November 9, 2009 / 3:40 PM / 9 years ago

UPDATE 2-Minefinders Q3 loss narrows, cuts '09 production view

* Sees to sell 1.4 mln ounces of silver in ‘09

* Sees ‘09 gold sales at 80,000 ounces

* Sees higher output, lower costs at Dolores from Q2, 2010

* Shares fall as much as 3 pct (Adds details, analyst comments, updates share movement)

Nov 9 (Reuters) - Canada’s Minefinders Corporation Ltd MFL.TO posted a narrower third-quarter loss, reflecting the transition to commercial production from pre-commercial production at its gold and silver Dolores mine in Mexico, but cut its production outlook for the full year.

Minefinders now expects to sell about 1.4 million ounces of silver and 80,000 ounces of gold in 2009. Previously it expected to sell 1.8 million to 1.9 million ounces of silver, and 85,000 ounces to 95,000 ounces of gold.

The company said it is expecting to sell gold at cash operating costs of $520 to $530 per gold-equivalent ounce, assuming a 71 to one silver to gold ratio.

“It is what I would call somewhat disappointing, but the outlook is not terribly negative,” Canaccord Adams analyst Wendell Zerb said in a note to clients.

“I think what’s more important is that this company continues to show improvement in its operations,” said Zerb adding that Minefinders’ operations are still at a level where it will have “teething issues.”

The precious metals mining and exploration company said it lowered its outlook due to the negative effect of the lower-than-expected crusher throughput in July and August, and lower gold and silver grades realized during the period.

However, the company said, its recent access to the higher-grade central dome of the deposit at Dolores is expected to result in higher production and lower cash costs from the second quarter of 2010.


For the third quarter, Minefinders said ore crushed and stacked totaled 14,000 tons per day, down from 15,000 tons per day a year earlier.

Production and cash operating costs, particularly in the third quarter, were hurt by lower-than-planned crusher throughput and mining activities restricted to the relatively lower grade north end of the deposit, the company said.

The company produced 18,799 ounces of gold, and 318,878 ounces of silver in the third quarter, down from 23,336 ounces of gold and 419,946 ounces of silver last year.

In the latest third quarter, Minefinders sold at a cash operating cost of $587 per gold equivalent ounce.

Minefinders posted a loss of $700,000, or 1 cent per share, compared with a loss of $6.8 million, or 14 cents a share, a year earlier.

Minefinders posted revenue of C$24.1 million.

Analysts on average had expected the company to earn 1 cent per share, on revenue of $29.8 million, according to Thomson Reuters I/B/E/S.

Shares of the company were down 2 percent at C$11.29 in midday trade on the Toronto Stock Exchange. (Reporting by Isheeta Sanghi in Bangalore; Editing by Gopakumar Warrier)

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