---

Exhibit 2





Consolidated Financial Statements

(Expressed in thousands of United States dollars)

MINEFINDERS CORPORATION LTD.

Years ended December 31, 2008, 2007 and 2006





---

MANAGEMENTS RESPONSIBILITY FOR FINANCIAL REPORTING

The consolidated financial statements of Minefinders Corporation Ltd. have been prepared by, and are the responsibility of, the Companys management. The consolidated financial statements are prepared in
accordance with accounting principles generally accepted in Canada and reflect managements best estimates and judgement on information currently available.

Management has developed and is maintaining a system of internal controls to obtain reasonable assurance that the Companys assets are safeguarded, transactions are authorized, and financial information is
reliable.

The Board of Directors is responsible for ensuring management fulfills its responsibilities. The Audit Committee meets with the Companys management and external auditors to discuss the results of the audit and to
review the annual consolidated financial statements prior to the Audit Committees submission to the Board of Directors for approval.

The consolidated financial statements have been audited by KPMG LLP and their report outlines the scope of their examination and gives their opinion on the consolidated financial statements.

MANAGEMENTS REPORT ON INTERNAL CONTROLS OVER FINANCIAL REPORTING

The Company's management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. The Companys
management has employed a framework consistent with Exchange Act Rule 13a-15(c), to evaluate the Companys internal control over financial reporting as described below. The Companys internal control over financial reporting is a process
designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation and fair presentation of financial statements for external purposes in accordance with generally accepted accounting
principles.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The Companys management assessed the effectiveness of the Companys internal control over financial reporting as of December 31, 2008. In making this assessment, the Companys management used the
criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) inInternal Control-Integrated Framework. Based upon its
assessment, management concluded that, as of December 31, 2008, the Companys internal control over financial reporting was effective.

KPMG LLP, an independent registered public accounting firm, has audited the effectiveness of our internal control over financial reporting as of December 31, 2008, as stated in their report which appears
herein.

|Mark H. Bailey (signed)               | Greg D. Smith (signed) 
|------------------------------------- | -----------------------
|President and Chief Executive Officer | Chief Financial Officer
|                                     
|February 20, 2009                     | February 20, 2009      

---

[exhibit9001.jpg]

| |                                                                                              |                                                                                          
| | -------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------
| | KPMG LLP
Chartered Accountants
PO Box 10426 777 Dunsmuir Street
Vancouver, BC V7Y 1K3
Canada | Telephone    (604) 691-3000
Fax               (604) 691-3031
Internet         www.kpmg.ca

AUDITORS' REPORT TO THE SHAREHOLDERS

We have audited the accompanying consolidated balance sheet of Minefinders Corporation Ltd. (the Company) as at December 31, 2008 and the consolidated statements of operations, changes in shareholders equity, and cash flows for the year ended December 31, 2008. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with Canadian generally accepted auditing standards and in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit approach provides a reasonable basis for our audit opinion.

In our opinion, these consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as at December 31, 2008 and the results of its operations and its cash flows for the year ended December 31, 2008 in accordance with Canadian generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company's internal control over financial reporting as of December 31, 2008, based on the criteria established in Internal ControlIntegrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated February 20, 2009 expressed an unqualified opinion on the effectiveness of the Companys internal control over financial reporting.

The consolidated financial statements as at December 31, 2007 and for each of the years in the two year period ended December 31, 2007 were audited by other auditors, who expressed an opinion without reservation on those statements in their report, dated March 5, 2008.

KPMG LLP (signed)

Chartered Accountants

Vancouver, Canada 
February 20, 2009

KPMG LLP, a Canadian limited liability partnership is the Canadian 
member firm of KPMG International, a Swiss cooperative.

---

[exhibit9001.jpg]

| |                                                                                              |                                                                                          
| | -------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------
| | KPMG LLP
Chartered Accountants
PO Box 10426 777 Dunsmuir Street
Vancouver, BC V7Y 1K3
Canada | Telephone    (604) 691-3000
Fax               (604) 691-3031
Internet         www.kpmg.ca

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

AUDITORS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING UNDER STANDARDS OF 
THE PUBLIC COMPANY ACCOUNTING OVERSIGHT BOARD (UNITED STATES)

To the Shareholders and Board of Directors of Minefinders Corporation Ltd.

We have audited Minefinders Corporation Ltd.s (the Company) internal control over financial reporting as of December 31, 2008, based on the criteria established in Internal ControlIntegrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Managements Report on Financial Statements and Assessment of Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/ 2

KPMG LLP, a Canadian limited liability partnership is the Canadian 
member firm of KPMG International, a Swiss cooperative.

---

[exhibit9001.jpg]

Page 2

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2008, based on the criteria established in Internal ControlIntegrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

We also have conducted our audit on the consolidated financial statements in accordance with Canadian generally accepted auditing standards and with the standards of the Public Company Accounting Oversight Board
(United States). Our report dated February 20, 2009, expressed an unqualified opinion on those consolidated financial statements.

KPMG LLP (signed)

Chartered Accountants

Vancouver, Canada

February 20, 2009

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|MINEFINDERS CORPORATION LTD.                        
|----------------------------------------------------
|Consolidated Balance Sheets                         
|(Expressed in thousands of United States dollars)   
|December 31, 2008, with comparative figures for 2007

|                                               |   | 2008     |   |   | 2007    |  
|---------------------------------------------- | - | -------- | - | - | ------- | -
|                                              
|                                              
|Assets                                         |   |          |   |   |         |  
|                                              
|Current assets:                                |   |          |   |   |         |  
|Cash and cash equivalents                      | $ | 26,018   |   | $ | 20,935  |  
|Receivables (note 4)                           |   | 4,266    |   |   | 10,431  |  
|Inventory (note 5)                             |   | 12,494   |   |   | 1,558   |  
|Prepaid expenses                               |   | 792      |   |   | 456     |  
|                                               |   | 43,570   |   |   | 33,380  |  
|                                              
|Mineral property, plant and equipment (note 6) |   | 228,252  |   |   | 160,181 |  
|                                              
|                                               | $ | 271,822  |   | $ | 193,561 |  
|                                              
|                                              
|Liabilities and Shareholders Equity           |   |          |   |   |         |  
|                                              
|Current liabilities                            |   |          |   |   |         |  
|Accounts payable and accrued liabilities       | $ | 8,739    |   | $ | 4,532   |  
|Current portion of long-term debt (note 7)     |   | 10,000   |   |   | -       |  
|                                               |   | 18,739   |   |   | 4,532   |  
|                                              
|Long-term debt (note 7)                        |   | 115,364  |   |   | 59,965  |  
|                                              
|Asset retirement obligation (note 8)           |   | 1,913    |   |   | 1,644   |  
|                                              
|Shareholders equity:                          |   |          |   |   |         |  
|Capital stock (note 9)                         |   | 210,569  |   |   | 175,817 |  
|Equity portion of convertible notes (note 7)   |   | 27,366   |   |   | 27,366  |  
|Contributed surplus (note 10)                  |   | 18,053   |   |   | 15,299  |  
|Deficit                                        |   | (125,251 | ) |   | (96,131 | )
|Accumulated other comprehensive income         |   | 5,069    |   |   | 5,069   |  
|                                               |   | 135,806  |   |   | 127,420 |  
|Nature of operations (note 1)                  |   |          |   |   |         |  
|Future income taxes (note 11)                  |   |          |   |   |         |  
|Commitments and contingencies (note 12)        |   |          |   |   |         |  
|Subsequent event (note 4)                      |   |          |   |   |         |  
|                                              
|                                               | $ | 271,822  |   | $ | 193,561 |  

See accompanying notes to consolidated financial statements.

