Minefinders Corp (TSE:MFL) said Thursday that president and chief executive Mark Bailey plans to present at the third Annual Dahlman Rose & Co. emerging miners conference.

The conference, which intends to showcase emerging mining companies, is slated to take place on January 13 at 12:15 p.m. Eastern time.

Dahlman Rose & Co. is an investment bank that specializes in the global natural resources supply chain and it will host the conference on January 12 to 13, in New York City.

The symposium is to feature seminars by top executives from more than 40 emerging mining companies.

Minefinders noted that the presentation will be webcast live with supporting slides and can be viewed on its site atwww.minefinders.com.

Vancouver-based Minefinders is a precious metals mining and exploration company and operates the Dolores gold and silver mine in Mexico. The company has other mineral property interests in northern Mexico and in the United States, which are in the early exploration stage.

Shares of gold miner fell slightly by three cents, or 0.27 percent, reaching $11.22 each in late afternoon trade today in Toronto.

For the quarter that ended September 30, net loss narrowed to $1.3 million, or 2 cents per share, way down from a loss of $11.8 million, or 18 cents per share a year earlier.

Adjusted for non-recurring items, net income for the latest quarter was $13.2 million or 16 cents per share.

Revenue soared to $53.8 million from $13.6 million in the year ago period.

Minefinders president and chief executive officer, Mark Bailey, said: "With over 53,600 ounces of gold and over 2.65 million ounces of silver produced and sold for the nine-month period of 2011, we continue to be on track to meet our guidance for 2011.

"We are cash flow positive and with over $228.0 million in cash reserves, we are well positioned to unlock the potential of our existing assets and steadily increase gold and silver production."

In a conference call, Bailey said the company "continued to progress its goals" during its most recent quarter and was "on track" to meet its 2011 production guidance.

Commenting on the La Virginia project, Bailey said it was a "grassroots discovery" that would require "a lot of work" to bring up to a resource base.

Overall, Bailey said that Minefinders was "well-positioned" to unlock additional potential from its assets.

The Vancouver-based company sold 32,222 ounces of gold equivalent in the third quarter as Minefinders produced 16,279 ounces of gold, up 38 percent from a year earlier and 692,121 ounces of silver, up 86 percent on last year, primarily due to higher average gold and silver grades stacked to the leach pad in immediately preceding quarters.

Operating cash cost was $506 per gold equivalent ounce sold, much lower than the $743 per ounce seen a year ago.

Minefinders said that the average realized gold price in the quarter was $1,668 an ounce and the average silver price was $39.22 an ounce, up sharply from $1,214 and $18.74, respectively, a year earlier.

Looking ahead, the company expects production to improve in the fourth quarter, as Minefinders shipped over 7,900 ounces of gold and over 274,000 ounces of silver during October.

For the full year, Minefinders stood by its production guidance of 65,000 to 70,000 ounces of gold and 3.3 to 3.5 million ounces of silver at a cash operating cost between $450 and $500 per gold equivalent ounce.

At its flagship Dolores mine in Mexico, the company said its board has approved construction of a mill, with a capacity of 6,500 tonnes per day to complement the existing heap leach operation at the project, with construction due to begin in the first quarter of 2012, subject to permitting.

At the same time, the company is accelerating the development of an underground exploration program below the existing open pit at Dolores.

Dolores is located in the Sierra Madre Occidental Range of northern Mexico, approximately 250 kilometres west of the city of Chihuahua. The mine has measured and indicated resources of 2.646 million ounces of gold at 0.54 grams per tonne (gpt) and 139.51 million ounces silver grading 28.6 gpt, according to data released at the end of 2010.

The company's board also approved construction of a mine at the La Bolsa project in Mexico, which has an initial mine life of approximately six years, with current proven and probable mineral reserves of 316,000 ounces of gold and 4.5 million ounces of silver. Minefinders said it already started the recruitment of senior personnel necessary to construct and operate La Bolsa.

At the La Virginia project, exploration drilling is progressing and results continue to be encouraging, Minefinders said. Two core rigs are currently focused on the project, with plans to add a third before the end of the year.
Minfinders stock ended Monday's session up 0.12 percent at $16.06. For the year to date, the stock has gained 47 percent.

At quarter-end, the company had $228.6 million in cash and equivalents, an increase from $166.9 million at year-end 2010.

"We are pleased with our results for the second quarter,” Mark Bailey Chief Executive of Minefinders said in a statement.

“Our initiatives to improve operations at Dolores are paying off and we are also benefiting from higher metal prices.” 

Revenue more than doubled to $73.1 million in the second-quarter that ended June 30. That compares with $21.6 million in the year-earlier quarter. 

Gold production rose 42% to 19,571 ounces, up from 13,783 ounces. 

Minefinders produced one million ounces of silver, compared with 277,147 ounces, in the previous quarter.

The company said gold and silver production grew because of higher average gold and silver grades stacked to the leach pad in previous quarters. 

Gold and silver grades of ore stacked to the leach pad averaged 0.49 grams per tonne and 40.85 grams per tonne, respectively. 

It said the increase stems from sequencing in the open pit and mining practice improvements which have decreased dilution. 

The company maintained its production guidance for 2011 logged at 65,000 to 70,000 ounces of gold and 3.3 million to 3.5 million ounces of silver at a cost of $450 and $500 per gold ounce. 

It expects capital expenditures to be $45.4 million, up from its previous forecast of $39.5 million on account for buying three 100 tonne haul trucks and one mining excavator. 

