TORONTO (miningweekly.com) – Vancouver-based Minefinders Corporation has lowered its production guidance for 2009, after crusher throughput was lower than expected and lower-grade ore was mined in July and August, at the firm's Dolores mine, in Mexico.

Minefinders now expects to produce about 1,4-million ounces of silver and 80 000 oz of gold this year, at cash operating costs of between $520/oz and $530/oz of gold equivalent.

In August, the firm forecast full-year sales of between 1,8-million and 1,9-million ounces of silver and 85 000 oz to 95 000 oz of gold, at an operating cash cost of between $450 and $485 per gold-equivalent ounce.

Minefinders said that crusher throughput has trended under plan all year, because of fabrication problems in two of the three tertiary screen, plus other smaller problems, which has negatively affected production.

During the third quarter, the company launched a comprehensive assessment and repair programme, which constrained throughput during the period, but initial repairs were completed in August, and crusher throughput increased “significantly” in September, and has since neared the planned rate of 18 000 t/d, the firm said.

“The remaining screen repairs are scheduled for early 2010 and Minefinders expects crusher throughput to average planned rates during the fourth quarter of 2009 and forward,” the company said.

Prestripping is also under way to expose the higher-grade central dome of the deposit, which will help boost production and lower costs.

The company was restricted for most of this year because of a delay in relocating the Dolores village, which had blocked access to the higher-grade areas of the deposit.

The village was successfully moved during the third quarter.

Minefinders narrowed its third-quarter loss to $0,7-million, compared with $6,8-million a year ago, when it had yet to pour the first gold and silver dore at Dolores.

Revenue in the September quarter was $24,1-million, and the firm reported a positive operating cash flow of $3,2-million.

The company sold 24 689 gold-equivalent ounces in the third quarter.

“With crusher throughput now at planned rates and prestripping well advanced in the heart of the Dolores deposit, production and cash costs should improve markedly going forward,” CEO Mark Bailey said in a statement.

Minefinders also reported that it has reached a settlement in an arbitration case with engineering and project management firm Ausenco. Under the settlement, Minefinders will receive a net amount of cash and will not have to pay an accrued amount owed to Ausenco.

Minefinders shares slid 1,8% on Monday morning, to C$11,32 apiece by 11:28 in Toronto.