Approved on behalf of the Board:

|Mark H. Bailey | Director | Robert L. Leclerc | Director
|---------------- | -------- | ------------------- | --------

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|MINEFINDERS CORPORATION LTD.                                               
|---------------------------------------------------------------------------
|Consolidated Statements of Operations and Comprehensive Loss               
|(Expressed in thousands of United States dollars, except per share amounts)
|Years ended December 31, 2008, 2007 and 2006                               

|                                                          |   | 2008       |   |   | 2007       |   |   | 2006       |  
|--------------------------------------------------------- | - | ---------- | - | - | ---------- | - | - | ---------- | -
|                                                         
|Operating expenses:                                       |   |            |   |   |            |   |   |            |  
|Office and administration                                 | $ | 8,661      |   | $ | 5,698      |   | $ | 2,820      |  
|Amortization and accretion of asset retirement obligation |   | 416        |   |   | 661        |   |   | 21         |  
|Exploration (schedule)                                    |   | 5,437      |   |   | 7,402      |   |   | 11,769     |  
|Stock option compensation - exploration (note 10)         |   | 757        |   |   | 857        |   |   | 1,003      |  
|Stock option compensation (note 10)                       |   | 2,048      |   |   | 3,478      |   |   | 3,404      |  
|Accretion of convertible note discount (note 7)           |   | 5,399      |   |   | 4,900      |   |   | 792        |  
|                                                          |   | 22,718     |   |   | 22,996     |   |   | 19,809     |  
|                                                         
|Other items:                                              |   |            |   |   |            |   |   |            |  
|Interest on long-term debt (note 7)                       |   | 5,209      |   |   | 3,811      |   |   | 731        |  
|Financing fees                                            |   | 706        |   |   | 745        |   |   | 939        |  
|Foreign exchange loss (gain)                              |   | 1,250      |   |   | (5,108     | ) |   | (1,120     | )
|Interest income                                           |   | (763       | ) |   | (3,240     | ) |   | (2,167     | )
|                                                          |   | 6,402      |   |   | (3,792     | ) |   | (1,617     | )
|                                                         
|Net loss and comprehensive loss for the year              | $ | 29,120     |   | $ | 19,204     |   | $ | 18,192     |  
|                                                         
|Loss per share - basic and diluted                        | $ | (0.58      | ) | $ | (0.39      | ) | $ | (0.41      | )
|                                                         
|Weighted average shares outstanding                       |   | 50,198,115 |   |   | 48,638,885 |   |   | 44,492,885 |  

See accompanying notes to consolidated financial statements.

2

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|MINEFINDERS CORPORATION LTD.                     
|-------------------------------------------------
|ConsolidatedStatements of Shareholders Equity   
|(Expressed in thousands of United States dollars)
|Years ended December 31, 2008, 2007 and 2006     

|                                                         |   |         |   | Equity      |   |             |   |   |          |   |   |             |   |   | Accumulated   |   |         |  
|-------------------------------------------------------- | - | ------- | - | ----------- | - | ----------- | - | - | -------- | - | - | ----------- | - | - | ------------- | - | ------- | -
|                                                         |   |         |   | portion of  |   |             |   |   |          |   |   | Cumulative  |   |   | other         |   |         |  
|                                                         |   | Capital |   | convertible |   | Contributed |   |   |          |   |   | translation |   |   | comprehensive |   |         |  
|                                                         |   | stock   |   | notes       |   | surplus     |   |   | Deficit  |   |   | adjustment  |   |   | income        |   | Total   |  
|                                                        
|                                                         |   |         |   |             |   |             |   |   |          |   |   |             |   |   |               |   |         |  
|Balance, December 31,2005                                | $ | 85,672  | $ | -           | $ | 7,954       |   | $ | (58,735  | ) | $ | 7,650       |   | $ | -             | $ | 42,541  |  
|Issue of common shares for cash, net of shareissue costs |   | 78,705  |   | -           |   | -           |   |   | -        |   |   | -           |   |   | -             |   | 78,705  |  
|Exercise of stock optionsfor cash                        |   | 2,019   |   | -           |   | (859        | ) |   | -        |   |   | -           |   |   | -             |   | 1,160   |  
|Issue of convertible notes                               |   | -       |   | 27,366      |   | -           |   |   | -        |   |   | -           |   |   | -             |   | 27,366  |  
|Stock based compensation                                 |   | -       |   | -           |   | 5,003       |   |   | -        |   |   | -           |   |   | -             |   | 5,003   |  
|Net loss                                                 |   | -       |   | -           |   | -           |   |   | (18,192  | ) |   | -           |   |   | -             |   | (18,192 | )
|Foreign exchangeadjustment                               |   | -       |   | -           |   | -           |   |   | -        |   |   | (2,581      | ) |   | -             |   | (2,581  | )
|                                                        
|Balance, December 31,2006                                |   | 166,396 |   | 27,366      |   | 12,098      |   |   | (76,927  | ) |   | 5,069       |   |   | -             |   | 134,002 |  
|Change in accountingpolicy (note 2(f))                   |   | -       |   | -           |   | -           |   |   | -        |   |   | (5,069      | ) |   | 5,069         |   | -       |  
|                                                        
|Balance, January 1, 2007,as adjusted                     |   | 166,396 |   | 27,366      |   | 12,098      |   |   | (76,927  | ) |   | -           |   |   | 5,069         |   | 134,002 |  
|Exercise of stockoptions for cash                        |   | 9,421   |   | -           |   | (2,639      | ) |   | -        |   |   | -           |   |   | -             |   | 6,782   |  
|Stock-basedcompensation                                  |   | -       |   | -           |   | 5,840       |   |   | -        |   |   | -           |   |   | -             |   | 5,840   |  
|Net loss                                                 |   | -       |   | -           |   | -           |   |   | (19,204  | ) |   | -           |   |   | -             |   | (19,204 | )
|                                                        
|                                                         |   |         |   |             |   |             |   |   |          |   |   |             |   |   |               |   |         |  
|Balance, December 31,2007                                |   | 175,817 |   | 27,366      |   | 15,299      |   |   | (96,131  | ) |   | -           |   |   | 5,069         |   | 127,420 |  
|Exercise of stockoptions for cash                        |   | 3,242   |   | -           |   | (980        | ) |   | -        |   |   | -           |   |   | -             |   | 2,262   |  
|Stock-basedcompensation                                  |   | -       |   | -           |   | 3,734       |   |   | -        |   |   | -           |   |   | -             |   | 3,734   |  
|Share-based payment                                      |   | 386     |   | -           |   | -           |   |   | -        |   |   | -           |   |   | -             |   | 386     |  
|Issue of common sharesfor cash, net of shareissue costs  |   | 31,124  |   | -           |   | -           |   |   | -        |   |   | -           |   |   | -             |   | 31,124  |  
|Net loss                                                 |   | -       |   | -           |   | -           |   |   | (29,120  | ) |   | -           |   |   | -             |   | (29,120 | )
|                                                        
|Balance, December 31,2008                                | $ | 210,569 | $ | 27,366      | $ | 18,053      |   | $ | (125,251 | ) | $ | -           |   | $ | 5,069         | $ | 135,806 |  