Minefinders continues to assess a milling operation and the development of an underground resource at Dolores, while exploration drilling continues at La Virginia. 

All the while, permitting is underway and firm has been contracted to provide detailed engineering to advance the La Bolsa project toward a construction decision. 

Vancouver-based Minefinders is a precious metals mining and exploration company and operates the Dolores gold and silver mine in Mexico. The company has other mineral property interests in northern Mexico and in the United States, which are in the early exploration stage.

For the three months ending June 30, the Vancouver-based company produced 19,571 ounces of gold and 1.0 million ounces of silver, compared to 13,783 ounces and 277,147 ounces, respectively, a year earlier.

As a result, Minefinders sold more ounces of the precious metals, generating $73.1 million in sales, versus $21.6 million in the second quarter of 2010. The gold producer sold nearly 49,000 ounces of gold equivalent, up from 18,256 ounces a year ago.

Full financial and operating results for the quarter are scheduled for release after market close on Wednesday August 3rd, the company said.

Minefinders is a precious metals mining and exploration company, operating the multi-million ounce Dolores gold and silver mine in Mexico, which has

enough reserves to sustain open pit production at the site for the next 16 years, at current throughput rates.

Last month, the company also announced it intersected 6.46 grams per tonne (g/t) of gold equivalent over 67 metres at its La Virginia mine near Hermosillo in Sonora State, Mexico. The 34,000 hectare La Virginia project is located 100 kilometres north-northwest of the company's Dolores Mine.

The Vancouver, B.C.-based company began exploration drilling at the El Campo Santo, Las Huatas and Con Virginia zones in 2010.

Based on the results of the 2010 program, core drilling in 2011 focused on the Las Huatas zone, where gold assays in hole LV11-36C ranged up to 2.0 metres averaging 13.0 g/t of gold, with five separate assay intervals exceeding 3.0 gpt of gold.

Silver assays ranged up to 1,042 g/t of silver over 2 metres, with five assay intervals exceeding 500 g/t. These high-grade intercepts are contained within an overall mineralized interval of 67.0 metres, averaging 6.46 g/t gold equivalent, or 2.33 g/t gold and 247.5 g/t silver.

The company said the high-grade zones in the Las Huatas Zone remain open to depth and laterally along strike.

Other highlights at Las Huatas included two metres of 2.69 g/t gold and 215.1 g/t silver in hole LV11-30C, and 1.96 g/t gold and 189.5 g/t silver over 4.95 metres, including 2.86 g/t gold and 273.9 g/t silver over 2.95 metres in hole LV11-33C.

"We are encouraged by the success of our initial exploration program on the La Virginia property, but with multiple targets remaining to be tested we have a lot of work to complete before we will know the true significance of this discovery," said vice president of exploration, Tench Page.

Highlights from the Con Virginia zone include 2.2 metres of 2.76 g/t gold and 225.4 g/t silver in hole LV11-29C, including 4.44 g/t gold and 363.3 g/t silver over 1.2 metres.

Intercepts from the El Campo Santo zone, located one kilometre north of Con Virginia, are similar to those observed above the 1,800 metre elevation in the Las Huatas zone, the company said, but this program is still in the early stages. New drilling is currently testing the potential of deeper levels of the system.

The precious metals mining and exploration company, whose stock on the Toronto Stock Exchange has jumped 1.19% to $11.90 per share, has drilled over 13,000 metres in 42 completed core holes at the La Virginia property to date. So far, the company has drilled nearly half of its 12,750 metre 2011 drilling target as it advanced towards establishing an NI 43-101 compliant resource.

The 34,000 hectare La Virginia project is located 100 kilometres north-northwest of the company's Dolores Mine.

During the three month period ended March 31, 2011, Vancouver headquartered Minefinders produced 17,812 ounces of gold, 956,760 ounces of silver which generated revenues of $53.2 million.  In the quarter, the company delivered 37,698 gold equivalent ounces for sale. 

Arguably most encouraging of all, Minefinders produced its precious metals at an average cash cost of $472 per gold equivalent ounce sold, a sharp improvement on previous quarters. Adjusted net income for the quarter came in at $19.0 million or 24 cents share, while long term debt fell from $46.5 million at the end of 2010 to $29.7 million at the end of March.

"As a result of continued improvement in production, declining cash costs and increasing margins, we have made a good start in 2011. Our cash position continues to grow and we continue to reduce our debt,” Mark Bailey, President and CEO, commented.

“With precious metals prices at record levels, we are well poised to benefit from current market conditions. We remain focused on executing our growth strategy at Dolores through the assessment of a mill addition and underground expansion options as well as the advancement of the Company's other development and exploration projects."

For the full year, Minefinders expected to produce between 65,000 and 70,000 ounces of gold and 3.3 to 3.5 million ounces of silver.  Cash operating costs are forecast to be between $450 and $500 per gold equivalent ounce – well below many other producers in its peer group.

The company’s investment case was further buoyed by an updated gold and silver mineral reserves estimate for Dolores, with enough reserves to sustain open pit production at the site for the next 16 years, at current throughput rates.

The company said the new reserve estimate included all drilling through the end of 2010, a year that it marked the first "meaningful" exploratory drill program at Dolores since the start of the mine's development in 2006.

As at year-end 2010, the open pit gold and silver reserves base at Dolores consisted of 2.024 million ounces of gold and 114.52 million ounces of silver, or 4.23 million gold equivalent ounces.

