Minefinders Receives Optimized Bankable Feasibility Study and Approves Mine Construction on the Dolores Project.VANCOUVER, British Columbia British Columbia, province (2001 pop. 3,907,738), 366,255 sq mi (948,600 sq km), including 6,976 sq mi (18,068 sq km) of water surface, W Canada. Geography -- Minefinders Corporation Ltd. (the "Company") (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :MFL MFL Minimum Flows and Levels (ground water) MFL Modern Foreign Language MFL Magnetic Flux Leakage MFL Medium Flood (stage lighting) MFL Manitoba Federation of Labour )(AMEX AMEX See: American Stock Exchange :MFN MFN abbr. most-favored nation ) has received a bankable-level feasibility study The analysis of a problem to determine if it can be solved effectively. The operational (will it work?), economical (costs and benefits) and technical (can it be built?) aspects are part of the study. Results of the study determine whether the solution should be implemented. from Kappes, Cassiday and Associates ("KCA KCA Kenya Cricket Association KCA Kentucky Counseling Association KCA Kids' Choice Awards (Nickelodeon) KCA Kidney Cancer Association (since 1990; Evanston, Illinois) KCA Kentucky Coal Association ") on its 100% owned Dolores Dolores (or Delores) was a common given name (until the 1960s in the USA); it is cognate with the English word "dolorous" (meaning sorrowful) and equivalent in meaning. gold and silver deposit in Chihuahua, Mexico. On the basis of this study, the Company's Board of Directors has now directed management to proceed with the development and construction of an 18,000 tonnes per day open-pit, heap leach leach v. leached, leach·ing, leach·es v.tr. 1. To remove soluble or other constituents from by the action of a percolating liquid. 2. mine at Dolores. E[acute accent acute accent n. A mark (´) indicating: a. that a vowel is close or tense, as é in French été. b. that a vowel or syllable has a high or rising pitch, as in Chinese or Ancient Greek. c. ]Company President, Mark Bailey
Mark Bailey (born 26 November, 1970) is a cricket player in Hamilton, New Zealand. He played one one-day international for the New Zealand cricket team. , commented: "The new KCA study is the culmination of several years of intensive geological and engineering work. In the process of re-working and advancing earlier mine plans, our internal and consulting engineers have significantly improved the economics of the project. The Dolores gold and silver deposit has always been commercially attractive; however, we believe that the plan upon which we will now break ground best reflects its true potential. We look forward to putting the open-pit portion of the Dolores deposit into production by mid-2007, and to continuing our successful expansion of gold and silver resources on the property." E[acute accent]Summary of Project Economics (in U.S. dollars) E[acute accent]The estimated economics of the approved 18,000 tonnes per day ("tpd") mine plan are summarized as follows: E[acute accent]- total direct capital costs of approximately $98.5 million, with additional indirect capital costs of $33.2 million, for total capital costs of $131.6 million; E[acute accent]- sustaining capital costs over the life of mine of an additional $29 million (all capital costs estimates are +/-15%); E[acute accent]- cash operating costs operating costs npl → gastos mpl operacionales of $224.25 per ounce of gold and gold-equivalent silver ("AuEq" - based upon a 63:1, gold:silver ratio), or $86 per ounce gold, net of silver credits (using $7.50 per ounce silver), and total cash costs (inclusive of inclusive of prep. Taking into consideration or account; including. all concession and royalty payments) of $237.70/oz AuEq; E[acute accent]- after-tax cash flow having an estimated undiscounted net present value ("NPV NPV See: Net present value ") of $276.8 million and an internal rate of return ("IRR IRR In currencies, this is the abbreviation for the Iranian Rial. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. ") of 24.3%; and E[acute accent]- payback Payback The length of time it takes to recover the initial cost of a project, without regard to the time value of money. of capital costs in 3.3 years. E[acute accent]The optimization work to date that is reflected in the new study (the "KCA Study"), has had a positive impact on the project economics, despite increases in the current costs of many of its components, including fuel, reagents, steel and equipment. The profitability of the project is expected to be further enhanced as additional optimization and detailed engineering proceeds during the construction period. E[acute accent]A new resource model and mine schedule will be completed this Spring to include the results of exploration and infill in·fill n. 1. The use of vacant land and property within a built-up area for further construction or development, especially as part of a neighborhood preservation or limited growth program. 