Minefinders Sets Initial Production Estimatesfor the Dolores Mine and Provides an Update on Commissioning andCommunity Relations
09:18 EDT Monday, June 09, 2008
VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 9, 2008) -Minefinders Corporation Ltd. (the "Company") (TSX:MFL)(AMEX:MFN)reports initial production estimates for its Dolores gold and silvermine in Chihuahua, Mexico, where the first gold and silver pour is nowscheduled for mid July, 2008.
Management expects gold production from Dolores will beapproximately 40,000 ounces in 2008, 128,000 ounces in 2009 and 129,000ounces in 2010. Silver production is expected to be 1.0 million ouncesin 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 isexpected to average $403 per gold equivalent ounce in 2008 and decreasegoing forward to the forecasted life of mine average cash cost of $297per gold equivalent ounce.
Minefinders expects to report positive cash flow starting in thethird quarter of 2008, which will be the first operating quarter.
Commissioning update
Mining at Dolores is approaching a sustained rate of approximately100,000 tonnes per day with over 7 million tonnes of ore and wastematerial mined at Dolores to date.
Placement of initial drain rock and mineralized over liner materialon the leach pad is complete and ore is now being crushed for stackingon the leach pad using the radial stacking system. With two of thethree tertiary crushers now commissioned, Minefinders has processingand stacking capacity of 12,000 tonnes of ore per day. Finalcommissioning of the third tertiary crusher is targeted for mid Juneand is expected to bring the crushing and conveying circuit to thefeasibility run rate of 18,000 tonnes of ore per day.
In late May an illegal blockade was established on an access road tothe Dolores Mine site. The majority of the individuals involved arebelieved to be from outside of the region and include only a smallfringe group from within the local 221-member Ejido community.
While Minefinders was on target to achieve the first gold and silverpour from Dolores in late June 2008, for safety reasons the Companydecided to suspend construction activities and operations until Mexicanauthorities safely removed the illegal blockade. On June 5, in responseto meetings held with government officials, the blockaders re-openedthe road and mining and processing operations have recommenced. TheCompany is continuing discussions with the state and federalgovernments and with the individuals responsible for the blockade tocome to a definitive long-term resolution. As a result of the temporarysuspension of operations due to the illegal blockade, the first goldand silver pour is now expected in mid-July.
"Despite the delay of the first gold and silver pour due to theillegal blockade, the commissioning at Dolores is progressing well withconstruction and operating costs consistent with those reported in theCompany's February 14, 2008, economic forecast and reserve update,"said Mark Bailey, Minefinders' President and CEO. "We remain fullyfunded to complete development and commissioning of the Dolores Mineand continue the Dolores mill preliminary feasibility study and 2008exploration programs at Dolores and elsewhere."
Capital expenditures and available funds
Mine expenditures, including pre-commercial production operatingexpenditures, as of March 31, 2008 totaled approximately $160 million.The remaining expenditures are estimated at $32 million which will beincurred over the course of 2008. As disclosed in the first quarterfinancial results, as of March 31, 2008 Minefinders had $5.5 million incash and cash equivalents, net working capital of $12.3 million and $44million available from a $50 million revolving three-year term creditfacility with Scotia Capital.
The Dolores Mine has a well-defined deposit containing proven andprobable reserves of 2.44 million ounces of gold and 126.6 millionounces of silver with exploration upside and an open pit mine life ofover 15 years. Minefinders plans to complete a preliminary feasibilitystudy in 2008 on the potential for the addition of a flotation mill toenhance recoveries from high-grade ore in the open pit, to processadditional underground ore and to increase production capacity.
Community relations
Minefinders, which employs approximately 350 people at Doloresthrough its Mexican subsidiaries, has developed strong relations withthe local Ejido and nearby communities. Many Ejidatarios work at orprovide services to the mine. Over 76% of the total workforce atDolores is from the state of Chihuahua, with more than 29% from thetowns of Dolores and Madera. Dolores and Madera residents constitute44% of the mine operating workforce, and local training programs areexpected to continue to pay dividends to the local communities with newemployment opportunities.
The Ejidatarios have continued to demonstrate their strong supportfor the Dolores Mine. In response to the illegal blockade initiated inlate May, more than 60 Ejido members signed a letter to the state andfederal authorities on June 3 condemning the actions of the blockadersand confirming their support for the Company. Mark Bailey, Minefinders'President and CEO commented "we sincerely appreciate the efforts andsupport of the local community in continuing to move the Dolores Mineforward."
In 2006, Minefinders negotiated a comprehensive agreement with theEjido community under which both parties agreed to work cooperativelyin the development and operations of the mine. In connection with thatagreement, the Company has constructed a new village for the localcommunity. The new Dolores village includes electrical, water andsanitation services not previously available to the local population.In addition, the Company constructed public facilities including a newprimary school, where classes have commenced for the local children, amodern medical facility with onsite medical professionals, a church andcommunity center, as well as town offices.
Qualified Person
Mark Bailey, MSc., P.Geo., is the "qualified person" with overallresponsibility for the Dolores Mine and is responsible for the contentsof this news release.
About Minefinders
Minefinders is a precious metals mining and exploration company. TheCompany is in the final stages of commissioning the multi-million ounceDolores gold and silver mine in Mexico. The mine is expected to have a15-year life as an open pit mine with additional potential as ahigh-grade underground mine in the future. The Company continues itsexploration efforts on several other prospective projects in Mexico tobuild a quality pipeline of precious metals projects for future growth.
MINEFINDERS CORPORATION LTD.
Mark H. Bailey, President and Chief Executive Officer
Safe Harbor Statement under the United States Private SecuritiesLitigation Act of 1995: Statements in this release that areforward-looking, including statements relating to estimates ofproduction, the timing of the commencement and completion of theconstruction of, and the commencement of production from, the Doloresmine, the anticipated costs related to the Dolores mine, the adequacyof the capital and anticipated production and costs of production, andother statements that are based on the estimates, projections andexpectations of management are subject to various risks anduncertainties concerning the specific factors identified above and inthe Company's periodic filings with the regulatory authorities inCanada and the United States. Such information contained hereinrepresents management's best judgment as of the date hereof based oninformation currently available. The Company does not intend to updatethis information and disclaims any legal liability to the contrary.
FOR FURTHER INFORMATION PLEASE CONTACT:
Minefinders Corporation Ltd.
Mike Wills
Investor Contact
(604) 687-6263
(604) 687-6267 (FAX)
Email: mike@minefinders.com
Website: www.minefinders.com