The new reserves are contained in 107.64 million tonnes of proven and probable ore, having an average grade of 0.58 g/t gold and 33.1 g/t silver, based on metal prices of $1,200 per gold ounce and $23 per silver ounce.

Minefinders said that the updated reserves model is the first since 2008, and included "several improvements in methodology" over the last estimate, such as the inclusion of mining dilution to better predict dilution. In addition, drill hole assays were capped separately for gold and silver, with the additional capping lowering the average grades, allowing for a more conservative model.

Despite the reduction in gold grades from the 2008 reserve, the company noted that the economic value of the project is still increased, due to higher silver and gold prices.

The reserve estimate was based on updated measured and indicated resources of 2.65  million ounces of gold and 139.5 million ounces of silver, contained in 151.9 million tonnes.

An additional 0.33 million ounces of gold and 16.1 million ounces of silver, for 27.6 million tonnes, are classified as inferred resources.

Currently, some of these resources are below the updated open pit plan, which means there is potential for expansion and additional value.

As such, Minefinders is considering an underground exploration program to develop the underground mineralization. The company said that any reserves identified through such a program would no doubt add to production and to current reserves.

The company is also in the process of assessing the feasibility of adding a milling operation to the mine, which would allow for the production of additional leach tonnes.

In 2011, the company expects to invest $3.5 million to complete approximately 20,000 metres of drilling at Dolores, as part of its plan to focus on expanding both the open pit and underground resources.

Specifically, the drilling will target the South Extension, the North Dome, and the East Dike areas, all of which remain open along strike and at depth.

For the three months ending March 31, 2011, the company sold 37,698 gold equivalent ounces for revenues of $52.3 million, compared to 23,650 ounces for sales of $26.4 million in the year-ago period.

Silver production rose to 956,760 ounces from 245,086 ounces a year earlier, while gold production dropped to 17,812 ounces from 18,778 ounces in the first quarter of 2010.

The company said quarterly production was in line with its 2011 annual production forecast of 65,000 to 70,000 ounces of gold and 3.3 to 3.5 million ounces of silver.

Operating and cash costs for the quarter were not calculated as of yet, it said.

"The positive trend established in the fourth quarter 2010 has continued in the first quarter 2011, with our best ever quarterly production and sales performance from the Dolores Mine thus far," said president and CEO Mark Bailey.

Minefinders plans on releasing an updated reserve and resource estimate for its Mexican Dolores gold-silver mine by the end of April. The company's full financial and operating results for the quarter are due to be released after market close on May 4.

Shares of Minefinders rallied more than 4% on Wednesday to $14.00 as of 10:08am EST.

For the three months ending December 31, 2010, the Vancouver-based company posted net income of $12.1 million, or $0.18 per share, compared to $4.3 million, or $0.07 per share, in the prior year period.
Revenues during the quarter jumped 13% to $31.3 million.

In the fourth quarter, Minefinders produced 511,544 ounces of silver compared to 296,992 ounces a year earlier, while gold ouput was down to 16,102 ounces from 20,960 ounces in the fourth quarter of 2009. This was due to a tear in the company's phase 1 leach pad at the Dolores mine in Mexico, which had its first full year of commercial production in 2010.

However, Minefinders said that the successful commissioning of its phase 2 leach pad in September last year is significantly ramping up production and recoveries. The company is also repairing the phase 1 leach pad in an effort to recover the large amounts of silver and gold remaining, expected to be completed later this year.

The precious metals producer benefited from higher commodity prices, which helped offset lower gold production and volumes sold. The average realized prices for gold and silver in the fourth quarter were $1,375 and $27.72, respectively, up from $1,108 and $17.71 a year earlier.

Total cash costs per gold equivalent ounce also fell to $511 compared to $625 in the fourth quarter of 2009.

Looking ahead, the company forecast higher gold and silver production in 2011. It expects to produce and sell approximately 65,000 to 70,000 ounces of gold and roughly 3.3 million to 3.5 million ounces of silver.

"While gold production is expected to remain relatively constant through the year, silver production is expected to trend up quarter to quarter through 2011 due to increasing volume and duration of ore under leach," the company said in a statement.

As the company continues to improve and expand operations at Dolores, an updated resource and reserve estimate is expected for the mine by the end of the first quarter.

On a conference call this morning, analysts seemed encouraged with the company's optimization plan for Dolores and its guidance for the year. The company rose 8.8% on Friday to trade at $11.00 as of 12:52pm EST.

Highlights released this morning from the emerging mid-tier gold producer surrounded drilling completed at the tail end of 2010.  Drilling was focused on the southern end of the Dolores open pit mine plus additional drilling targeting higher grade veins earmarked for potential underground development.

Highlights included hole D10-562C that intercepted 42 metres averaging 12.44 grams per tonne gold with 75.3 silver from 178 metres to 220 metres of depth.  The zone of mineralization was cut approximately 50 meters below the current life of mine open pit.  It included a higher grade interval of 12 meters averaging over 40 grams per tonne gold and 163 grams per tonne silver.

Other high-grade intercepts include holes D010-546 with 4 metres averaging approximately 13.75 grams per tonne gold and 612 grams per tonne silver.

Minefinders noted that numerous other holes encountered anomalous gold with elevated silver values, such as D010-541 which intercepted 16 metres averaging 52.75 grams per tonne silver with 0.82 grams per tonne gold.

“Additional drilling in these areas is planned to test for higher gold grades below the high-grade silver zone,” the company added. Minefinders is also planning to complete an updated resource statement for Dolores this quarter.