See accompanying notes to consolidated financial statements.

3

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|MINEFINDERS CORPORATION LTD.                     
|-------------------------------------------------
|Consolidated Statements of Cash Flows            
|(Expressed in thousands of United States dollars)
|Years ended December 31, 2008, 2007 and 2006     

|                                                          |   | 2008    |   |   | 2007     |   |   | 2006    |  
|--------------------------------------------------------- | - | ------- | - | - | -------- | - | - | ------- | -
|                                                         
|                                                         
|Cash provided by (used in):                               |   |         |   |   |          |   |   |         |  
|                                                         
|Operations:                                               |   |         |   |   |          |   |   |         |  
|Net loss for the year                                     | $ | (29,120 | ) | $ | (19,204  | ) | $ | (18,192 | )
|Items not involving cash:                                 |   |         |   |   |          |   |   |         |  
|Amortization and accretion of asset retirement obligation |   | 416     |   |   | 661      |   |   | 21      |  
|Accretion of convertible notes discount                   |   | 5,399   |   |   | 4,900    |   |   | 792     |  
|Foreign exchange loss (gain)                              |   | 943     |   |   | (5,606   | ) |   | 1,926   |  
|Stock option compensation                                 |   | 2,805   |   |   | 4,335    |   |   | 4,407   |  
|Other                                                     |   | 13      |   |   | (8       | ) |   | 97      |  
|Net changes in non-cash working capital balances:         |   |         |   |   |          |   |   |         |  
|Receivables                                               |   | 6,165   |   |   | (6,685   | ) |   | (2,981  | )
|Inventory                                                 |   | (10,936 | ) |   | (1,558   | ) |   | -       |  
|Prepaid expenses                                          |   | (336    | ) |   | 135      |   |   | 393     |  
|Accounts payable and accrued liabilities                  |   | 539     |   |   | (30      | ) |   | (476    | )
|                                                          |   | (24,112 | ) |   | (23,060  | ) |   | (14,013 | )
|                                                         
|Investments:                                              |   |         |   |   |          |   |   |         |  
|Purchase of mineral property, plant and equipment         |   | (63,248 | ) |   | (90,247  | ) |   | (53,620 | )
|                                                         
|Financing:                                                |   |         |   |   |          |   |   |         |  
|Net proceeds on issue of common shares                    |   | 33,386  |   |   | 6,782    |   |   | 79,865  |  
|Net proceeds on issue of convertible notes                |   | -       |   |   | (142     | ) |   | 81,691  |  
|Drawdown of revolving credit facility                     |   | 60,000  |   |   | -        |   |   | -       |  
|                                                          |   | 93,386  |   |   | 6,640    |   |   | 161,556 |  
|                                                         
|Effect of exchange rates on cash and cash equivalents     |   | (943    | ) |   | 5,607    |   |   | (4,337  | )
|                                                         
|Increase (decrease) in cash and cash equivalents          |   | 5,083   |   |   | (101,060 | ) |   | 89,586  |  
|                                                         
|Cash and cash equivalents, beginning of year              |   | 20,935  |   |   | 121,995  |   |   | 32,409  |  
|                                                         
|Cash and cash equivalents, end of year                    | $ | 26,018  |   | $ | 20,935   |   | $ | 121,995 |  
|                                                         
|Supplementary information:                                |   |         |   |   |          |   |   |         |  
|Interest paid                                             | $ | 4,661   |   | $ | 4,367    |   | $ | -       |  
|Non-cash investing and financing activities:              |   |         |   |   |          |   |   |         |  
|                                                          |   |         |   |   |          |   |   |         |  
|Increase in asset retirement obligations included in      |   |         |   |   |          |   |   |         |  
|mineral property, plant andequipment                      |   | 145     |   |   | 355      |   |   | 1,188   |  
|Stock option compensation deferred to                     |   |         |   |   |          |   |   |         |  
|mineral property, plant and equipment                     |   | 929     |   |   | 1,505    |   |   | 596     |  

See accompanying notes to consolidated financial statements.

4

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|MINEFINDERS CORPORATION LTD.                                               
|---------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                 
|(Expressed in thousands of United States dollars, except per share amounts)
|Years ended December 31, 2008, 2007 and 2006                               

|1. | Nature of operations:                                                                                                                                                                                                                                                                                                                                                                                      
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | The Company was organized on February 4, 1975 under the laws of the Province of Ontario and is engaged in the exploration, development, and acquisition of mineral deposits. The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business.         
|  
|   | The Company has completed the construction of its 100% owned Dolores gold and silver project in Mexico and is in the pre-commercial phase of operations. In these financial statements, development costs incurred in the construction and commissioning of the Dolores Mine have been capitalized to mineral property, plant and equipment.                                                               
|  
|   | The Company expects that revenues from production will finance the operation of the Dolores Mine. The Company may have to raise additional funds over and above amounts raised to date to complete the acquisition, exploration and development of its property interests and, while it has been successful in doing so in the past, there can be no assurance that it will be able to do so in the future.
|  
|2. | Changes in accounting policies:                                                                                                                                                                                                                                                                                                                                                                            
|  
|   | (a)                                                                                                                                                                                                                                                                                                                                                                                                        
|  
|   | (b)                                                                                                                                                                                                                                                                                                                                                                                                        
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                            
|  

5

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|MINEFINDERS CORPORATION LTD.                                               
|---------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                 
|(Expressed in thousands of United States dollars, except per share amounts)
|Years ended December 31, 2008, 2007 and 2006                               

|2. | Changes in accounting policies (continued):
|-- | -------------------------------------------
|  
|   | (c)                                        
|  
|   | (d)                                        
|  
|   |                                            
|  
|   |                                            
|  
|   |                                            
|  
|   |                                            
|  

