The prefeasibility study considers the addition of a 6,500-mt/d mill to the existing 18,000-mt/d heap leach operation, with anticipated production from the mill beginning in the second quarter 2012. Total combined mill and heap leach production from the current open-pit mine would be 1.7 million oz of gold and 74.2 million oz of silver over an 11-year mine life. Life-of-mine average cash operating costs, excluding royalties, are estimated at $348 per gold equivalent oz. Initial capital costs, including a $23.5-million contingency and accuracy provision, are estimated at $163.3 million, with total life-of-mine sustaining capital costs for both the mill and heap leach operation estimated at $42.5 million. Base case metal price assumptions are $825/oz for gold and $14/oz for silver.

The mill addition study does not consider significant high-grade gold and silver mineralization already identified below and up to 1 km peripheral to the pit. Taking these drill results into consideration, the company anticipates the addition of a mill at Dolores would unlock upside potential by providing the infrastructure necessary to process not only the higher-grade ore in the existing open-pit resource but also high-grade material from potential future underground operations.

“Minefinders is in the enviable position of having a profitable heap leach operation at Dolores that allows us to be thorough in investigating and considering a number of mill options. These include scenarios with lower initial capital costs that both capture the high-grade ore in the open pit and provide the infrastructure necessary to develop a new underground mine in the future if it is prudent to do so,” Minefinders President and CEO Mark Bailey said.

The Dolores mill addition study was prepared for Minefinders by GRD Minproc.