with those reported in the Company's February 14, 2008, economic forecast and reserve update," said Mark Bailey, Minefinders' President and CEO. "We remain fully funded to complete development and commissioning of the Dolores Mine and continue the Dolores mill preliminary feasibility study and 2008 exploration programs at Dolores and elsewhere."

Capital expenditures and available funds

Mine expenditures, including pre-commercial production operating expenditures, as of March 31, 2008 totaled approximately $160 million. The remaining expenditures are estimated at $32 million which will be incurred over the course of 2008. As disclosed in the first quarter financial results, as of March 31, 2008 Minefinders had $5.5 million in cash and cash equivalents, net working capital of $12.3 million and $44 million available from a $50 million revolving three-year term credit facility with Scotia Capital.

The Dolores Mine has a well-defined deposit containing proven and probable reserves of 2.44 million ounces of gold and 126.6 million ounces of silver with exploration upside and an open pit mine life of over 15 years. Minefinders plans to complete a preliminary feasibility study in 2008 on the potential for the addition of a flotation mill to enhance recoveries from high-grade ore in the open pit, to process additional underground ore and to increase production capacity.

Community relations

Minefinders, which employs approximately 350 people at Dolores through its Mexican subsidiaries, has developed strong relations with the local Ejido and nearby communities. Many Ejidatarios work at or provide services to the mine. Over 76% of the total workforce at Dolores is from the state of Chihuahua, with more than 29% from the towns of Dolores and Madera. Dolores and Madera residents constitute 44% of the mine operating workforce, and local training programs are expected to continue to pay dividends to the local communities with new employment opportunities.

The Ejidatarios have continued to demonstrate their strong support for the Dolores Mine. In response to the illegal blockade initiated in late May, more than 60 Ejido members signed a letter to the state and federal authorities on June 3 condemning the actions of the blockaders and confirming their support for the Company. Mark Bailey, Minefinders' President and CEO commented "we sincerely appreciate the efforts and support of the local community in continuing to move the Dolores Mine forward."

In 2006, Minefinders negotiated a comprehensive agreement with the Ejido community under which both parties agreed to work cooperatively in the development and operations of the mine. In connection with that agreement, the Company has constructed a new village for the local community. The new Dolores village includes electrical, water and sanitation services not previously available to the local population. In addition, the Company constructed public facilities including a new primary school, where classes have commenced for the local children, a modern medical facility with onsite medical professionals, a church and community center, as well as town offices.

Qualified Person

Mark Bailey, MSc., P.Geo., is the "qualified person" with overall responsibility for the Dolores Mine and is responsible for the contents of this news release.



Published Monday, June 9, 2008 10:51 AM by Zinnia Q.


No Comments
Anonymous comments are disabled