2. drilling completed through the end of 2005. This drilling is expected to increase the project reserves and further enhance its overall economics. E[acute accent]The mine plan and analysis of project economics does not include significant, high-grade gold mineralization Mineralization The process by which the body uses minerals to build bone structure. Mentioned in: Rickets mineralization, n the bioprecipitation of an inorganic substance. that lies below the approved pit model. Ongoing drilling will target the further definition and expansion of this mineralization, with a view to the development of plan for an underground mine component. E[acute accent]Summary of Capital and Operating Costs E[acute accent]Capital and operating costs assume the purchase of new equipment and use current pricing for all components. As against the project studies announced in July 2005, power costs have increased by approximately $0.23 per tonne and reagent reagent /re·a·gent/ (re-a´jent) a substance used to produce a chemical reaction so as to detect, measure, produce, etc., other substances. re·a·gent n. costs have increased by $0.21 per tonne. Mining costs have increased in the new study by $0.20 per tonne, as a result of higher fuel costs. As noted, capital costs are expected to improve with the completion of detailed engineering and contracting. Table 1 Direct and Indirect Capital Costs -------------------------------------------------------------- Mine Development $ 3,720,465 -------------------------------------------------------------- Mine Equipment $ 31,635,527 -------------------------------------------------------------- Plant and Facilities $ 59,121,200 -------------------------------------------------------------- Camp and Townsite $ 4,016,600 -------------------------------------------------------------- Spare Parts $ 2,385,800 -------------------------------------------------------------- Shipping and Import $ 2,201,500 -------------------------------------------------------------- Contingencies $ 10,370,400 -------------------------------------------------------------- Engineering Procurement and Contract Management $ 5,547,600 -------------------------------------------------------------- Indirect and Owner's Costs $ 4,829,300 -------------------------------------------------------------- Initial Fills $ 1,516,600 -------------------------------------------------------------- Working Capital $ 6,334,000 -------------------------------------------------------------- Total Capital $131,680,000 -------------------------------------------------------------- E[acute accent]The anticipated $29 million of sustaining capital is spread over years three through ten of the project's mine life. Table 2 Operating Cost Summary - Life of Mine -------------------------------------------- Area Cost per Tonne -------------------------------------------- All Labor (excluding mine) $ 0.15 -------------------------------------------- Mining (includes labor) $ 3.53 -------------------------------------------- Process $ 2.55 -------------------------------------------- Support $ 0.10 -------------------------------------------- General and Administrative $ 0.53 -------------------------------------------- Total $ 6.87 -------------------------------------------- E[acute accent]Reclamation Reclamation A claim for the right to return or the right to demand the return of a security that has been previously accepted as a result of bad delivery or other irregularities in the delivery and settlement process. and closure costs are estimated to be $9.5 million, or about $0.13 per tonne of crushed ore. These costs are not included in the operating cost estimation, but are included in the cash flow calculation. E[acute accent]Summary of Project Production E[acute accent]The 18,000 tpd mine plan estimates production of 72.5 million tonnes of proven and probable ore reserves at an average grade of 0.84 g/t gold and 44.5 g/t silver, with a strip ratio of 3.7:1, and a cut-off cut-off Anesthesiology The point at which elongation of the carbon chain of the 1-alkanol family of anesthetics results in a precipitous drop in the anesthetic potential of these agents–eg, at > 12 carbons in length, there is little anesthetic activity, grade of approximately 0.3 grams of gold per tonne ("g/t"). The mine would place approximately 1.95 million ounces of gold and 103.6 million ounces of silver on the heap leach pad and recover 1.445 million ounces of gold and 53.2 million ounces of silver (2.29 million ounces AuEq(i)) over a 12 year mine life.
Table 3 Proven and Probable Reserves
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Tonnes Gold Silver Gold Silver Gold Eq(i)
Category (000s) g/t g/t oz oz Oz
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Proven 43,678 0.88 45.44 1,235,738 63,809,015 2,248,580
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Probable 28,795 0.78 42.96 722,092 39,770,617 1,353,372
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Proven &
Probable 72,473 0.839 44.46 1,957,830 103,579,632 3,601,952
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Some numbers may not match due to rounding.
