The company, which operates the multi-million ounce Dolores gold and silver mine in Mexico, made proceeds of $21.6 million from the sale of 14,073 ounces of gold and 266,129 ounces of silver at an operating cash cost of $597 per gold equivalent once sold.
Gold and silver production decreased in Q2 of this year to 13,783 ounces and 277,147 ounces from 23,336 ounces and 419,946 ounces in the same period last year, respectively.
“Gold and silver production in the second quarter reflects the lower grade ore stacked to the leach pad during the first quarter this year,” said Minefinders president and CEO Mark Bailey.
These results were in line with management expectations as previously flagged up by the company itself, hence the muted response from investors.
Bailey added: “However, production from phases 2 and 3 of the pit reached target levels during the second quarter, eliminating the need to supplement production by processing low-grade stockpile material. The average gold and silver grades stacked to the leach pad in June of 0.51 grams per tonne and 40.7 grams per tonne respectively reflect the higher grade ore that we are now starting to access. With grades increasing, tertiary screen repairs complete, optimization efforts well underway and the phase 2 leach pad ready for loading ore in August, production is expected to increase through the second half of this year.”
The company is also closer to producing a detailed feasibility study on the construction of a mill at Dolores, which would increase production from operations. During the second quarter the company continued to advance its 2010 exploration program and identified a new mineralized zone, the North Dome. The presence of underground and extended mineralization to the south of the open pit was also confirmed. In addition, drilling commenced at the Minefinders' grass-roots La Virginia property, for which initial results are said to be encouraging. Assay results are expected to be reported in the third quarter.
Early last month, the company released the results of an independently prepared pre-feasibility study (PFS) for its La Bolsa gold and silver project in Sonora, Mexico. The study contemplated conventional open pit mining methods at La Bolsa with low cost heap leach processing, considering two economic projections with both a ‘base case’ (effectively underestimating prices of gold and silver) and a ‘current spot’ case (as name suggests, considers gold and silver price at current spot level). Both of these cases came out with very buoyant results for the project and the company indicated it is a significant step in bringing the deposit into production. Going forward, Minefinders are going to consider their options over the next few months to best realize value from the project.
Separately, the company has made two new appointments to its team. Laurence Morris will join as vice president of operations, with effect from September 1, 2010, while Thomas Bagan has been hired as vice president of corporate development, beginning August 23rd. Laurence will be responsible for leading the strategic development of the company’s mining operations and Bagan will look after the company`s corporate and project development initiatives.
Minefinders has a market capitalization of C$595 million (US$585 million), with around US$21.3 million available in cash and cash equivalents as of June 30, 2010.
The company currently has four projects underway (La Virginia, Planchas De Plata, La Bolsa and Real Viejo) as well as its flagship, in production mining project (Dolores), all located in Mexico. The Dolores mine commenced production of gold and silver in November 2008 and is expected to produce more than 1.7 million ounces of gold and 64.4 million ounces of silver from heap-leach operations over a 15.5 year mine life.
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