Reserve and Resource Update For Dolores Mine
VANCOUVER, BC - Minefinders Corporation Ltd. reported updated gold and silver mineral reserves and resources for the Dolores Mine.
Fiscal 2010 marked the first meaningful exploration drilling program at Dolores since the commencement of the development of the mine in 2006 and this is the first update of reserves and resources for Dolores since 2008.
The new gold and silver reserves are current and are sufficient to sustain open pit production for the next 16 years at current throughput rates. The open pit gold and silver reserves base at the Dolores Mine consists of 2.024 million ounces of gold and 114.52 million ounces of silver, or 4.226 million gold equivalent ounces ("AuEq").
The new reserves are contained in 107.64 million tonnes of proven and probable ore having an average grade of 0.58 grams per tonne ("gpt") gold and 33.1 gpt silver and using appropriate dollar value cut-off grades based on assumed metal prices of $1,200 per gold ounce and $23 per silver ounce.
The total measured and indicated mineral resources used for estimation of the mineral reserves at Dolores incorporate all drilling through the end of 2010. The resources are currently estimated at 2.646 million ounces of gold and 139.5 million ounces of silver contained in 151.9 million tonnes. An additional 326,214 ounces of gold and 16.1 million ounces of silver, contained in 27.6 million tonnes are classified as inferred resources. Complete reserves and resources at various cut off grades for the Dolores Mine are presented in the attached tables.
The estimation of the new reserve and resource reflects several improvements in methodology over the prior 2008 model. The most significant of these improvements is the incorporation of mining dilution in the 2010 resource estimate to better predict dilution. The 2008 resource model was undiluted, with dilution applied in generating the reserve model.
Despite the reduction in gold grades in the reserve, there are a number of factors which increase the economic value of the project at lower grades. Firstly, current silver prices increase the importance of silver to the value of blocks in the estimation with a large number of blocks of moderate silver grade and low gold grade being economic at model silver prices of $23 per ounce. While reducing the average gold grade, inclusion of such blocks is proper practice. Secondly, higher combined gold and silver prices result in blocks of lower average grade being economic, lowering average grades of both gold and silver. Finally, portions of the pit expansion are in areas with lower average grades than were considered in the original pit design. Inclusion of these new reserves reduces the average grade of the total tonnes. At present, the updated 2010 model is reconciling closely to actual production tonnes and grades. The Company is continuing to assess the addition of a milling operation at the Dolores Mine and the development of the underground resource at Dolores. Some of the measured, indicated and inferred mineralization is currently located below and adjacent to the updated open pit plan. The Company is evaluating an underground exploration program to target this mineralization for underground mining. Any reserves identified through this program would be accretive to production and additional to the current reserves. One of the advantages of the scenarios being considered in the mill feasibility is that tonnage diverted from the leach process to the mill makes additional pad space available. This would allow for production of additional leach tonnes, further increasing the available reserves. In 2011, the Company expects to invest $3.5 million to complete approximately 20,000 metres of drilling at Dolores and will continue to focus on expanding both open pit and underground resources, specifically in the South Extension, North Dome and East Dike target areas, all of which remain open along strike and at depth. The company's address is 2288-1177 W. Hastings St.,Vancouver, BC V6E 2K3, (604) 687-6263, fax: (604) 687-6267.