Release - it is economics!Minefinders Corporation Ltd.: Greatly Improved Economics Reported for the Dolores Deposit
11:07 GMT-05:00 Monday, November 20, 2000
VANCOUVER, BRITISH COLUMBIA--Minefinders Corporation Ltd. (TSE: MFL), Mark H. Bailey, President and CEO is pleased to report preliminary economic analysis from new pit designs for the updated Dolores resource model reported in September (NR 9-18-00). Results indicate that the Dolores Main Zone deposit has robust economics with anticipated cash costs of $141 to $149 per ounce Aueq and yearly average production levels of 242,900 ounces Aueq that rivals those of other large-scale precious metals mines worldwide. Two pits, one at highly discounted gold and silver prices, and one nearer to anticipated production prices have been generated, and then modeled at two different gold and silver price levels.
The table below summarizes preliminary cash flow analysis for two pit shells at different price sensitivities for gold and silver:
Pit-shell At $200/oz gold At $300/oz gold and $4/oz silver and $5/oz silver---------------------------------------------------------------------Tonnes of ore 59.7 million 67.2 millionGold grade g/t 0.944 g/t 0.961 g/tSilver grade g/t 55.04 g/t 53.63Aueq grade of ore g/t 1.86 g/t Aueq 1.85 g/t AueqStrip Ratio 3.7:1 4.2:1Tonnes of agglomerate ore 20.7 million 23.4 millionGold grade 2.09 g/t 2.09 g/tSilver grade 129.9 g/t 124.5 g/tAueq grade of agglomerate 4.26 g/t Aueq 4.17 g/t AueqContained Gold 1.81 million ounces 2.08 million ouncesContained Silver 105.6 million ounces 115.8 million ouncesGold recovered 1.6 million ounces 1.8 million ouncesSilver recovered 74.7 million ounces 81.6 million ouncesTotal Aueq recovered 2.8 million ounces 3.2 million ouncesCapital cost +15% $77 million $77 millionCash cost /oz Aueq $141.9/oz Aueq $149.3/oz AueqTotal cost/oz Aueq $180.3/oz Aueq $183.6/ozGold & Silver Price $275/oz & $4.75/oz/ $275/oz & $4.75/oz/ $325/oz & $5.50/oz $325/oz & $5.50/ozNPV o% discount $248.5 million/ $267.2 million/ $378.1 million $412.3 millionCalculated IRR 22.0%/31.4% 22.6%/32.7%
all dollar values are US$ all Aueq is reported at a 60:1 value ratio for silver:gold
The open-pit minable portion of the Dolores Main Zone deposit has substantially increased to 67.2 million tonnes containing 2.07 million ounces of gold and 115.8 million ounces of silver. This corresponds to a 43% increase in tonnage, an 80% increase in recovered gold and a 76% increase in recovered silver. Cash cost per ounce estimates are significantly lower at $141 -$149 per ounce Aueq than those reported in the 1998 scoping study ($169 - $177 per ounce Aueq). A mine life of 13 years results in production of 138,359 ounces of gold and 6.27 million ounces of silver or approximately 242,900 ounces of gold-equivalent metal annually for the life of the open-pit mine.
The new pit shells were generated by the Company with the assistance of Gemcom, using Whittle 3-D software for open-pit mine design. Pit shells were developed using gold prices ranging from $200 to $300 and silver prices of $4 to $5 per ounce. Pit wall angles of 50x were set according to preliminary work conducted by Golder Associates in 1998. All startup and sustaining capital costs, mining costs, G&A and processing costs for agglomerated and leach ore are consistent with the 1998 scoping study costs. Metallurgical recovery rates for pulp-agglomerated and leach ore were taken from the latest pulp-agglomeration column leach data generated by McClelland Labs as reported in news release 10-25-00.
The base of the 3-D computer model was arbitrarily set at an elevation of 1250 meters and resource calculations and therefore pit shells did not extend below this level. More than 80% of the Main Zone deposit in the planned open pit mine area, is now classified as measured and indicated. Extending known high-grade mineralization (at a 5 g/t Aueq cutoff) for an additional 200 meters in depth below the pit bottom could add substantial ounces of gold and silver to the Main Zone deposit. This potential ore and that already identified in the East Dike, La Bohemia, Sur Zone and Norte Zone will add significantly to the ultimate size of the gold-silver deposit on the Dolores property.
Management believes that the updated model fairly represents the distribution and grade of mineralization, corresponding to drill results from more than 230 holes totaling 61,000 meters, historical mining and the detailed geology of the deposit.
Additional infill drilling and engineering work will be required to bring the open-pit minable resource to a final feasibility. Step-out drilling to test the high-grade mineralization beneath the pit and satellite mineralization along strike and adjacent to the main zone deposit is expected to significantly increase the overall Dolores gold and silver resource as the project goes forward.
On Behalf of the Board of Directors
Minefinders Corporation Ltd.
Mark H. Bailey, President and Chief Executive Officer
Safe Harbor Statement under the United States Private Securities Litigation Act of 1995: Statements in this release that are forward-looking are subject to various risks and uncertainties concerning the specific factors identified above and in the corporation's periodic filings with the Ontario Securities Commission and the U. S. Securities Exchange Commission. Such information contained herein represents management's best judgment as of the date hereof based on information currently available. The corporation does not intend to update this information and disclaims any legal liability to the contrary.