Minefinders’ (MFL-T, MFN-x) Dolores open-pit mine in Chihuahua, Mexico, is expected to produce more than 1.7 million oz. gold and 64 million oz. silver over an estimated 15-year life.
So it was with great fanfare that the company recently announced the mine had produced its first gold and silver dor.
It’s an achievement that brings the Vancouver-based company one step closer to its goal of becoming a low-cost, mid-tier gold and silver producer once the mine moves into commercial production in the first quarter of next year.
Dolores is in the Sierra Madre Occidental range of northern Mexico, about 250 km west of the city of Chihuahua.
About 650,000 tonnes of ore is stacked on the leach pad at Dolores, (425,000 tonnes are presently under leach). The three-stage crushing and stacking rates are at 12,000 to 16,000 tonnes per day and are expected to reach design capacity (18,000 tonnes per day) by the end of the year.
In addition, Minefinders has fully commissioned its Merrill-Crowe plant.
According to a March 25 technical report, Dolores contains proven and probable reserves of 99.3 million tonnes grading 0.77 gram gold per tonne and 39.67 grams silver for total contained gold of 2.4 million oz. and 126.6 million oz. silver.
The company’s financial results may have dampened the mood somewhat, however, although losses were primarily due to spending at Dolores.Netlosses for the nine-month period rose to US$20 million (40 per share), up from US$12.1 million (25 per share) for the same period last year.
The higher losses for the nine months were due primarily to greater activity as Dolores moved toward production. Also contributing to the higher losses in the period were lower foreign exchange gains and lower interest income.
In the third quarter, Minefinders narrowed its losses. It posted a net loss of nearly US$6.8 million (14 per share), slightly less than its net loss of US$8.2 million (17 per share) in the same quarter of 2007.
Lower year-on-year losses in the third quarter were due to stockbased compensation expenses. Minefinders did not have stockbased compensation expenses in the third quarter of 2008, compared with US$4.2 million of stock-based compensation expensed in the same period a year earlier.
The company spent US$19.5 million on mineral property, plant and equipment in the third quarter, largely on construction and commissioning at Dolores and in pre-commercial production operating costs. By contrast, it spent US$22 million in the same period last year.
Expenditures for the nine-month period this year reached US$55.1 million, down from US$67.9 million in 2007. The decrease is due to the wind down of work construction at Dolores during the first quarter of 2008 and to the ongoing transition to commercial operations.
Coming in October, Minefinders had cash and equivalents of US$2.5 million and net working capital of US$2.4 million.
On top of that, the company had US$7 million available under a US$50-million revolving three-year credit line with Scotia Capital.
In October, it arranged a second revolving credit line with Scotia Capital for another US$10 million. The company expects to draw down the entire loan this year.
At presstime, Minefinders traded at about $4.74 per share. Over the last year, it has traded in a window of $4.05-14.05.
The precious metals mining and exploration company has about 49.8 million shares outstanding.
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