6

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|MINEFINDERS CORPORATION LTD.                                               
|---------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                 
|(Expressed in thousands of United States dollars, except per share amounts)
|Years ended December 31, 2008, 2007 and 2006                               

|2. | Changes in accounting policies (continued):
|-- | -------------------------------------------
|  
|   | (d)                                        
|  
|   |                                            
|  
|   |                                            
|  
|   |                                            
|  
|   |                                            
|  
|   |                                            
|  
|   |                                            
|  
|   |                                            
|  
|   |                                            
|  

| |                  |   | December 31, 2008 |   | December 31, 2007
| | ---------------- | - | ----------------- | - | -----------------
| |                  |   | Financial         |   | Financial        
| |                  |   | assets            |   | liabilities      
| |                 
| | Canadian dollars | $ | 22,340            | $ | 1,098            
| | Mexican pesos    |   | 4,598             |   | 2,975            
| |                 
| |                  | $ | 26,938            | $ | 4,073            

Of the financial assets listed above, $22,310 (December 31, 2007 - $3,027) represents cash and cash equivalents held in Canadian dollars, and $421 (December 31, 2007 - $890) represents cash held in Mexican pesos. The remaining cash and cash equivalents are held in US dollars.

7

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|MINEFINDERS CORPORATION LTD.                                               
|---------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                 
|(Expressed in thousands of United States dollars, except per share amounts)
|Years ended December 31, 2008, 2007 and 2006                               

|2. | Changes in accounting policies (continued):
|-- | -------------------------------------------
|  
|   | (d)                                        
|  
|   |                                            
|  
|   |                                            
|  
|   |                                            
|  
|   |                                            
|  
|   |                                            
|  
|   |                                            
|  
|   | (e)                                        
|  
|   |                                            
|  

8

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|MINEFINDERS CORPORATION LTD.                                               
|---------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                 
|(Expressed in thousands of United States dollars, except per share amounts)
|Years ended December 31, 2008, 2007 and 2006                               

|2. | Changes in accounting policies (continued):
|-- | -------------------------------------------
|  
|   | (f)                                        
|  
|   |                                            
|  
|   |                                            
|  
|   |                                            
|  

9

---

|MINEFINDERS CORPORATION LTD.                                               
|---------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                 
|(Expressed in thousands of United States dollars, except per share amounts)
|Years ended December 31, 2008, 2007 and 2006                               

|3. | Significant accounting policies:
|-- | --------------------------------
|  
|   | (a)                             
|  
|   |                                 
|  
|   | (b)                             
|  
|   |                                 
|  
|   | (c)                             
|  
|   |                                 
|  
|   | (d)                             
|  
|   |                                 
|  
|   |                                 
|  
|   |                                 
|  

10

---

|MINEFINDERS CORPORATION LTD.                                               
|---------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                 
|(Expressed in thousands of United States dollars, except per share amounts)
|Years ended December 31, 2008, 2007 and 2006                               

|3. | Significant accounting policies (continued):
|-- | --------------------------------------------
|  
|   | (e)                                         
|  
|   |                                             
|  
|   | (f)                                         
|  
|   |                                             
|  
|   | (g)                                         
|  
|   |                                             
|  
|   | (h)                                         
|  
|   |                                             
|  

11

---

|MINEFINDERS CORPORATION LTD.                                               
|---------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                 
|(Expressed in thousands of United States dollars, except per share amounts)
|Years ended December 31, 2008, 2007 and 2006                               

|3. | Significant accounting policies (continued):
|-- | --------------------------------------------
|  
|   | (i)                                         
|  
|   |                                             
|  
|   |                                             
|  
|   | (j)                                         
|  
|   |                                             
|  
|   | (k)                                         
|  
|   |                                             
|  

12

---

|MINEFINDERS CORPORATION LTD.                                               
|---------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                 
|(Expressed in thousands of United States dollars, except per share amounts)
|Years ended December 31, 2008, 2007 and 2006                               

|3. | Significant accounting policies (continued):
|-- | --------------------------------------------
|  
|   | (m)                                         
|  
|   |                                             
|  
|   |                                             
|  
|   | (n)                                         
|  
|   |                                             
|  
|   | (o)                                         
|  
|   |                                             
|  
|   | (p)                                         
|  
|   |                                             
|  
|   |                                             
|  

13

---

|MINEFINDERS CORPORATION LTD.                                               
|---------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                 
|(Expressed in thousands of United States dollars, except per share amounts)
|Years ended December 31, 2008, 2007 and 2006                               

|4. | Receivables:                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | Of the $4,266 in receivables (2007 - $10,431), $3,864 (2007 - $10,360) is value added tax (VAT) paid in Mexico on goods and services for the construction and commissioning of the Dolores Mine. The VAT receivable is refundable from the Mexican tax authorities. $17,001 of VAT was refunded to the Company during 2008 (2007 - $2,540). Subsequent to December 31, 2008, $3,230 of the VAT balance of $3,864 was refunded to the Company.
|  
|5. | Inventory:                                                                                                                                                                                                                                                                                                                                                                                                                                   
|  

| |                 |   | 2008   |   | 2007 
| | --------------- | - | ------ | - | -----
| |                
| | Supplies        | $ | 3,261  | $ | 1,558
| | Ore stockpiles  |   | 359    |   | -    
| | Work in process |   | 8,465  |   | -    
| | Finished goods  |   | 409    |   | -    
| |                
| |                 | $ | 12,494 | $ | 1,558

|**6.** | Mineral property, plant and equipment:                          
|------ | ----------------------------------------------------------------
|       |                                                                 
|       | Net carrying costs at December 31, 2008 and 2007 are as follows:

| |                                  |   | Mineral property  |   | Development |   | Plant and |   | Accumulated  |   |   |        
| | -------------------------------- | - | ----------------- | - | ----------- | - | --------- | - | ------------ | - | - | -------
| | 2008                             |   | acquisition costs |   | costs       |   | equipment |   | amortization |   |   | Total  
| | Dolores Mine, Mexico             | $ | 9,675             | $ | 100,941     | $ | 123,515   | $ | (6,422       | ) | $ | 227,709
| | Northern Sonora, Mexico          |   | 327               |   | -           |   | 62        |   | (40          | ) |   | 349    
| | Nevada properties, United States |   | 99                |   | -           |   | 253       |   | (210         | ) |   | 142    
| | Other                            |   | -                 |   | -           |   | 194       |   | (142         | ) |   | 52     
| |                                  | $ | 10,101            | $ | 100,941     | $ | 124,024   | $ | (6,814       | ) | $ | 228,252
| |                                 
| |                                  |   | Mineral property  |   | Development |   | Plant and |   | Accumulated  |   |   |        
| | 2007                             |   | acquisition costs |   | costs       |   | equipment |   | amortization |   |   | Total  
| | Dolores Mine, Mexico             | $ | 9,675             | $ | 129,310     | $ | 21,759    | $ | (1,128       | ) | $ | 159,616
| | Northern Sonora, Mexico          |   | 327               |   | -           |   | 62        |   | (30          | ) |   | 359    
| | Nevada properties, United States |   | 111               |   | -           |   | 248       |   | (197         | ) |   | 162    
| | Other                            |   | -                 |   | -           |   | 153       |   | (109         | ) |   | 44     
| |                                  | $ | 10,113            | $ | 129,310     | $ | 22,222    | $ | (1,464       | ) | $ | 160,181

