Minefinders Corporation Ltd.
TSX : MFL
NYSE Amex : MFN

Minefinders Corporation Ltd.

April 08, 2010 15:42 ET

Minefinders Receives Positive Assessment of a Mill Addition at the Dolores Mine

VANCOUVER, BRITISH COLUMBIA--(Marketwire - April 8, 2010) -

(All figures are in United States dollars unless otherwise stated)

Minefinders Corporation Ltd. (TSX:MFL)(NYSE Amex:MFN) is pleased to report that it has received the results of an independently prepared draft pre-feasibility study (the "study") assessing the addition of a mill at its Dolores Mine in Mexico.

The mill addition scenario contemplated in the study represents one of a number of mill options under consideration by Minefinders. The results of the study support, and the Board of Directors has approved, progression to a detailed feasibility study on a mill addition at Dolores. In advancing the feasibility study, additional mill options will be reviewed and evaluated in the context of the economic considerations pertinent to Minefinders prior to a construction decision. Once Minefinders has reached a decision with respect to a mill addition, a technical report supporting the decision will be filed.

"We are very satisfied with the results of the study which has confirmed our expectation that the addition of a mill would be of benefit to the operation," said Mark Bailey, President and CEO. "We are committed to responsible growth at Dolores and are progressing on that basis. Minefinders is in the enviable position of having a profitable heap leach operation at Dolores which allows us to be thorough in investigating and considering a number of mill options. These include scenarios with lower initial capital costs that both capture the high grade ore in the open pit and provide the infrastructure necessary to develop a new underground mine at Dolores in the future if it is prudent to do so."

Study Highlights:

  • addition of a 6,500 tonnes per day mill to the existing 18,000 tonnes per day heap leach operation with anticipated production from the mill commencing in the second quarter 2012;
  • combined mill and heap leach production from the current open pit mine of 1,731,693 ounces of gold and 74,239,878 ounces of silver over an 11 year mine life;
  • life of mine average cash operating costs (excluding royalties) estimated at $348 per gold equivalent ounce; and
  • initial capital costs, including a $23.5 million contingency and accuracy provision, of $163.3 million with total life of mine sustaining capital costs for both the mill and heap leach operation estimated at $42.5 million.

The production projection is based on the 2007 resource estimate as audited by the independent engineering firm of Chlumsky, Armbrust and Meyer ("CAM") of Denver, Colorado. A NI 43-101-compliant technical report in support of this updated resource audit was filed on July 27, 2007. The CAM resource was updated for use in the study using the current topography of the open pit to account for mined-out ore.

The study was prepared for Minefinders by GRD Minproc Limited. David (Dan) Greig, employed by GRD Minproc Limited as Principal Geologist, is the Qualified Person responsible for the overall preparation of the report.

Dolores Mine Mill Addition Economics
The table set out below summarizes the results of the findings from the study. Base case metal price assumptions of $825 per ounce gold and $14 per ounce silver were used in the economic analysis.

  Base Case Spot Case
Gold $825 per ounce $1,100 per ounce
Silver $14 per ounce $17 per ounce
     
NPV1 0% discount – pre-tax $1.178 billion $1.865 billion
NPV1 5% discount – pre-tax $0.861 billion $1.388 billion

IRR2 – pre-tax

17%

48%

1Net present value of the combined heap leach and mill operation.
2Internal rate of return accounting solely for the impact of the mill addition.

Dolores Upside Potential

A number of promising exploration targets were previously identified on the 27,000 hectare Dolores Mine concessions. Minefinders has refocused on exploration and testing of mineralized deposits adjacent to the main deposit. An 18,000 metre drilling program is presently underway with the goal of expanding resources and reserves at Dolores. In addition, Minefinders is investigating options to commence exploration of the underground mineralization below the current open pit. With the limited work to date, there appear to be significant opportunities to potentially increase current reserves at Dolores.

The mill addition in the study does not take into account the significant high-grade gold and silver mineralization already identified and reported that lies below and up to one kilometre peripheral to the pit (see attached tables listing a selection of these previously reported drill results). Taking these drill results into consideration, it is expected that the addition of a mill at Dolores would unlock this upside by providing the infrastructure necessary to process high-grade material from potential future underground operations in addition to the higher-grade ore in the existing open pit resource.

Qualified Person

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

About Minefinders
Minefinders is a precious metals mining and exploration company and operates the multi-million ounce Dolores gold and silver mine in Mexico. The Company continues its exploration efforts on other prospective projects in Mexico.

Forward Looking Statements

This release contains certain "forward-looking statements" and "forward-looking information" as defined under applicable Canadian and U.S. securities laws. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may," "will," "expect," "intend," "estimate," "anticipate," "believe," "continue" or similar terminology. Forward-looking statements are based on forecasts of future results, estimates of amounts not yet determinable and assumptions that, while believed by management to be reasonable, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Certain of the statements made herein by Minefinders are forward-looking and subject to important risk factors and uncertainties, both known and unknown, many of which are beyond the Company's ability to control or predict. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements. Those factors are described or referred to under the heading "Risk Factors" in Minefinders' Annual Information Form for the year ended December 31, 2009 and under the heading "Risks and Uncertainties" in Minefinders' Management's Discussion and Analysis for the year ended December 31, 2009, both of which are incorporated by reference herein and are available on SEDAR at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Minefinders does not undertake to update any forward looking statements that are incorporated by reference, except in accordance with applicable securities laws. There is no assurance that the Company will proceed with the construction of the mill addition described in the above-mentioned study and there is no assurance that the results of the study will be realized if the mill addition is constructed.

