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Minefinders Subsidiary Commences Binding Arbitration
Seeking Us$10 Million In Damages From Ausenco
May 23,
2008
VANCOUVER, BRITISH COLUMBIA - Minefinders
Corporation Ltd. (the �Company�) (TSX: MFL / AMEX: MFN), a precious metals mining and exploration company,
announced today that a subsidiary company has commenced a binding arbitration
process seeking approximately US$10 million in damages from Ausenco
International PTY of Brisbane, Australia and a related company, Ausenco
Americas LLC.
The binding arbitration was launched on May 22, 2008
by Minefinders� subsidiary, Compa��a Minera Dolores S.A. de CV. (�CMD�),
before the International Centre for Dispute Resolution of the American
Arbitration Association. In addition to the damages, CMD seeks to recover the
costs of the arbitration and its legal fees.
Separately, CMD has assumed responsibility for the
final stages of commissioning the multi-million ounce Dolores gold and silver
mine in Mexico. Minefinders continues to expect the mine will commence
commercial production in mid-2008, based on the updated reserves and
economics study disclosed on February 14, 2008. Minefinders believes it has
adequate funds in place and available from its revolving credit line to meet
its cash needs for the commissioning of the Dolores Mine until the mine
reaches full commercial production.
The claim for damages relates to breaches by Ausenco
of contracts between CMD and the Ausenco companies, under which Ausenco
Americas was to provide engineering and design services for the Dolores mine
and Ausenco International was to act as construction manager. In the
arbitration Minefinders alleges that the Ausenco companies were responsible
for a number of engineering, design and construction problems and delays that
increased the cost of developing the Dolores mine compared with expectations
prior to the February 14, 2008 study. A portion of this additional cost will
be recouped should Minefinders be successful in the arbitration.
Minefinders is aware that Ausenco International
filed a writ of summons in Supreme Court of British Columbia on May 9, 2008,
against Minefinders and CMD for allegedly not paying US$1.9 million under the
construction management agreement. The writ of summons has not been
served, and all disputes under the construction management agreement and the
engineering services agreement between the parties must be decided by binding
arbitration. CMD has demanded that the writ against CMD be withdrawn based
upon the mandatory arbitration clause and as against Minefinders because
Minefinders is not a party to any of the relevant agreements. CMD intends to
vigorously defend against any such claims by Ausenco International or Ausenco
Americas.
Qualified Person
Mark Bailey MSc., P.Geo., is the "qualified person" with overall
responsibility for the Dolores Project and is responsible for the contents of
this news release.
About Minefinders
Minefinders is a precious metals mining and
exploration company. The Company is in the final stages of commissioning the
multi-million ounce Dolores gold and silver mine in Mexico. Construction at
Dolores is substantially complete. Mining within the pit began last fall and,
to date, more than 7.3 million tonnes of material has been moved and 700,000
tonnes of development ore stockpiled. Ore is now being crushed and
placed on the leach pad with the recently commissioned conveying and stacking
system. The mine is expected to have a 15-year life as an open pit mine with
additional potential as a high-grade underground mine in the future. The
Company continues its exploration efforts on several other prospective
projects in Mexico to build a quality pipeline of precious metals projects
for future growth.
MINEFINDERS CORPORATION LTD.
�Mark H. Bailey�
Mark H. Bailey
President and Chief Executive Officer
Safe Harbor Statement under the United States
Private Securities Litigation Act of 1995: Statements in this release that
are forward-looking, including statements relating to the timing of the
commencement and completion of the construction of, and the commencement of
production from, the Dolores mine, the anticipated costs related to the
Dolores mine, the adequacy of the capital and anticipated expenditures for
working capital and exploration, and other statements that are based on the
estimates, projections and expectations of management are subject to various
risks and uncertainties concerning the specific factors identified above and
in the Company�s periodic filings with the regulatory authorities in Canada
and the United States. Such information contained herein represents
management�s best judgment as of the date hereof based on information
currently available. The Company does not intend to update this
information and disclaims any legal liability to the contrary.
Investor contact:
Mike Wills
Minefinders Corporation Ltd.
(604) 687-6263
mike@minefinders.com
www.minefinders.com
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