14

---

|MINEFINDERS CORPORATION LTD.                                               
|---------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                 
|(Expressed in thousands of United States dollars, except per share amounts)
|Years ended December 31, 2008, 2007 and 2006                               

|6. | Mineral property, plant and equipment (continued):              
|-- | ----------------------------------------------------------------
|  
|   | Mineral properties, plant and equipment relate to the following:
|  
|   | (a)                                                             
|  
|   |                                                                 
|  
|   |                                                                 
|  
|   |                                                                 
|  
|   |                                                                 
|  
|   |                                                                 
|  
|   | (b)                                                             
|  
|   |                                                                 
|  

15

---

|MINEFINDERS CORPORATION LTD.                                               
|---------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                 
|(Expressed in thousands of United States dollars, except per share amounts)
|Years ended December 31, 2008, 2007 and 2006                               

|7. | Long-term debt:
|-- | ---------------

| |                                              |   | 2008    |   | 2007  
| | -------------------------------------------- | - | ------- | - | ------
| | Convertible notes (a)                        | $ | 65,364  | $ | 59,965
| | Scotia Capital revolving credit facility (b) |   | 60,000  |   | -     
| | Balance of long-term debt                    |   | 125,364 |   | 59,965
| | Less current portion (b)                     |   | 10,000  |   | -     
| |                                              | $ | 115,364 | $ | 59,965

| | (a) | In October 2006, the Company issued $85,000 in 4.5% unsecured convertible senior notes maturing on December 15, 2011, incurring a 3.5% underwriters fee and other expenses, aggregating $3,451 for net proceeds of $81,549. Interest is payable semi-annually in arrears on June 15 and December 15 of each year, beginning June 15, 2007. The notes are convertible into common shares at approximately $10.88 per share. A total of 7,812,500 common shares are issuable upon conversion and additional shares may become issuable following the occurrence of certain corporate acts or events. This adjustment provision is designed to compensate the noteholders for any such occurrence that causes economic loss to them.                                                                                                                                     
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    
| |     | The notes, less $27,366 which is classified as equity, are classified as a liability. As a result, the carrying value of the notes is lower than its face value. The $27,366 equity component, representing the fair value of the conversion feature, was determined using the Black-Scholes option pricing model and is net of $993 in issue costs. The assumptions used in calculating the equity component were a risk-free rate of 4.73%, expected term of 62 months and an expected volatility over the term of 55.5%. Using the effective interest rate method and the 14.26% rate implicit in the calculation, the difference of $28,359, characterized as the note discount, is being charged to operations and added to the liability over the term of the notes. Based on market rates, the fair value of the debt component at December 31, 2008 is $63,046.
| |    

| | Convertible notes, liability component  |   | 2008   |   | 2007   |  
| | --------------------------------------- | - | ------ | - | ------ | -
| | Balance, beginning of year              | $ | 59,965 | $ | 57,433 |  
| | Issue of convertible notes              |   | -      |   | -      |  
| | Change in accounting policy (note 2(f)) |   | -      |   | (2,368 | )
| | Balance, beginning of year, as adjusted |   | 59,965 |   | 55,065 |  
| | Accretion of debt discount for the year |   | 5,399  |   | 4,900  |  
| | Balance, end of year                    | $ | 65,364 | $ | 59,965 |  
| | Convertible notes, equity component     | $ | 27,366 | $ | 27,366 |  

16

---

|MINEFINDERS CORPORATION LTD.                                               
|---------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                 
|(Expressed in thousands of United States dollars, except per share amounts)
|Years ended December 31, 2008, 2007 and 2006                               

|7. | Long-term debt (continued):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|  
|8. | Asset retirement obligation:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|  
|   | The Companys environmental permit requires that it reclaim any land it disturbs during the mine construction and mine operations. Although the timing and the amount of the actual expenditures are uncertain, the Company has estimated the present value of the future reclamation obligation arising from its activities to December 31, 2008 to be $1,913 (2007 - $1,644). The present value of the future reclamation obligation assumes a discount rate of 7.65%, an inflation rate of 2.5%, an undiscounted amount to settle the obligation of $5,570, and the commencement of reclamation activities in 14.5 years.
|  

| |                                  |   | 2008  |   | 2007 
| | -------------------------------- | - | ----- | - | -----
| | Balance, beginning of year       | $ | 1,644 | $ | 1,188
| | Liabilities incurred in the year |   | 145   |   | 355  
| | Accretion expense                |   | 124   |   | 101  
| |                                  | $ | 1,913 | $ | 1,644

17

---

|MINEFINDERS CORPORATION LTD.                                               
|---------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                 
|(Expressed in thousands of United States dollars, except per share amounts)
|Years ended December 31, 2008, 2007 and 2006                               

|9. | Capital stock:
|-- | --------------
|   |               
|   | (a)           
|   |               
|   |               

| |                                                           | Number     |   |        
| | --------------------------------------------------------- | ---------- | - | -------
| |                                                           | of shares  |   | Amount 
| |                                                          
| | Balance, December 31, 2005                                | 36,641,914 | $ | 85,672 
| | Issue of common shares for cash, net of share issue costs | 11,000,000 |   | 78,705 
| | Exercise of stock options for cash                        | 368,000    |   | 2,019  
| | Exercise of stock options - cashless                      | 12,375     |   | -      
| |                                                          
| | Balance, December 31, 2006                                | 48,022,289 |   | 166,396
| | Exercise of stock options for cash                        | 1,224,000  |   | 9,421  
| | Exercise of stock options - cashless                      | 261,235    |   | -      
| |                                                          
| | Balance, December 31, 2007                                | 49,507,524 |   | 175,817
| | Exercise of stock options for cash                        | 250,000    |   | 3,242  
| | Exercise of stock options - cashless                      | 19,432     |   | -      
| | Share-based payment                                       | 30,000     |   | 386    
| | Issue of common shares for cash, net of share issue costs | 9,200,000  |   | 31,124 
| |                                                          
| | Balance, December 31, 2008                                | 59,006,956 | $ | 210,569

In December 2008, the Company issued 9,200,000 units at a price of CDN$4.35 per unit. Each unit consists of one common share of the Company and one-half of one common share purchase warrant. Each whole warrant entitles the holder to purchase one common share of the Company, at a price of CDN$5.00 per common share, on or before December 31, 2011. The net proceeds to the Company were $31,124 (net of brokers commission and related expenses). Of the 4,600,000 warrants issued as part of the offering, all were outstanding and exercisable at December 31, 2008.