(i) Gold Eq based on 63:1 ratio Ag:Au
E[acute accent]The total audited measured and indicated resources at Dolores (which include the mineral reserves), based on the resource block model completed in October 2004, are 2.65 million ounces of gold and 128.2 million ounces of silver, contained in 101 million tonnes grading 0.84 g/t gold and 40.8 g/t silver, at a cutoff grade of 0.3g/t AuEq(i) (see Table 4, below). An additional 696,000 ounces of gold and 25.3 million ounces of silver, contained in 28.1 million tonnes, are classified as "inferred resources" (see news release dated December 6, 2004 and SEDAR SEDAR System for Electronic Document Analysis and Retrieval SEDAR Southeast Data, Assessment, and Review filings for NI 43-101 technical reports).
Table 4 Measured and Indicated Resources
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Tonnes Gold Silver GoldEq Gold Silver Gold Eq(i)
Category (000s) g/t g/t g/t oz oz oz
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Measured 53,413 0.89 43.7 1.58 1,485,000 72,599,000 2,637,365
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Indicated 47,652 0.78 37.5 1.38 1,161,000 55,580,000 2,043,222
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Total 101,065 0.84 40.8 1.48 2,647,000 128,179,000 4,680,587
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Some numbers may not match due to rounding.
(i) Gold Eq based on 63:1 ratio Ag:Au
E[acute accent]As noted, the Company is currently updating the Dolores resource and block models to include new drilling data completed since October 2004. New reserves and resources estimates will be released shortly. E[acute accent]Drilling is ongoing at Dolores to convert resources that are currently outside the proposed mine plan into additional surface and/or underground mineable reserves and to condemn To adjudge or find guilty of a crime and sentence. To declare a building or ship unsafe for use or occupancy. To decide that a navigable vessel is a prize or is unfit for service. areas outlined for the plant and pad facilities. Results from this program will be reported when they are available. E[acute accent]Summary of Metallurgy metallurgy (mĕt`əlûr'jē), science and technology of metals and their alloys. Modern metallurgical research is concerned with the preparation of radioactive metals, with obtaining metals economically from low-grade ores, with E[acute accent]The KCA Study projects a weighted average recovery from the leach pad of 74% for gold and 51% for silver, with consumption of 0.4 kg/tonne of cyanide cyanide (sī`ənīd'), chemical compound containing the cyano group, -CN. Cyanides are salts or esters of hydrogen cyanide (hydrocyanic acid, HCN) formed by replacing the hydrogen with a metal (e.g., sodium or potassium) or a radical (e.g. and 1.7 kg/tonne of lime. Recoveries and reagent consumptions are based on an extensive review by KCA of test results from previous work documented by M3 Engineering & Technology Corporation in its bankable bank·a·ble adj. 1. Acceptable to or at a bank: bankable funds. 2. Guaranteed to bring profit: a bankable movie star. feasibility study published by the Company in July 2005, and on the partial results of ongoing column tests. E[acute accent]Summary of Sensitivity Analysis E[acute accent]The 18,000 tpd mine plan reserves were calculated using prices of $375/oz gold and $5.75/oz silver and the economic analyses were calculated using prices of $475/oz gold and $7.50/oz silver. The project is highly leveraged to gold and silver prices and to capital and operating costs. E[acute accent]An analysis of pre-tax sensitivities for gold revenue from the mine operation, at plus or minus 20% of the gold prices or gold recovery rates used in the study's base economics, shows variation in the project's IRR from a high of 37.6% (an NPV of US$ 520 million, undiscounted) to a low of 19.6% (an NPV of US$ 255 million, undiscounted). Changes in silver revenues, operating costs and capital costs, over a plus or minus 20% range, show similar sensitivities (see Table 5, below).
