Wednesday, August 4, 2010

Minefinders (MFN) ( Would you buy a used car from the man that guides forward production at this underachiever?

Minefinders (MFN) ( released its 2q10 results after the bell today and guess what? Yep, they sucked again. The NR, numbers and fun can be found here, but what MFN failed to do once again is pass Rule One™ for a producing gold miner in commercial production yet again, i.e. it failed to make a profit.

Here's the count since the company started commercially at the Dolores (English translation = "pains"...quite apt, really) and we see that in the five quarters of commercial production so far, MFN has managed to return a profit just once:

All that and record gold prices too, which is pretty pathetic. The biggest problem at MFN is the tendency it has for OPUD (over-promise, under-deliver) which is summed up in these next two tables, the first for gold production and the second for silver production. What you see here are the guidances the company has made for the second half of 2009, the first half of 2010 and the second half of 2010 that's to come. For the record the 2h09 guidance is taken from the company's 2q09 MD&A and the 2010 guidances are from the 2009 year-end report and MD&A and they're all available on SEDAR if you don't believe me.

Minefinders (MFN) Au prod vs previous MFN guidance, six month periods
gold guidance* result comment
2h09 50,000 to 60,000 39,759 fail
1h10 36,000 to 40,000 32,561 fail
2q10 55,000 to 60,500 ? buy used car?
*2h09 guidance from 2q09 md&a, 2010 guidance from YE09 md&a

Minefinders (MFN) Ag prod vs previous MFN guidance, six month periods
silver guidance* result comment
2h09 1,200,000 to 1,300,000 615,870 fail
1h10 680,000 to 765,000 522,233 fail
2q10 1,650,000 to 1,830,000 ? boy cry wolf?
*2h09 guidance from 2q09 md&a, 2010 guidance from YE09 md&a

Each and every time, MFN has promised the market more than it was able to deliver. In the case of gold, over the 12 months MFN has produced 72,320 oz Au, which is 13,680 ounces less than even its minimum guidance level. In the case of silver it's even worse, with the 1.138m ounces produced falling 740,000 ounces short of even the minimum targets.

So now MFN is guiding higher and telling the world that the higher grades being mined now will get production up to at least 55k oz Au and 1.65m oz Ag in the half year to come. The obvious question here is to ask how many more times can MFN get away with pulling the wool over the eyes of the investment community before people start calling bullshit on this operation?

Meanwhile, let's check on how the company's stock price has got on this year:
Oh dear. I wonder how MFN's paid shiller Mike Niehuser is going to explain away the MFN mediocrity this time? In the end, the name of the company itself is a bit of a giveaway. It should have stuck to finding mines, not trying to play at producer.

DYODD, dude.