| | (b) | Stock options:                                                                                                                                                                                                                                                                                                                                                                                                                          
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    
| |     | The number of shares available for grant under the Companys stock option plan (the Plan) is 5,574,000. The term of options granted cannot exceed ten years. The vesting of each option is determined by the Board of Directors and the exercise price is the quoted market value of the Companys shares at the date of grant. At December 31, 2008, 960,555 (2007 - 1,139,987) shares were available for future grants under the Plan.
| |    

18

---

|MINEFINDERS CORPORATION LTD.                                               
|---------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                 
|(Expressed in thousands of United States dollars, except per share amounts)
|Years ended December 31, 2008, 2007 and 2006                               

|9. | Capital stock (continued):
|-- | --------------------------
|   |                           
|   | (b)                       

| |                                  |            |   |   | Weighted        
| | -------------------------------- | ---------- | - | - | ----------------
| |                                  | Number     |   |   | average exercise
| |                                  | of options |   |   | price (CDN$)    
| |                                 
| | Outstanding at December 31, 2005 | 3,745,000  |   | $ | 6.95            
| | Granted                          | 1,260,000  |   |   | 9.00            
| | Cancelled                        | (110,000   | ) |   | 10.02           
| | Exercised for cash               | (368,000   | ) |   | 3.56            
| | Exercised - cashless             | (30,000    | ) |   | 5.64            
| |                                 
| | Outstanding at December 31, 2006 | 4,497,000  |   |   | 7.73            
| |                                 
| | Granted                          | 1,430,000  |   |   | 9.87            
| | Cancelled                        | (40,000    | ) |   | 10.94           
| | Exercised for cash               | (1,224,000 | ) |   | 5.82            
| | Exercised - cashless             | (465,000   | ) |   | 5.53            
| |                                 
| | Outstanding at December 31, 2007 | 4,198,000  |   |   | 9.26            
| |                                 
| | Granted                          | 765,000    |   |   | 10.65           
| | Cancelled                        | (720,000   | ) |   | 10.74           
| | Exercised for cash               | (250,000   | ) |   | 9.12            
| | Exercised - cashless             | (35,000    | ) |   | 5.64            
| |                                 
| | Outstanding at December 31, 2008 | 3,958,000  |   | $ | 9.30            

Of the 285,000 options exercised during the year ended December 31, 2008, 35,000 vested options were exercised by the holders in exchange for the issue of 19,432 common shares by way of a cashless stock option exercise

All options granted and outstanding as at December 31, 2008 were fully exercisable on the various grant dates. The weighted average grant-date fair value of options granted during the year ended December 31, 2008 was CDN$4.79 per option (2007 - CDN$4.43; 2006 - CDN$4.46) .

At December 31, 2008, the following stock options were outstanding and exercisable.

| |           | Exercise price |                  
| | --------- | -------------- | -----------------
| | Number    | (CDN$)         | Expiry date      
| |          
| | 50,000    | 12.53          | March 17, 2009   
| | 75,000    | 8.25           | May 17, 2009     
| | 580,000   | 8.80           | June 14, 2009    
| | 303,000   | 5.64           | July 12, 2010    
| | 930,000   | 9.00           | May 15, 2011     
| | 80,000    | 8.76           | November 1, 2011 
| | 5,000     | 10.94          | January 19, 2012 
| | 95,000    | 12.46          | March 12, 2012   
| | 1,075,000 | 9.57           | September 5, 2012
| | 100,000   | 11.10          | February 7, 2013 
| | 665,000   | 10.58          | May 7, 2013      
| | 3,958,000 |                |                  

19

---

|MINEFINDERS CORPORATION LTD.                                               
|---------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                 
|(Expressed in thousands of United States dollars, except per share amounts)
|Years ended December 31, 2008, 2007 and 2006                               

|10. | Stock based compensation:                                                                                                                                                                                                                                                                                   
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                             
|    | Compensation expense is determined using the Black-Scholes option pricing model. The Company granted 765,000 options during the year ended December 31, 2008 (2007 - 1,430,000, 2006 - 1,260,000). The weighted average assumptions used in calculating the expense of options granted during the year were:

| |                                                                               |   | 2008  |   |   | 2007  |   |   | 2006  |  
| | ----------------------------------------------------------------------------- | - | ----- | - | - | ----- | - | - | ----- | -
| |                                                                              
| | Risk-free rate                                                                |   | 3.43  | % |   | 4.2   | % |   | 4.2   | %
| | Dividend yield                                                                |   | nil   |   |   | nil   |   |   | nil   |  
| | Volatility factor of the expected market price of the Companys common shares |   | 46.0  | % |   | 47.3  | % |   | 56.0  | %
| | Weighted average expected life of the options (months)                        |   | 55    |   |   | 54    |   |   | 54    |  
| |                                                                              
| | Compensation expense for the year:                                            |   |       |   |   |       |   |   |       |  
| | Charged to income                                                             | $ | 2,048 |   | $ | 3,478 |   | $ | 3,404 |  
| | Charged to exploration costs                                                  |   | 757   |   |   | 857   |   |   | 1,003 |  
| | Capitalized to mineral property, plant and equipment                          |   | 929   |   |   | 1,505 |   |   | 596   |  
| |                                                                              
| |                                                                               | $ | 3,734 |   | $ | 5,840 |   | $ | 5,003 |  

Total stock-based compensation was credited to contributed surplus.

|11. | Income taxes:                                                                                                                                                                                             
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                           
|    | The tax effects of temporary differences between amounts recorded in the Companys accounts and the corresponding amounts as computed for income tax purposes give rise to deferred tax assets as follows:

| |                                                           |   | 2008    |   |   | 2007    |  
| | --------------------------------------------------------- | - | ------- | - | - | ------- | -
| |                                                          
| | Future income tax assets:                                 |   |         |   |   |         |  
| | Tax loss carry forward                                    | $ | 13,769  |   | $ | 5,244   |  
| | Plant and equipment                                       |   | 101     |   |   | 122     |  
| | Mineral properties and deferred exploration costs         |   | 6,160   |   |   | 11,734  |  
| | Financing costs                                           |   | 1,601   |   |   | 1,682   |  
| | Asset retirement obligation                               |   | 532     |   |   | 513     |  
| | Convertible note                                          |   | 870     |   |   | -       |  
| | Revolving credit facility                                 |   | 976     |   |   | -       |  
| | Total future income tax assets before valuation allowance |   | 24,009  |   |   | 19,295  |  
| | Valuation allowance established by management             |   | (24,009 | ) |   | (17,775 | )
| | Net future income tax assets, net of allowance            |   | -       |   |   | 1,520   |  
| |                                                          
| | Future income tax liabilities:                            |   |         |   |   |         |  
| | Plant and equipment                                       |   | -       |   |   | (266    | )
| | Convertible notes                                         |   | -       |   |   | (1,254  | )
| | Net future income tax liabilities                         |   | -       |   |   | (1,520  | )
| |                                                          
| |                                                           | $ | -       |   | $ | -       |  

