MINEFINDERS CORPORATION (TORONTO:MFL)
Home page: www.minefinders.com
AMEX:MFN
A HIGHLY SUCCESSFUL PRECIOUS METALS EXPLORATION COMPANY
Business Summary
Minefinders is a highly successful precious metals exploration company with advanced projects in Mexico and the United States. The company currently controls over 3 million ounces of gold resource and 165 million ounces of silver resource, and is actively seeking new discoveries.
Current Resources & Expansion Potential
Minefinders Corporation, Ltd. has been involved in full-scale minerals exploration since early 1995. The ongoing exploration of their properties in the US and Mexico has the potential to contribute new multi-million ounce deposits to the resource base.
The Discovery of Dolores
Minefinders' Dolores deposit has become one of the largest undeveloped gold-silver resources in the world. Infill drilling, silver renalysis, resource calculations, and economic modeling of the deposit conducted over the period from 2000-2002 continued to increase the size, grade, and overall positive economics of the property.
Management is confident that the deposit can be profitably mined at $275 per ounce for gold and
$4.50 per ounce of silver, and that additional exploration work is likely to double the deposit estimates and thus improve project economics.
The Discovery of La Bolsa
Their La Bolsa Resource, currently estimated to contain over 208,000 ounces of gold and 2 million ounces of silver, has excellent expansion potential. In the immediate resource area, surface mineralization extending over three times the area defining the existing resource has been delineated through grid sampling. Further drilling will focus on expanding the resource toward this additional surface mineralization.
The Sonora Properties
Minefinders controls 388 kmē of concessions southeast of La Bolsa. At least 11 separate areas of
outcropping gold and silver mineralization and numerous historic mine workings have been found.
Advanced prospects include Real Viejo and La Dura, which are high-grade silver vein systems, and El Malacate, where a very large gold system has been located.
La Recompensa, Tio Flaco, and Alcaparosso (on the La Reserva portion of the Sonora Properties) are porphyry-related copper-gold prospects under discussion with prospective joint venture partners.
The San Antonio Project
High-grade gold up to 4.22 g per ton, and silver up to 675.4 g per ton surface mineralization at San Antonio has been shown to outcrop over 25 hectares of grid sampling. This sampling defines a low-angle gold-silver zone. The property is located in the historic silver mining state of Zacatecas in Mexico and is in the drill-permitting stages.
The Nevada Properties
Minefinders controls three properties in northern Nevada, all within prolific gold trends. Geologic
mapping, geophysics, surface sampling, and initial drilling have been completed, and drill targets have been delineated. Each of these properties has the potential to host a large gold deposit.
The Oro Blanco Project
Minefinders controls a large portion of the historic Oro Blanco gold-silver district in Southern Arizona, adjacent to the La Bolsa Concessions. Preliminary drilling on these claims produced encouraging results, including a small resource.
Recent News: Minefinders Completes CDN$18,112,500 Financing
Minefinders Corporation Ltd.'s Mark H. Bailey, President and CEO, is pleased to report the
completion of the previously announced bought deal equity financing at CDN$ 7.00 a share. The
offering was oversubscribed and realized gross proceeds of CDN$18,112,500.
The offering comprised a total of 2,587,500 shares of the company, which included the exercise in full of underwriters' standby and over-allotment options. The offering was placed by an underwriting syndicate led by BMO Nesbitt Burns, in consideration of which a cash commission equal to 5.5% of the gross proceeds of the financing has been paid.
The net proceeds from the offering will fund the continued exploration and development of the company's Dolores gold and silver property, located in northern Chihuahua State, Mexico and the company's Northern Sonora properties, located in northern Sonora State, Mexico, and general working capital.
Fundamental Considerations
There are several factors which should make Minefinders' stock price increase.
o The recent volatility of both 'old economy' and 'new economy' stocks has investors looking to
broaden their portfolios. This is refocusing interest in mining and mining stocks. As the sector
gains traction, Minefinders will move as well.
o Of the hundreds of mining company stocks, Minefinders is particularly well situated, with
very high-quality resource ounces. The Dolores project, in particular, is a late-stage
exploration project, which could become a mine very quickly. As large companies mine out the
best parts of their existing resources, they need to replace the ounces, making the acquisition
of advanced properties such as Dolores extremely attractive.
o A joint venture between Minefinders and one of the several companies looking at Dolores
should give MFL a large influx of cash, as well as a partner with the capital to bring the project
to production. Cash flow from production will allow Minefinders to fund exploration for new
large gold deposits and continue to increase shareholder value.
o Minefinders has several excellent exploration properties. A major find at any one of
these could double or triple the value of the company.
Technical Considerations
The trend of the gold price is up. The resent consolidation of the upwards spike in January has run its course and the up-trend should be resumed shortly.
On February 10, we recommended taking profit at prices above $ 8, as even the best need a rest from time to time.
The share price of MFL has indeed corrected along with the gold price and we believe that the time has come to resume buying.
Our recommendation: Buy!
If you wish to receive our follow-ups on the above recommended gold shares simply register at www.pzim.com
Peter Zihlmann
April 10, 2003
Disclosure: The author has not been paid to write this article nor has he
received any other inducement to do so. The author is a shareholder in the
company and will benefit from any increase in the company's share price.
Disclaimer: The author's objective in writing this article is to invoke an
interest on the part of potential investors in this stock to the point where
they are encouraged to conduct their own further diligent research. Neither
the information nor the opinions expressed should be construed as a
solicitation to buy or sell this stock. Investors are recommended to obtain
the advice of a qualified investment advisor before entering into any transactions in the stock.
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