Table 5 Project Sensitivities
IRR Sensitivity - Pre-Tax, with Contingencies
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IRR (Pre-Tax)
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Percent of Silver Recovery, Gold Recovery, Operating Capital
Base Case Price Price Cost Cost
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80% 23.8% 19.6% 35.8% 36.8%
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90% 26.3% 24.2% 32.3% 32.4%
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100% 28.7% 28.7% 28.7% 28.7%
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110% 31.1% 33.2% 25.1% 25.7%
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120% 33.4% 37.6% 21.5% 23.1%
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NPV Sensitivity - Undiscounted, Pre-Tax, with Contingencies
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NPV US$000s (Pre-Tax)
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Percent of Silver Recovery, Gold Recovery, Operating Capital
Base Case Price Price Cost Cost
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80% 310,065 255,183 491,888 416,479
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90% 348,872 321,431 439,783 402,079
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100% 387,679 387,679 387,679 387,679
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110% 426,486 453,927 335,575 373,279
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120% 465,293 520,175 283,471 358,879
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E[acute accent]Moving Forward at Dolores E[acute accent]The Company has now contracted the following detailed engineering design work: Golder Associates Inc. - leach pad and geotechnical requirements; Terra Nova Terra Nova may refer to: In geography:
E[acute accent]Construction of the new Dolores mine road is well-advanced and is targeted for completion in early April. Equipment procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases. , mine financing, and final permits are in process and are expected to be in place, as required, for start of project construction in April. Hiring of staff for the construction and mine operations is underway. E[acute accent]Condemnation drilling has encountered mineralization in the pad area and further drilling is being undertaken to determine the extent of this new zone of mineralization. Exploration drilling will carry on throughout 2006 to advance peripheral, near-surface mineralization and underground mineralization to feasibility. E[acute accent]Quality Control and Assurance E[acute accent]Michael Cassiday, AusIMM Member, of KCA, is the "qualified person" responsible for the contents of the KCA Study.Mark Bailey MSc., P.Geo. is the "qualified person" with overall resp.onsibility for the Dolores Project The Dolores Project, located in the Dolores and San Juan River basins in southwestern Colorado, uses water from the Dolores River for irrigation, municipal and industrial use, recreation, fish and wildlife, and production of hydroelectric power. and is responsible for the contents of this news release. As used herein, a "bankable feasibility study" is a comprehensive analysis of a project's economics (+/-15% precision) and is used by the banking industry for financing purposes. A technical report summarizing the KCA Study will be filed within 30 days, in accordance with the requirements of NI 43-101, and will then be available for inspection online at www.sedar.com. E[acute accent]The Company will present the Dolores project and other exploration results to the BMO Nesbitt Burns  This article or section is written like an .Please help [ rewrite this article] from a neutral point of view. Mark blatant advertising for , using . 2006 Global Resources Conference on Tuesday February 28th, at 3 PM (EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT ). Participants may access the conference's audiovisual webcast of the Company's presentation through the following link: http://corporate.bmo BMO Bank of Montreal (Canada) BMO Before Market Open BMO Biometrics Management Office BMO Ballistic Missile Office BMO British Mathematical Olympiad BMO Balkan Mathematical Olympiad BMO Business Management Office .com/conferences/2006resources/. E[acute accent]Mark H. Bailey, President and Chief Executive Officer E[acute accent]Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement under the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. Private Securities Litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. Act of 1995: Statements in this release that are forward-looking, including statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the size, and potential growth in size, of the Company's mineral reserves and resources, the economic feasibility of, and commencement of mine construction and mining operations at, the Company's Dolores Project and the timing of the further exploration and development of the Company's mineral projects, are subject to various risks and uncertainties concerning the specific factors identified above and in the Company's periodic filings with the Ontario Securities Commission The Ontario Securities Commission (OSC) is a regulatory agency which administers and enforces securities legislation in the Canadian province of Ontario. The OSC is an Ontario Crown corporation which reports to the Ontario legislature through the Minister of Finance. and the U. S. Securities Exchange Commission ("SEC"). Such information contained herein represents management's best judgment as of the date hereof based on information currently available. The Company does not intend to update this information and disclaims any legal liability to the contrary. E[acute accent]Cautionary Note to U.S. Investors: The SEC permits mining companies to disclose only those mineral deposits that can be extracted or produced economically in their filings with the SEC. This news release uses the term "inferred resources" that the SEC guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. prohibit from inclusion in filings with the SEC. E[acute accent]Minefinders Corporation Ltd. (TSX:MFL) (AMEX:MFN) |
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