Tuesday, March 30, 2010

Minefinders (TSE:MFL) Has Upside Potential

Minefinders Future Prospects

Minefinders (TSE:MFL) has been experience increased scrutiny after turning their first quarterly profit, based on extracting gold and silver from the Dolores mine in Mexico.

One positive looking ahead for the company is it's trading near the level before the turned profitable and constructed a road to the Dolores mining project.

Some wonder why it isn't increasing in share price because they are now profitable and seemingly have worked through the challenges of the start-up. The answer could be investors simply haven't heard that much about them, or aren't quiet sure they are ready for the big time.

I think if their next quarter is also profitable, they will get a long look from potential investors.

The company is also free now to pursue higher grades of gold and silver, which should generate better revenue and profits.

There is the thought of building a mill to increase production of higher-grade silver, which could be another positive step toward long-term profitability, although it could cut into profits over the short haul.

The mine has an estimated life of 15 years, and the addition of a mill could extend or shorten it, depending on whether there are more resources added because of the mill, or it could shorten it because of improved and quicker processing.

Dolores is located close to Chihuahua, Mexico.

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