Table I – A selection of drill intercepts from beneath and outside of the current pit

The selection of previously reported drill intercepts in this table occur over 875 metres of strike length from Section 1900 to 2750 at depths ranging from 20 to 200 metres below the life of mine open-pit at Dolores.

DDH No. Section (m) Intercept
metres
Width metres* Width
feet
Au grams per tonne ("gpt") Ag gpt Aueq** gpt
D-389 1900 225-235.5 10.5 34.4 6.712 198.3 9.763
    includes: 2.5 8.2 15.837 331.1 20.931
               
D-390 1925 245-255 14.0 45.9 4.280 106.2 5.914
    253-255 2.0 6.6 8.260 258.3 12.234
               
D-352 1925 177.5-186 8.5 27.9 4.589 126.1 6.529
    includes: 1.5 4.9 10.540 243.1 14.280
               
D-38 1975 278-286 8.0 26.4 3.736 63.9 4.719
    includes: 2.0 6.6 7.560 171.4 10.197
               
D-354 2000 191-199 8.0 26.4 12.047 380.6 17.902
    includes: 3.5 11.5 24.361 821.7 37.003
               
D-107 2000 279.9-287.9 8.0 26.4 11.125 528.9 19.262
    includes: 4.0 13.1 19.389 1026.9 35.187
               
D-298 2025 368-374 6.0 19.7 14.273 924.3 28.493
               
D-346 2050 407-411 4.0 13.1 2.074 59.0 2.982
               
D-85 2225 267.1-272.1 5.0 16.4 3.620 13.9 3.834
and   279.7-282 2.3 7.5 15.669 277.7 19.941
               
D-274 2400 402-410 8.0 26.4 4.817 116.35 6.607
    includes: 4.0 13.1 7.571 141.65 9.750
               
D-394 2500 423-425 2.0 6.6 8.770 182 11.570
               
D-326 2600 500-510 10.0 32.8 3.914 21.0 4.237
    includes: 2.0 6.6 8.020 12.4 8.211
               
D-212 2625 474-478 4.0 13.1 24.863 323.1 29.834
               
D-193 2625 480-487 7.0 23.0 21.126 43.24 21.791
    includes: 1.0 3.3 119.863 227.5 123.363
               
D-260 2750 394-400.7 6.7 22.0 10.919 135.7 13.007
    includes: 1.7 5.6 19.931 476.1 27.256
               
D06-430 2775 84.0-98.0  14.0 45.9 0.651 41.4 1.288
    282.0-432.0 150.0 492.2 3.62 8.9 3.757
    Inc. 357.0-373.0  16.0 52.5 29.8 14.7 30.026
               
D06-443  2600 250.0 -275.0  25.0 82.0 1.28 80.6 2.520
    Inc. 268.0-275.0 7.0 22.97 3.73 111.4 5.444
    352.0-353.0 1.0 3.3 17.69 2095.5 49.928
    388.0-390.0  2.0 6.6 7.27 1,104.5 24.262
    426.0-530.0 104.0 341.2 2.92 52.9 3.734
    Inc. 460.0-485.0  25.0 82.0 6.42 117.5 8.228
    Inc. 501.0-522.0  21.0 68.9 3.70 29.6 4.155
    With 514.0-519.0 5.0 16.4 6.98 31.4 7.463
               
D06-449 2600 242.0 – 279.0 37.0 121.4 0.37 52.1 1.172
    Inc. 259.0-264.0  5.0  16.4 0.92 144.2 3.138
    277.0-279.0  2.0  6.6 2.81 105.5 4.433
    446.0-527.0 81.0 265.8 3.12 39.6 3.729
    Inc 446.0-452.0  6.0  19.7 19.62 294.1 24.145
    And 483.0-492.0  9.0  29.5  6.24  43.6 6.911
    And 496.0-498.0  2.0  6.6  5.38  9.8 5.531
    And 502.0-504.0  2.0  6.6  7.49  15.6 7.730

*Intercept widths are assay intervals and not necessarily true width.
**Gold equivalent grade based on 65:1, gold: silver, ratio.

Table II – A selection of drill intercepts from the East Dike
The selection of previously reported drill intercepts in this table occur over 350 metres of strike length from Section 1,850 N through 2,200 N

RC Drill Hole No. Section (m) Intercept
metres
Width metres* Width
feet
Au grams per tonne ("gpt") Ag gpt Aueq** gpt
R-364 2175 138.7-140.2 1.5 5 17.660 61 18.598
               
R-363 2175 0-83.8 83.8 275 2.013 76.4 1.103
    includes: 30.5 100 4.921 139.4 7.066
    includes: 9.1 30 13.966 283.3 18.324
               
R-359 1950 0-41.1 41.2 135 4.066 148.1 6.344
    includes: 9.1 30 14.020 319.2 18.931
               
R-347 2150 53.3-54.9 1.5 5 11.245 544.8 19.627

* Intercept widths are assay intervals and not necessarily true width.
**Gold equivalent grade based on 65:1, gold: silver, ratio.

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