www.minefinders.com
Minefinders is a precious metals mining and exploration company. The Company's flagship Dolores Mine in Mexico 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. There is potential to increase production from operations by increasing high-grade recoveries with the addition of a mill and by expanding the mine into areas of additional mineralization.
Minefinders turns cash flow positive as Dolores Gold-Silver Mine production feeds through to bottom line
Emerging gold producer Minefinders Corporation (TSX:MFL, NYSE Amex: MFN) confirmed this morning that it the final quarter of 2009 it turned cash flow positive as its Dolores Gold-Silver mine continued to ramp up towards full production.
Minefinders officially commenced commercial production at Dolores in May 2009, and has since been working on moving the operation up to full utilization. As expected, cash costs in 2009 were well above the life of mine projections for the project, nonetheless, the company benefited from the robust gold and silver prices, recording fourth quarter revenues of $27.8 million and net income of $4.3 million, or 7 cents per share. The company also turned cash flow positive, reporting $4.2 million in positive operating cash flow. During the final quarter of 2009, Minefinders sold 25,131 gold equivalent ounces.
"In the fourth quarter of 2009 we became a profitable producer," said Mark Bailey, President and CEO of Minefinders. "From quarter to quarter in 2010, we expect that production at Dolores will trend upward while cash costs per ounce will trend downward. We also intend to position Minefinders for long-term success through exploration activity at Dolores and two of our other properties, while considering potential strategic value-added acquisitions."
For the 12 month period ended December 31, 2009 (FY 2009), the Mexico focused producer chalked up revenues of $75.2 million, a small loss of $4.3 million (7 cents per share) and positive operating cash flow of $10 million. Total gold equivalent ounces sold in 2009 were 94,676 which generated proceeds of $94 million.
Other milestones for the company in 2009 included the retirement of $60 million of short and long term debt and the commencement of a pre-feasibility study for the addition of a mill at Dolores and the development of a mine at La Bolsa. At La Bolsa, Minefinders has defined a measured and indicated resource of 360,000 ounces of gold and 4.8 million ounces of silver.
At the end of 2009, Minefinders had $30.4 million in cash and cash equivalents and net working capital of $53.0 million.
Looking ahead to 2010, the company expected to produce between 91,000 and 100,500 ounces of gold and between 2.3 and 2.6 million ounces of silver. Minefinders expects to stack approximately 6.4 million tonnes of ore containing 146,000 ounces of gold and 9 million ounces of silver. The stacked gold grade is expected to average 0.71 grams per tonne in 2010, up from 0.70 grams per tonne in 2009, while stacked silver grade is expected to average 44.2 grams per tonne, up from 20.58 grams per tonne in 2009.
Cash operating costs are forecast to fall from $550 per ounce in 2009 to $430-$470 in 2010.
"Minefinders enters 2010 in a strong financial position with a robust organic growth profile," said Mr. Bailey. "We anticipate that the Dolores mill and La Bolsa mine pre-feasibility studies will be completed in the first quarter of 2010. We expect to benefit from economies of scale at Dolores due to increased production and we believe Minefinders will benefit from favourable precious metal pricing if current trends continue."
The Dolores Mineis 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.