Meanwhile at the La Virginia property – which is 100 kilometres north-northwest of the Dolores mine - drilling has been focused on additional drilling in the central structural zone. Highlights include  9.6 metres of approximately 3.1 grams per tonne gold with 195 grams per tonne silver from 175 meters in hole LV10-25C, which also included a higher grade 0.7 metres of 14 grams per tonne gold and 1,194 grams per tonne silver and 0.9 metres of 14 grams per tonne gold and 606 grams per tonne silver.

Around 1.2 kilometers south of the central structural zone, a second rig has turned up interesting results too, including  hole LV10-13C  which intersected 3 metres averaging 5.25 grams per tonne gold and 329 grams per tonne silver within a larger 23 metre interval averaging 1.14 grams per tonne gold and approximately 79 grams per tonne silver from 278.5 metres.

“Exploration to date within the overall La Virginia area has defined several mineralized trends that extend for a total strike length of over 20 kilometre,” Minefinders noted to investors. “Seven target areas have been defined to date and the central La Virginia zone is the only one that has been drill tested.”

Mark Bailey, President and CEO of Minefinders added that the company was very pleased with results from both Dolores and La Virginia, and the company was working towards a maiden resource for the latter.

For the quarter, the company produced 16,102 ounces of gold and 511,544 record ounces of silver. This compares to the forecast reported in November of 11,000 to 12,000 ounces of gold, and 500,000 to 600,000 ounces of silver.

During the period, sales proceeds totaled $31.2 million, also a quarterly record, on the sale of 14,150 ounces of gold and 423,950 ounces of silver, or 22,690 gold-equivalent ounces.

The company said it plans to increase gold and silver production for its Dolores mine in Mexico this year, as in the fourth quarter, Minefinders successfully commissioned the new Phase 2 leach pad.

Approximately 1.4 million tonnes grading 0.60 grams per tonne gold and 56.96 grams per tonne silver, containing 27.2 thousand ounces of gold and 2.6 million ounces of silver, were stacked to the Phase 2 leach pad during the quarter.

On a gold-equivalent basis, material stacked on the leach pad was the highest grade since the beginning of operations at the Dolores Mine, Minefinders said.

"With production increasing from the Phase 2 leach pad, we look forward to improved gold and silver production from Dolores in 2011," said president and CEO Mark Bailey.

"The resulting cash flow and our strong balance sheet leave us fully funded to execute our growth strategy through continued development and optimization at Dolores and exploration at our other prospective properties."

For the full year 2010, the company produced 56,110 ounces of gold and 1.2 million ounces of silver. Sales proceeds totalled $92.9 million for the year.

Full 2010 financial results are due to be released on February 24th, 2011.

A syndicate of underwriters, led by Scotia Capital and BMO Capital Markets, purchased 13.65 million common shares from Minefinders for sale to the public at a price of C$11.10 per common share.

The company also granted the underwriters an option, for a period of 30 days following the closing of the offering, to purchase up to an additional 2.04 million common shares to cover over-allotments, if any.

Minefinders operates the multi-million ounce Dolores gold and silver mine in Mexico.

The company agreed with a syndicate of underwriters to sell 13.65 million common shares at a price of C$11.10 per share.

Minefinders has also given the underwriters an over-allotment option, exercisable in whole or in part for a period of 30 days after closing of the deal, to purchase up to an additional 2.0 million common shares at the offering price.

The company said that the new funds would be used for future expansion and mill construction at the Dolores mine in Mexico, as well as continued development of the La Bolsa property, and future debt repayments.

The offering, which will be led by Scotia Capital and BMO Capital Markets, is expected to close around December 20, 2010, subject to regulatory approvals.

The renewal was structured as an amendment to the existing credit agreement and extends the term of the facility an additional three years to December, 2013.

Minefinders is a precious metals mining and exploration company and operates the multi-million ounce Dolores gold and silver mine in Mexico.

The company was up 0.9% on Thursday, trading at $10.95 as of 12:34pm EST.

In consideration for the purchased notes, Minefinders has issued new 4.50% convertible senior notes, due December 15, 2015, in the principal amount of US$36.2 million.

After the purchase, approximately US$52.1 million will be left outstanding of the original principal amount of US$85.0 million for the 2011 notes.

The amount of principal that was bought and cancelled was convertible into approximately 3.1 million shares, while the new notes issued can be exchanged for roughly the same amount.

Minefinders is a precious metals mining and exploration company and operates the multi-million ounce Dolores gold and silver mine in Mexico.

Significant grades encountered to date include 2.0 metre intervals assaying 73.24 g/t gold and 4,986.7g/t silver in hole DD-540, 41.76g/t gold and 722.1g/t silver in DD-522 and 9.57g/t gold with 637.7g/t silver in DD-518.

On a gold equivalent basis, using a silver to gold ratio of 60 to 1, these intervals represent 156.3g/t Aueq, 53.8g/t Aueq and 20.2g/t Aueq, respectively.

The south extension deep core drilling program is designed to explore for high-grade underground potential immediately south of the current open pit deposit, in a target area 600 metres long by 300 metres wide.

According to the company, 30 drill holes for a total of 13,200 metres have been completed during the last several months, with the results to date "highly supportive" of future delineation of underground reserves.

Minefinders is currently assessing conceptual underground mining scenarios to focus deep drilling targets and ultimately determine the economic feasibility of operating an underground mine at Dolores, in addition to the current open pit operation.