20

---

|MINEFINDERS CORPORATION LTD.                                               
|---------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                 
|(Expressed in thousands of United States dollars, except per share amounts)
|Years ended December 31, 2008, 2007 and 2006                               

|11. | Income taxes (continued):                                                                                                                         
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                   
|    | The provision for income taxes differs from the amount calculated using the Canadian federal and provincial statutory income tax rates as follows:

| |                                           |   | 2008   |   |   | 2007   |   |   | 2006    |  
| | ----------------------------------------- | - | ------ | - | - | ------ | - | - | ------- | -
| |                                          
| | Benefit from net loss, at Canadian rates  | $ | (9,028 | ) | $ | (6,572 | ) | $ | (14,741 | )
| | Effect of difference in foreign tax rates |   | 324    |   |   | 619    |   |   | 10      |  
| | Non-deductible expenses                   |   | 1,511  |   |   | 1,210  |   |   | 78      |  
| | Non-deductible stock option compensation  |   | 870    |   |   | 1,186  |   |   | 1,150   |  
| | Benefit of losses not recognized          |   | 6,323  |   |   | 3,557  |   |   | 13,503  |  
| |                                          
| | Income tax expense for the year           | $ | -      |   | $ | -      |   | $ | -       |  

The Company establishes its valuation allowance based on projected future operations. When circumstances cause a change in managements judgment about the recoverability of future tax assets, the impact of the change on the valuation allowance (except for those relating to undeducted financing costs) will be reflected in current income. If the valuation allowance relating to undeducted financing costs is reduced, the Company will recognize this benefit as an increase in capital stock.

The Company has approximately $71,300 (2007 - $86,160) of exploration and development costs which are available for deduction against future income for tax purposes. In addition, the Company has tax losses in various jurisdictions of approximately $60,592 (2007 - $17,340) expiring in various amounts from 2008 to 2028.

The Companys future tax assets also include approximately $2,616 (2007 - $3,882) related to future deductions of share issue costs for tax purposes in excess of amounts deducted for financial reporting purposes. If and when the valuation allowance related to these amounts is reversed, the Company will recognize the benefit as an adjustment to share capital as opposed to income tax expense in the consolidated statement of operations.

|12. | Commitments and contingencies:                                                                                                                                                        
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                       
|    | At December 31, 2008, the Company had remaining contractual commitments expected to be paid in 2009 of $1,165 relating to equipment, engineering and construction at the Dolores Mine.
|    |                                                                                                                                                                                       
|    | The Company has also entered into operating leases for office premises that provide for minimum lease payments totaling $95 over the next year, excluding extensions.                 
|    |                                                                                                                                                                                       

21

---

|MINEFINDERS CORPORATION LTD.                                               
|---------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                 
|(Expressed in thousands of United States dollars, except per share amounts)
|Years ended December 31, 2008, 2007 and 2006                               

|13. | United States generally accepted accounting principles:                                                                                                                                                                                                                                                                                                                          
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    | The consolidated financial statements of the Company have been prepared in accordance with Canadian generally accepted accounting principles (Canadian GAAP). These principles differ in some respects from United States generally accepted accounting principles (US GAAP). The effect of such differences on the Company's consolidated financial statements is set out below:
|   
|    | (a)                                                                                                                                                                                                                                                                                                                                                                              
|   
|    |                                                                                                                                                                                                                                                                                                                                                                                  
|   
|    |                                                                                                                                                                                                                                                                                                                                                                                  
|   
|    | (b)                                                                                                                                                                                                                                                                                                                                                                              
|   
|    |                                                                                                                                                                                                                                                                                                                                                                                  
|   

22

---

|MINEFINDERS CORPORATION LTD.                                               
|---------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                 
|(Expressed in thousands of United States dollars, except per share amounts)
|Years ended December 31, 2008, 2007 and 2006                               

|13. | United States generally accepted accounting principles (continued):
|--- | -------------------------------------------------------------------
|   
|    | (b)                                                                
|   
|    |                                                                    
|   
|    | (c)                                                                
|   
|    |                                                                    
|   
|    | (d)                                                                
|   
|    |                                                                    
|   
|    | (e)                                                                
|   
|    |                                                                    
|   
|    |                                                                    
|   

23

---

|MINEFINDERS CORPORATION LTD.                                               
|---------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                 
|(Expressed in thousands of United States dollars, except per share amounts)
|Years ended December 31, 2008, 2007 and 2006                               

|13. | United States generally accepted accounting principles (continued):
|--- | -------------------------------------------------------------------
|    |                                                                    
|    |                                                                    

| | Statements of Operations and Deficit       |   | 2008    |   |   | 2007    |   |   | 2006    |  
| | ------------------------------------------ | - | ------- | - | - | ------- | - | - | ------- | -
| |                                           
| |                                           
| | Net loss per Canadian GAAP                 | $ | (29,120 | ) | $ | (19,204 | ) | $ | (18,192 | )
| | Adjustments related to:                    |   |         |   |   |         |   |   |         |  
| | Sales                                      |   | 2,516   |   |   | -       |   |   | -       |  
| | Cost of sales                              |   | (6,953  | ) |   | -       |   |   | -       |  
| | Convertible notes discount                 |   | 5,399   |   |   | 4,900   |   |   | 792     |  
| | Interest on long-term debt                 |   | 3,441   |   |   | 3,811   |   |   | 731     |  
| | Amortization of deferred financing charges |   | (668    | ) |   | (663    | ) |   | (36     | )
| |                                            |   | 3,735   |   |   | 8,048   |   |   | 1,487   |  
| |                                           
| | Net loss per US GAAP                       |   | (25,385 | ) |   | (11,156 | ) |   | (16,705 | )
| | Foreign exchange adjustment                |   | -       |   |   | -       |   |   | (2,581  | )
| |                                           
| | Comprehensive loss per US GAAP             | $ | (25,385 | ) | $ | (11,156 | ) | $ | (19,286 | )
| |                                           
| | Net loss per share, basic and diluted      | $ | (0.51   | ) | $ | (0.23   | ) | $ | (0.38   | )
| |                                           
| |                                           
| |                                           
| | Balance Sheets                             |   |         |   |   | 2008    |   |   | 2007    |  
| |                                           
| | Assets per Canadian GAAP                   |   |         |   | $ | 271,822 |   | $ | 193,561 |  
| | Adjustments related to:                    |   |         |   |   |         |   |   |         |  
| | Mineral properties                         |   |         |   |   | (14,113 | ) |   | (9,676  | )
| | Capitalized interest                       |   |         |   |   | 7,983   |   |   | 4,542   |  
| | Convertible notes                          |   |         |   |   | 1,994   |   |   | 2,662   |  
| |                                            |   |         |   |   | (4,136  | ) |   | (2,472  | )
| |                                           
| | Assets per US GAAP                         |   |         |   | $ | 267,686 |   | $ | 191,089 |  
| |                                           
| | Liabilities per Canadian GAAP              |   |         |   | $ | 136,016 |   | $ | 66,141  |  
| | Adjustments related to:                    |   |         |   |   |         |   |   |         |  
| | Convertible notes                          |   |         |   |   | 19,636  |   |   | 25,035  |  
| |                                           
| | Liabilities per US GAAP                    |   |         |   | $ | 155,652 |   | $ | 91,176  |  
| |                                           
| | Shareholders equity per Canadian GAAP     |   |         |   | $ | 135,806 |   | $ | 127,420 |  
| | Adjustments related to:                    |   |         |   |   |         |   |   |         |  
| | Mineral properties                         |   |         |   |   | (14,113 | ) |   | (9,676  | )
| | Capitalized interest                       |   |         |   |   | 7,983   |   |   | 4,542   |  
| | Convertible notes and capitalized interest |   |         |   |   | (17,642 | ) |   | (22,373 | )
| |                                            |   |         |   |   | (23,772 | ) |   | (27,507 | )
| |                                           
| | Shareholders equity per US GAAP           |   |         |   | $ | 112,034 |   | $ | 99,913  |  

