Successful Commissioning Of The Dolores Mines
The Company commenced pre-commercial production of gold and silver in November of 2008. Financial and operating results reflect the transition from pre-commercial operations to the commencement of commercial production at the Dolores Mine effective May 1, 2009.
Despite a four-day federally mandated shut down due to the swine flu outbreak in
Second quarter sales proceeds were $26.0 million compared with $16.1 million in the first quarter of 2009. Second quarter sales volume totaled 22,108 ounces of gold at an average realized price of $937 per ounce and 369,532 ounces of silver at an average realized price of $14.19 per ounce. Minefinders sold 13,313 ounces of gold in the first quarter of 2009 at a realized price of $939 per ounce and 273,381 ounces of silver at a realized price of $13.18 per ounce.
In the second half of 2009, Minefinders expects to sell between 50,000 and 60,000 ounces of gold and between 1.2 million and 1.3 million ounces of silver at an operating cash cost of approximately $420 to $475 per gold-equivalent ounce assuming a 71 to one silver to gold ratio.
For all of 2009, expected sales are between 85,000 and 95,000 ounces of gold and between 1.8 million and 1.9 million ounces of silver at an operating cash cost of approximately $450 to $485 per gold-equivalent ounce, assuming the same 71 to one silver to gold ratio for the second half of 2009. All gold and silver production is from the Dolores Mine.
Due to delays in relocating the old Dolores village, mining in the fourth quarter of 2008 and in the first and second quarter of 2009 has focused on the north end of the open pit which is characterized by lower grade ore, particularly with respect to silver. The production and cost outlook above reflects this delay.
Subsequent to the end of the second quarter, Minefinders successfully completed the relocation of the remaining residents from all areas that will be affected by future mining operations. With full access now available, the Company is accelerating construction of haul roads and pre-stripping to expose the high-grade central dome area of the deposit. Access to this higher grade ore is expected in November of this year with the benefit of higher production and lower cash costs reflected in the second quarter of 2010.
"With the relocation of the village complete, we now have access to the heart of the Dolores deposit. While the delay in accessing the high-grade gold and silver ore present in the central dome area has affected our 2009 production outlook, the full relocation of the old Dolores village eliminates a significant obstacle to the efficient operation of the mine and concludes a protracted process of negotiation," said Bailey. "We look forward to continued collaboration with the local communities to ensure that the social and economic benefits of the operation can be realized for all stakeholders."
At June 30, 2009, the Company had $21.4 million in cash and cash equivalents, net working capital of $31.5 million and $4.5 million available on the $60 million revolving credit facility with Scotia Capital after paying down $2.5 million on the facility during the quarter. The net proceeds from the production and sale of gold and silver, working capital on hand and funds available through its revolving credit facilities will allow the Company to fund its current and projected cash requirements.
The company’s address is