The company is also conducting a study to construct a mill at Dolores, which would treat both high-grade ore from the open pit and process this additional underground ore, it said.

Further drilling would be required to upgrade the mineralization of the south extension target into reportable resource categories, said the company.

The drilling program, the first ever conducted on this zone, began in April this year, and is focused on testing the potential depth extent of high-grade mineralization exposed over a strike length of five kilometres and width of two kilometres within the central portion of the zone.

Assay results from the first nine drill holes include intervals of 2.0 metres intersecting12.17 grams per tonne (gpt) gold (Au) with 51.5 gpt silver (Ag) in hole LV 10-4C, and 1.1 metres of 5.75 gpt Au with 434.3 gpt Ag in hole LV 10-8C.

More widespread intercepts include 27.0 metres containing 1.01 gpt Au with 89.9 gpt Ag in hole LV 10-7C, with internal higher grade intervals.

“We are encouraged by this new discovery, particularly as it is in the initial stages of the first drill program ever conducted at La Virginia. As our understanding of this large mineralized system evolves, we will expand our drilling program,” said vice president of exploration Tench Page.

The drilling found that mineralization occurs in epithermal quartz-chalcedony stockworks, veins and hydrothermal breccias with widths that can vary from one metre to greater than 30 metres, the company said.

"Drill intercepts in the highest portions of the system display high-level alteration and mineralogy including abundant chalcedony suggesting that for most of the zone the bonanza gold and silver portion of the system remains intact at depth," Minefinders said in a statement.

Approximately 2,770 metres of core drilling in 11 widely spaced drill holes has been completed along three kilometres of the overall system.

Results indicate vertical continuity of mineralization over more than 200 metres of depth for some of the holes.

The ongoing drill program will continue to target the central portion of the La Virginia zone where most of the historic workings are located, which have defined a mineralized trend that extends for a total strike length of up to 15 kilometres. 

As greater access is attained through the construction of new drill roads, current drilling will test progressively farther north, it said.

The La Virginia project is located approximately 220 kilometres east-northeast of Hermosillo, Sonora, Mexico and is 100 kilometres north-northwest of the company’s Dolores mine. 

The land package encompasses more than 34,000 hectares within a geologic environment similar to that of the Dolores gold and silver deposit, and comprises seven separate large mineralized areas identified by the company.

Please give investors a brief introduction to Minefinders and the company strategy for creating value.

Minefinders is a gold and silver producer. We have our first mine in production in Mexico; it’s called the Dolores Mine. It’s a large open pit gold and silver producer, heap-leach operation. We’re going to get up to about 120,000 ounces of gold production per year and about four million ounces of silver when we reach steady state at the end of this year, early next year. 15 year mine life, it’s an exciting project.
We have a portfolio of other properties including La Bolsa, La Virginia which we’re drilling on and La Bolsa in pre-feasibility and a good package of six properties in North America. We feel we’re a good value opportunity for the marketplace with 65 million shares outstanding and an operating mine producing gold and silver, and selling it at least at current market prices.
Other projects are coming along in our pipeline including La Bolsa and La Virginia. We don’t see ourselves trading at the value that our peers do; we’re trading at discount from net asset value or not trading at the same metric as most other producer’s trade at. We expect to see that re-rating as a producer in the next quarter too, as we achieve steady state production.

Minefinders has just announced a discovery of a new zone of mineralization, a couple of hundred metres to the north of the main deposit at your Dolores flagship project. What can you tell investors about this discovery, Mark?

Well, we started drilling again at Dolores having gone through the construction phase. It, kind of, disrupted our drilling and due to further exploration, we reinitiated that a year ago and in the process of following up previously discovered mineralization on the East Dike and we stepped up to the north of that.
There we had some surface anomalies and what we call the North Dome, another intrusive dome similar to our main deposit. We were successful in defining the shallow, silver rich mineralization, near the top. We’ve only drilled 300 feet in depth with small RC drills; we weren’t able to drill very deep. Very typical of what we saw at the top of the Dolores deposit, a high silver grade with increasing gold grades at depth.
We’re now going to put a core rig out there and extend the drilling to depth to see if we can discover any high grade gold mineralization lying beneath this silver cap. So, that’s an exciting new discovery for us and that’ll open up another part of the deposit, or district, for further development. We have about a million ounces of other mineralization on the property. Below the pit we have about 800,000 ounces of gold, 200,000 in M&I and about 600,000 in inferred.
This is high grade underground mineralization that we’ve extended for about 200 metres below the current pit bottom, or life in line pit bottom. Our goal is to continue infill drilling that, bring more of it up into the M&I category and then go with an underground operation to develop that ore. Mineralization does extend along strike from the main deposit for a kilometre in either direction.
We’re drilling on that now and in this peripheral mineralization that we just talked about, the North Dome and the East Dike, are 300 -600 metres to the east of the main open pit mine and both come to the surface and will be something we’ll look at developing in the future.

You gave guidance to market that Minefinders would have a weak first and second quarter ending June 30th. Please would you talk through the results for this period and what are your expectations of performance for the second half of the year, Mark?