24

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|MINEFINDERS CORPORATION LTD.                                               
|---------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                 
|(Expressed in thousands of United States dollars, except per share amounts)
|Years ended December 31, 2008, 2007 and 2006                               

|13. | United States generally accepted accounting principles (continued):
|--- | -------------------------------------------------------------------
|   
|    | (f)                                                                
|   
|    |                                                                    
|   

| | **Consolidated summarized statements of operations and****deficit - US GAAP**                                                            |   |          |  
| | ---------------------------------------------------------------------------------------------------------------------------------------- | - | -------- | -
| |                                                                                                                                         
| | Sales                                                                                                                                    | $ | 2,516    |  
| | Cost of sales                                                                                                                            |   | (6,953   | )
| | Mineral exploration expenses                                                                                                             |   | (81,716  | )
| | Administrative and other costs                                                                                                           |   | (47,111  | )
| | Interest income                                                                                                                          |   | 9,405    |  
| |                                                                                                                                         
| | Net loss from inception to December 31, 2008, being the deficit accumulated during the development stage, December 31, 2008              | $ | (123,859 | )
| |                                                                                                                                         
| |                                                                                                                                         
| |                                                                                                                                         
| | **Consolidated summarized statements of cash flows - US****GAAP**                                                                        |   |          |  
| |                                                                                                                                         
| | Cash flows used in operations                                                                                                            | $ | (118,643 | )
| | Cash flows used in investments                                                                                                           |   | (204,290 | )
| | Cash flows used in financing                                                                                                             |   | 343,588  |  
| | Effect of exchange rates on cash and cash equivalents                                                                                    |   | 5,363    |  
| |                                                                                                                                         
| | Cumulative increase in cash and cash equivalents from inception to December 31, 2008, being cash and cash equivalents, December 31, 2008 | $ | 26,018   |  

| | (g) | Income taxes:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    
| |     | Effective January 1, 2007, for US GAAP accounting purposes, the Company has adopted FASB Interpretation No. 48,Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109(FIN 48). FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Interpretation also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The Company did not have any unrecognized tax benefits at December 31, 2008. In addition, no adjustments were recognized for uncertain tax benefits during the year. Accordingly, there is no impact on the Companys December 31, 2008 consolidated financial statements resulting from the application of FIN 48.
| |    
| |     | FIN 48 requires that interest expense and penalties related to unrecognized tax benefits be recognized in the statement of operations. FIN 48 allows recognized interest and penalties to be classified as either income tax expense or another appropriate expense classification. If the Company recognizes interest expense or penalties on future unrecognized tax benefits, they will be classified as income tax expense.                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    

25

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|MINEFINDERS CORPORATION LTD.                                               
|---------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                 
|(Expressed in thousands of United States dollars, except per share amounts)
|Years ended December 31, 2008, 2007 and 2006                               

|13. | United States generally accepted accounting principles (continued):
|--- | -------------------------------------------------------------------
|   
|    | (g)                                                                
|   
|    |                                                                    
|   
|    | (h)                                                                
|   
|    |                                                                    
|   
|    |                                                                    
|   
|    |                                                                    
|   
|    |                                                                    
|   

26

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|MINEFINDERS CORPORATION LTD.                                               
|---------------------------------------------------------------------------
|Notes to Consolidated Financial Statements                                 
|(Expressed in thousands of United States dollars, except per share amounts)
|Years ended December 31, 2008, 2007 and 2006                               

|13. | United States generally accepted accounting principles (continued):
|--- | -------------------------------------------------------------------
|   
|    | (h)                                                                
|   
|    |                                                                    
|   

27

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|MINEFINDERS CORPORATION LTD.                     
|-------------------------------------------------
|Consolidated Schedules of Exploration Costs      
|(Expressed in thousands of United States dollars)
|Years ended December 31, 2008, 2007 and 2006     

|                                           |   | 2008   |   | 2007   |   | 2006  
|------------------------------------------ | - | ------ | - | ------ | - | ------
|                                          
|                                          
|Dolores Mine project:                      |   |        |   |        |   |       
|Assaying and drilling                      | $ | 547    | $ | 2,304  | $ | 1,525 
|Engineering and surveying                  |   | -      |   | 178    |   | 2,019 
|Equipment rental and miscellaneous         |   | 4      |   | 112    |   | 179   
|Licenses and recording fees                |   | -      |   | 5      |   | 1,283 
|Road building                              |   | -      |   | 164    |   | 2,278 
|Technical and professional services        |   | 538    |   | 929    |   | 806   
|Stock-based compensation (note 12)         |   | -      |   | -      |   | 567   
|Other                                      |   | -      |   | 114    |   | 614   
|                                           |   | 1,089  |   | 3,806  |   | 9,271 
|                                          
|Other properties:                          |   |        |   |        |   |       
|Assaying and drilling                      |   | 2,436  |   | 2,104  |   | 1,395 
|Engineering and surveying                  |   | 97     |   | 12     |   | 121   
|Equipment rentals and miscellaneous        |   | 88     |   | 352    |   | 196   
|Licenses and recording fees                |   | 522    |   | 303    |   | 252   
|Road building                              |   | 1      |   | -      |   | 75    
|Technical and professional services        |   | 980    |   | 564    |   | 541   
|Stock-based compensation (note 12)         |   | 757    |   | 857    |   | 436   
|Other                                      |   | 224    |   | 261    |   | 485   
|                                           |   | 5,105  |   | 4,453  |   | 3,501 
|                                          
|Exploration costs incurred during the year |   | 6,194  |   | 8,259  |   | 12,772
|                                          
|Cumulative balance, beginning of year      |   | 65,539 |   | 57,280 |   | 44,508
|                                          
|Cumulative balance, end of year            | $ | 71,733 | $ | 65,539 | $ | 57,280

28

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