newsMinefinders Subsidiary Commences Binding Arbitration Seeking US$10 Million in Damages From Ausenco
13:08 EDT Friday, May 23, 2008
VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 23, 2008) -Minefinders Corporation Ltd. (the "Company") (TSX:MFL)(AMEX:MFN), aprecious metals mining and exploration company, announced today that asubsidiary company has commenced a binding arbitration process seekingapproximately US$10 million in damages from Ausenco International PTYof Brisbane, Australia and a related company, Ausenco Americas LLC.
The binding arbitration was launched on May 22, 2008 by Minefinders'subsidiary, Compania Minera Dolores S.A. de CV. ("CMD"), before theInternational Centre for Dispute Resolution of the American ArbitrationAssociation. In addition to the damages, CMD seeks to recover the costsof the arbitration and its legal fees.
Separately, CMD has assumed responsibility for the final stages ofcommissioning the multi-million ounce Dolores gold and silver mine inMexico. Minefinders continues to expect the mine will commencecommercial production in mid-2008, based on the updated reserves andeconomics study disclosed on February 14, 2008. Minefinders believes ithas adequate funds in place and available from its revolving creditline to meet its cash needs for the commissioning of the Dolores Mineuntil the mine reaches full commercial production.
The claim for damages relates to breaches by Ausenco of contractsbetween CMD and the Ausenco companies, under which Ausenco Americas wasto provide engineering and design services for the Dolores mine andAusenco International was to act as construction manager. In thearbitration Minefinders alleges that the Ausenco companies wereresponsible for a number of engineering, design and constructionproblems and delays that increased the cost of developing the Doloresmine compared with expectations prior to the February 14, 2008 study. Aportion of this additional cost will be recouped should Minefinders besuccessful in the arbitration.
Minefinders is aware that Ausenco International filed a writ ofsummons in Supreme Court of British Columbia on May 9, 2008, againstMinefinders and CMD for allegedly not paying US$1.9 million under theconstruction management agreement. The writ of summons has not beenserved, and all disputes under the construction management agreementand the engineering services agreement between the parties must bedecided by binding arbitration. CMD has demanded that the writ againstCMD be withdrawn based upon the mandatory arbitration clause and asagainst Minefinders because Minefinders is not a party to any of therelevant agreements. CMD intends to vigorously defend against any suchclaims by Ausenco International or Ausenco Americas.
Qualified Person
Mark Bailey MSc., P.Geo., is the "qualified person" with overallresponsibility for the Dolores Project and is responsible for thecontents of 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. Construction at Dolores issubstantially complete. Mining within the pit began last fall and, todate, more than 7.3 million tonnes of material has been moved and700,000 tonnes of development ore stockpiled. Ore is now being crushedand placed on the leach pad with the recently commissioned conveyingand stacking system. The mine is expected to have a 15-year life as anopen pit mine with additional potential as a high-grade undergroundmine in the future. The Company continues its exploration efforts onseveral other prospective projects in Mexico to build a qualitypipeline 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 the timing of thecommencement and completion of the construction of, and thecommencement of production from, the Dolores mine, the anticipatedcosts related to the Dolores mine, the adequacy of the capital andanticipated expenditures for working capital and exploration, and otherstatements 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