We had a delay getting into the middle of our deposit, there's a central dome which is really the heart of the deposit and on the south flank of that there had been an old village. There were a few squatters who were staying in a couple of the run down adobe huts there, trying to get us to pay them extra money to leave. We had to wait for the local community and the state to evict them.
That was completed late last year and we started getting into that part of the deposit early this year. We reached a steady state of 18,000 tonnes production from the phase two of the pit in April of this year, about a year behind schedule. That’s had an impact on our grades and the material we’ve put on the leach pad. We’re getting back on schedule with the open pit and that will get us back on track by the fourth quarter of this year.
So, that’s been a big impact on us. We do expect and we guided that the first half of the year would be weak. Third quarter will still be a bit weak because we had a leak in our liner in the first phase leach pad we had to repair. That required us to take some of the material out of irrigation and that will impact recoveries until we  put it back into irrigation, which will happen, hopefully starting by the end of this month.
 We’ll be loading our phase two pad right now and that’ll have three years of production and that’ll be much quicker recovery, if we move that pad into 18,000 tonne per day production. So, we’re moving forward with the project and we expect to reach steady state production by the fourth quarter of this year.

You received a positive draft feasibility study for an additional mill at the Dolores mine, which assumed open pit ore reserves. How do your underground discoveries affect your thinking about expansion at Dolores?

Well the mill we designed and did the feasibility study on was designed for only the proven and probable reserves contained within the open pit. That, as I mentioned, has about 2.4 million ounces of gold, 126 million ounces of silver. There are additional reserves below the pit. A resource we have about 800,000 ounces of gold beneath the pit in high grade underground type operations; much different mining methods and grades than you would see in an open pit, with large trucks and shovels.
We had to design the pit, or the mill, using only the reserves we had to qualify for NI 43-101 report. Now we are looking at the underground to scale the mill to a smaller size, say 2,500 to 3,000 tonnes a day as opposed to 6,500 tonnes per day. Scaled to handle an underground operation and then supplement that with open pit high grade ore as well.
We're doing that now and will scale back to 6,500 tonnes a mill to a manageable size, say 2,500 to 3,000 tons per day. That will be scaled to an underground operation; it will still produce high grade from the pit but it will be more designed to operate for an underground production level.

You received a positive pre-feasibility report for La Bolsa gold and silver project in July and you filed an NI 43-101 report. What can you tell investors about the pre-feasibility report on La Bolsa and the way forward there?

Well, that’s a smaller deposit, it’s a grass roots discovery made up in northern Mexico, right on the US border. It's got about 344,000 ounces of measured and indicated gold and a little under five million ounces of silver. It's a very simple system; shallow dip, near surface, minimal strip. Capital costs will be less than $30 million, at $1,200 gold and $18 silver it kicks out about $120 million of free cash flow with an internal rate of return of about 95%.
So, it's a positive pre-feasibility study but it is a small deposit and so we're looking at the options on that before we go forward to a final feasibility. We are looking at some interest from the market to maybe purchase the property or joint venture it, let someone else build it.
That would save us time and management on something that won't really move the needle for the company. It will produce 40,000 to 50,000 ounces of gold over a five to six year period and then it will be done. So, we're looking at all options on moving that project forward. We’ll make a decision in the next few months.

What's happening with drilling at La Virginia property in Sonora, Mark?

We started drilling at La Virginia in April of this year, it's a large property, we spent two years consolidating. There's quite a bit of historical production, some high grade structures in a portion of the property and we wanted to consolidate the whole district before we started doing any extensive work. It took us two years to do that.
Initial drilling, we’re on hole nine or hole ten right now. We have results from three or four holes in and another three or four holes in the lab, it’s diamond core drilling. We are following up on the high grade surface mineralization that we identified and it’s the first drilling ever done in the property or in the district. There are five targets in the district, we're focused right now on the La Virginia target, which is a seven kilometre, 7000m x 2000m structural zone.
We're stumping around with the drill, some drill spaces are up to 1,000 metres between holes. We'll be putting up results of that in the next couple of weeks. It looks very good and hopefully we’re onto a new discovery in Mexico.

What is Minefinders financial situation going forward, Mark?

We're in good financial condition. We're making good money off of Dolores that meets our sustaining capital requirements for Dolores this year. We're spending a fair amount of money on improvements at the mine, expansion of the heap-leach pads, building a dam for a reservoir above our pit; so we are spending about $29 million in sustaining capital this year and that’s all coming out of mine cash flow.
We have some $20 million in the bank, we have a $50 million line of credit, we do have some debt outstanding. It's a convertible debt due in 2011, still a year and a half out and we expect that to convert in the shares. We do have to pay interest on that but it’s only 4.5%.
We’re in a strong, you know - generating strong cash flow. This year we’ll put most of our money back in the mine, next year we’ll generate very strong cash flow. We have very minimal capital expenditures next year.

What can investors expect from Minefinders over the next 12 to 18 months, Mark?

The rest of this year is just to get up to our production targets, which will be in the fourth quarter. As I mentioned, the third quarter will still be a little weak because of this tear in the liner and having to take some of the material out of irrigation.
We should have that repaired and at steady state with higher grades going to the pad, better recoveries of the higher grade. Fourth quarter should be a pretty good quarter for us and then next year we'll be going along at the same level as the fourth quarter, which should be somewhere around 25,000 to 30,000 ounces of gold produced per quarter and a million ounces of silver per quarter.
We’ll be steady state following that. That will be really what the market is waiting for us to achieve and that's what we’re excited about getting to. That’s when the company will get valued as a producer and not just as a developer.

The discovery, a new zone of mineralisation located on the east flank of the North Dome intrusive, is called the North Dome zone, and lies approximately 250 to 400 meters northeast of the northern most end of the main Dolores deposit.

