The metal wouldn't melt any more than any other piece of metal would melt, because you aren't heating the surface of the metal.
But you are heating the air inside of it, which touches the metal. So eventually, yes, this will melt it, seeing as how most metals used for mirrors in the dwarves time frame have fairly low melting points. In 1400, they did not have the knowledge or tools to create something precise enough to reach those temperatures. Also, metals are good conductors of heat (so a lot heat would radiate through the metal mirrors) , whereas glass is not, meaning glass would be more effective at focusing the heat (assuming it could be made properly, which they couldn't back then).
I should also point out that it is only 1000 watts per directly exposed square meter (big space), which is frequently unavailable in certain climates. There's still quite a lot, just not quite so much as it would initially appear.
(This is still not dwarven tech level appropriate but I feel the need to comment)
Do cars melt? Do mirrors outside melt? The mirrors themselves do not get hot, they reflect the infrared rays onto a focal point but themselves do not get hot.
It is the place focused on that has to be able to take the heat. This would have to be made out of high temprature ceramics and such (even then it might not be able to take the heat) If the focus point is 20 feet from the mirrors themselves or more the mirrors would feel no heat from the air, and would themselves not get hot.
Polished metals like silver and gold do an excellent job of reflecting infrared, so in theory they could build the mirrors.
The watts per meter isnt really too much of an issue, you only need maybe 750 watts to melt metal if it is focused at all, heck you could melt lead with a really well focused 50 watts, and with mirrors you can get far above a single square meter.
The only issue holding dwarves back that I can see would be the inability to create perfectly flat mirrors.
If they could make perfectly flat mirrors they could do this.. BUT it is far out of their tech level to do so.
I don't quite think you are quite getting what a solar furnace is so here have a look. See how the mirrors are not the part that gets hot. It is the place the light is focused to.
Here is another image of a solar furnace in operation See how the mirrors are about 10 meters (30+ feet) from the focus point.
*Still feasibility aside, this IS NOT period appropriate. Certainly not for dwarves who hole up in mountains.