Approval of the environmental impact statement for the Dolores gold-silver project in Mexico pushed shares in Vancouver-based Minefinders (MFL-T) 60, or more than 6%, higher to $10.34 in afternoon trading in Toronto on May 9.
The approval and associated change of land use clears the way for construction and mining operations.
“These approvals are the culmination of several years of hard work on environmental compliance at our 100% owned Dolores project,” said Minefinders CEO Mark Bailey. “With these permits in hand, we can now accelerate construction of the project to meet our goal of pouring gold and silver at Dolores in the third quarter of 2007.”
Plans at Dolores call for an 18,000-tonne-per-day, open-pit heap-leach operation focussed on proven and probable reserves totalling 72.4 million tonnes running 0.84 gram gold and 44.5 grams silver per tonne, for around 1.9 million contained oz. gold and 103.5 million oz. silver.
Production over 12 years is pegged at 1.45 million oz. gold and 53.2 million oz. silver. The US$131.6-million project is expected to pay for itself in about 3.3 years.
Cash operating costs are estimated at US$224.25 per oz. gold and gold-equivalent silver, based on a 63:1 gold-silver ratio, or US$86 per oz. gold, net of silver credits. Total cash costs are estimated at US$237 per oz. gold and gold-equivalent silver.
Minefinders says much of the project funding is in place, and talks aimed at securing the remaining debt component are ongoing.
The company also has an agreement in principle to acquire the required 2 million cubic metres worth of surface water annually from the Rio Yaqui irrigation district. The agreement should be shortly finalized.
Meanwhile, the company has advanced detailed engineering and resource modelling in anticipation of the permit, and expects detailed engineering to be done by mid-June. Nearly half of the 60-km main access road has been completed to its full width.
The mining fleet and crushers have already been ordered, and initial bids for earthworks have been received. Ground breaking on the facilities areas is scheduled for the first week of June.
During construction, Minefinders will work on optimizing the mine plan and a 35,000-metre drill program aimed at expanding resources. The drilling will focus on known areas of mineralization outside of the mine plan. It will also hit untested targets. Mineralization at Dolores remains open in all directions.
Late last month, Minefinders added some 18.4 million tonnes of material to Dolores’ measured and indicated resources, and 5.7 million tonnes to the inferred category.
Measured and indicated resources are now pegged at 118.4 million tonnes running 0.8 gram gold and 39.1 grams silver per tonne, for around 3.1 million contained oz. of gold and 149 million oz. of silver. Inferred resources now tally to 33.8 million tonnes averaging 0.61 gram gold and 25.5 grams silver, for 667,000 oz. of gold and 27.7 million oz. of silver.
The estimates are based on a cutoff grade of 0.3 gram gold-equivalent per tonne, which in turn is based on a silver to gold ratio of 75 to 1.
The company said the increases came from in-fill and condemnation drilling that was not designed or expected to expand resources.
Some 6.5 million of the tonnes added to the measured and indicated resource is contained in the current open pit, and represents an additional 77,500 oz. of gold and 8.7 million oz. of silver at a 0.4 gram cutoff (approximate leach-grade cutoff). The material was previously characterized as waste.
New pit shells are being designed with the new measured and indicated resources taken into account.
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