Minefinders reported that drill intercepts in the North Dome deposit include wide intervals of disseminated and stockwork mineralisation, ranging from 25 to 80 meters in length, with average gold equivalent grades of 0.8 to 1.2 grams per tonne (g/t). Narrower, structurally controlled, high-grade intercepts include intervals ranging from 3 to 10g/t gold equivalent over 1.5 meters. Minefinders note the mineralisation is offset from, but along, the same north west striking structural zone. In this batch of latest results, gold grades ranged from 2.7g/t to 0.3g/t, while silver grades ranged from 152g/t to 11g/t (gold equivalent grades ranged from 5.2g/t to 0.5g/t). Within these drill intercepts, highlights include a 1.5 metre section of hole R-372, which graded 4.6g/t gold, 316g/t silver, or 9.8g/t gold equivalent, and a 1.5 metres intercept in hole R-370, which showed a grade of 2.7g/t gold and 153g/t silver, or 5.2g/t gold equivalent.

Of the findings, Mark Bailey, President and CEO of Minefinders said “The initial drill results are encouraging and demonstrate the presence of a well mineralised area extending over 600 meters of strike length. Furthermore, vertical zonation patterns are consistent with those seen in the Central Dome portion of the Dolores deposit, suggesting potential for higher-grade gold and silver mineralisation at depth”.

Going forward, Minefinders have said a core drilling campaign will be initiated during this quarter, to test the deeper potential of the North Dome target. The company note that further drilling and geologic assessment of the new target area is required to upgrade the mineralisation into reportable resource categories. Minefinders note the East Dike deposit also requires further resource analysis and economic evaluation. Together, the North Dome and the East Dike represent nearly one kilometre of mineralised strike length, which has not been included in any reserve or economic analysis to date.

Naturally when these results are eventually incorporated into a NI 43-101 compliant estimate, there is potential for significant value adding newsflow. Additional core exploration drilling in progress at the Dolores mine is also investigating mineralisation on the south end of the Dolores reserve, with the company aiming to further evaluate resource and reserve potential in terms of pit expansion to the south and underground mining at deeper levels.

The Dolores Mine is located in the Sierra Madre Occidental Range of northern Mexico, approximately 250 kilometres west of the city of Chihuahua. The mine has a well defined deposit and an open pit mine life of 15.5 years. The original economics for the Dolores mine were established in an independent feasibility study in April 2006 and, with an updated NI 43-101 technical report released in March 2008. This latest report showed the project had proven and probable reserves of 99.3 million tonnes, containing 2.44 million ounces of gold and 126.64 million ounces of silver (representing a 37% increase on the 2006 numbers). The report estimates the life of mine production is 1.8 million ounces of gold and 64.3 million ounces of silver, or 3 million ounces of gold equivalent.

The report indicated a pre-tax undiscounted net present value of US$831 million and a pre-tax internal rate of return of 26% using the base case prices. It is worth noting that this considers base case prices of $675 per ounce of gold and $13.00 per ounce of silver, with today’s $1,200/oz gold price likely allowing a shorter payback and higher rate of return. Sustaining capital costs are estimated at $50 million. Total average cash operating costs per ounce of gold and ounce of gold equivalent silver, based on a ratio of silver to gold of 52:1, are estimated at $297 for the life of the mine.  Initial capital and pre-commercial production operating costs are estimated at $192 million, including a $10 million contingency.

In way of background, Minefinders is a Mexico-focused Canadian based gold and silver exploration and mining company, with a market capitalisation of approximately C$602 million. In addition to the Delores project, the company currently has four exploration projects underway, all located in Mexico; La Bolsa, La Virginia, Planchas De Plata and Real Viejo. The company cites a tradition of corporate commitment to its shareholders, exemplified by what it believes is strong fiscal management, minimal shareholder dilution, and responsible disclosure. In its mining operations, it is dedicated to safety, social responsibility, and environmental stewardship.

The new zone, on the eastern flank of the North Dome intrusive, returned several promising drill results, with both higher grade, narrow intercepts and wider disseminated and stockwork mineralization reported.

 “The initial drill results are encouraging and demonstrate the presence of a well mineralized area extending over 600 meters of strike length” said Mark Bailey, President and CEO.

Bailey further noted that the characteristics of the new zone were similar to the Central Dome zone of the Dolores deposit, implying good potential for high grade gold and silver mineralization at depth.

The mineralization in the new zone is offset from but along the same northwest-striking structural zone that controls mineralization of the East Dike deposit to the southeast, Minefinders added.

Not surprisingly, Minefinders intends to follow up the discovery with additional drilling and geological exploration to upgrade the new zone to a reportable resource.

The combined strike length of North Dome and East Dike is now almost 1 kilometer long.

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.

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.

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 accordingly the company expressed their pleasure at the results, indicating 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.

Minefinders has market capitalization of C$600 million (US$575 million), with around US$26.8 million available in cash and cash equivalents, and around US$59.9 million in working capital. In addition to the La Bolsa exploration project, the company currently has three other exploration projects underway (La Virginia, Planchas De Plata and Real Viejo) as well as a flagship, in production mining project (Dolores), all located in Mexico.

As mentioned, La Bolsa is a gold and silver project located Sonora, Mexico, around 27 kilometres northwest of the city of Nogales, near the Sonora/Arizona border. The shallow dip of the majority of mineralization in close proximity to the surface and favourable metallurgical characteristics at the project, suggests a mine plan that will incorporate low cost open pit mining in combination with simple heap leach recovery of gold and silver. This was the assumed extraction methodology in the pre-feasibility study.

