The report shows that proven and probable reserves at the mine increased 37% from a February 2006 feasibility study to 99.3 million mt containing 2.44 million oz of gold and 126.64 million oz of silver—increases of 24.8% and 22.1%, respectively. Life of mine production increased to 1.8 million oz of gold and 64.3 million oz of silver or 3 million oz of gold and goldequivalent silver at base case prices. Life of mine average cash operating costs are now estimated at $297 per gold equivalent ounce and $32 per gold ounce, net of silver by-product credits. Initial capital costs are now pegged at $192 million including a $10-million contingency, of which $141 million had been spent by the end of 2007. Sustaining capital costs are estimated at $50 million with net cash flow from operations of $1.1 billion over the life of the mine. Base case metal price assumptions of $675/oz gold and $13/oz silver were used in the economic analysis, with $600 gold and $10 silver used to define the reserve.

The company said the new Dolores mine economics are based on a study incorporating current costs and an updated production schedule for an open-pit operation lasting more than 15 years. Estimated costs have risen from those in the 2006 feasibility study; operating cost increases having the most significant impact to the mine economics include higher local wage rates, diesel, reagent, and explosives costs. Additional significant cost increases above those in the 2006 feasibility study include costs for equipment maintenance and parts, community relations, security and camp operations.

Capital cost estimates have been updated to reflect the increase in ore tons processed over the mine life, which require additional leach pad space, haul trucks and other equipment, and the cost to complete construction. Increased costs associated with immediate and ongoing improvements in the housing, medical and school infrastructure for the new community of Dolores are also included in the revised estimates.

Minefinders said it will conduct a feasibility study in 2008 to assess the economic viability of adding a flotation mill, which would enhance recoveries from high-grade ore in the open-pit, process additional underground ore and increase annual production capacity. Previous flotation mill test work showed recoveries from sulphide ores of 90%– 92% for gold and 90% for silver.

The open-pit mine plan and updated Dolores mine economics do not take into account significant high-grade gold and silver mineralization that lies below and up to 1 km peripheral to the proposed pit or increased gold and silver production that would result from processing high grade open pit ore through a mill. The completion of the mill feasibility study and evaluation of underground development are examples of the optimization efforts that will continue beyond the start of production from the Dolores open-pit mine.

According to the company, construction at Dolores is substantially complete. Local residents have begun relocating to the new village and the village medical facilities were to be turned over to government authorities early in 2008.

Initial commissioning of the primary crusher was expected by the end of February. Commissioning of the tertiary crushers is expected in March with initial loading of the leach pad now expected in late March or early April.

“Perhaps the most important finding of the new study, given the global environment of cost escalation, is that the economics for the Dolores mine remain robust,” said Mark Bailey, Minefinders president and CEO. “Looking ahead, there is significant upside potential from optimization efforts currently under way, with results expected later this year.”