A previously conducted NI 43-101 compliant resource estimate, updated earlier this year to take account of additional infill drilling, assuming a cut of point at 0.25 grams per tonne (g/t) of gold, showed La Bolsa having 9.7 million tonnes of measured resource, grading 0.751g/t gold and 10.8g/t silver. This comes to a measured resource of 234,464 ounces of gold and 3.38 million ounces of silver. In addition, the report also showed indicated resources of 9 million tonnes, grading 0.596g/t of gold and 8.6g/t silver, for an indicated resource of 172,866 and 2.48 million ounces of gold and silver respectively.

Last month, proven and probable reserves were estimated for the project, in accordance with definitions adopted by the Canadian Institute of Mining, Metallurgy and Petroleum. These showed the project had proven resources of 9.46 million tonnes, grading 0.667g/t gold and 10.1g/t silver, and probable resources of 6.17 million tonnes, grading 0.57g/t gold and 7.2g/t silver. Combined, these give total contained gold of 316,135 ounces (203,045 proven, 113,090 probable) and total contained silver of approximately 4.5 million ounces (3.08 million proven, 1.42 million probable).

The pre-feasibility study released today contemplates conventional open pit mining methods at La Bolsa with low cost heap leach processing extraction method. This involves crushing ore into small pieces and irrigating with a solution that dissolves the precious metals, which are then collected and reformed.

Throughput is projected at 8,500 tonnes of ore per day with two-stage crushing and gold and silver recovery achieved through a carbon absorption recovery system (a method of collection the precious metal solution mentioned previously).

The mineable reserve, using prices of $825 per ounce of gold and $14 per ounce of silver contains 316,135 ounces of gold and 4.5 million ounces of silver. The study assumes average recoveries of 72% for gold and 7% for silver, giving the total production from La Bolsa at an estimated 227,600 ounces of gold and 315,100 ounces of silver, expected over a six year mine life. The life of mine reserve strip ratio is estimated at 1.9 to 1 waste to ore and the operating strip ratio is estimated at 1.5 to 1 waste to ore, net of capitalized pre-stripping.

Mark Bailey, President and CEO of Minefinders said of the study “The La Bolsa project has several favourable characteristics, including a low waste to ore ratio, amenability to heap leach processing, and close proximity to infrastructure”, also noting “We consider the results of the pre-feasibility study a positive step toward advancing the La Bolsa gold deposit to a production decision. Over the next several months we will consider our options to realize value from La Bolsa”.

The pre-feasibility study compared two economic scenarios, one a base case, using conservative price assumptions for gold and silver, and one so called spot case, using an approximation of the current spot price for the two metals. Both cases assumed the initial capital cost was US$31.4 million, which includes US$7.0 million of initial working capital, with life of mine sustaining capital costs of US$12.5 million. This considers the assumption that over the life of the mine, it will produce 227,600 ounces of gold and 315,100 ounces of silver.

The base case, which assumed prices of $825 per ounce of gold and $14 per ounce of silver, showed gross revenues over the mines life at US$197.9 million, with total cash cost of US$516 per gold equivalent  ounce. With these assumptions, the pre-tax net present value (NPV) of the project is estimated at US$42.3 million (or assuming 5% discount; US$28.2 million). This translates to a pre-tax internal rate of return (IRR) of 34%.

The more optimistic scenario considering current spot price values (assumed gold price at $1,200/oz and silver at $18/ox) improves on these numbers significantly. Estimated gross revenue jumps to US$278.8 million, with cash costs falling slightly to US$510/oz. The net present value almost triples to US$123.2 million (or assuming 5% discount comes to US$91.3 million), and accordingly the internal rate of return sky rockets to 95%. Both the base case and the spot case, therefore, show the project is likely to add significant value to the company. Given the majority of analysts are still optimistic that gold and silver prices will remain relatively high, possibly even appreciating further over the next year or so, one would not be unjustified in considering the actual value of the project, if it were to go ahead, may even fall higher than the above projection.

Given these consider the project of the mine life over six years however (in which time prices are most likely to have seen troughs as well as peaks), one could consider the true NPV of the project to fall somewhere in between these study models.

This latest study builds on an already firm outlook for the company, which moved into profitability last year in thanks to production form its flagship Dolores mine. The company is expecting to continue its ramp up of production at that mine, and benefiting from the economies of scale in the costs brought about by this increase (cash costs expected to fall from $550 to around $450 per gold equivalent ounce), revenues and profits increasing steadily during the year.

Looking at La Bolsa, one can certainly see the potential for this to become another significant in-production asset on Minefinders’ books. This pre-feasibility study gives some indication of exactly what that may translate to, and certainly gives investors food for thought as Minefinders move along the road to production at La Bolsa.

A number of promising exploration targets were previously identified on the 27,000 hectare Dolores mine concessions. Minefinders has refocused on exploration and testing of mineralized deposits adjacent to the main deposit. An 18,000 metre drilling program is presently underway with the goal of expanding resources and reserves.

In addition, Minefinders is investigating options to commence exploration of the underground mineralization below the current open pit. With the limited work to date, there appear to be significant opportunities to potentially increase current reserves at Dolores, it said.

The mill addition in the study does not take into account the significant high-grade gold and silver mineralization already identified and reported that lies below and up to one kilometre peripheral to the pit. "Taking these drill results into consideration, it is expected that the addition of a mill at Dolores would unlock this upside by providing the infrastructure necessary to process high-grade material from potential future underground operations in addition to the higher-grade ore in the existing open pit resource," Minefinders added.