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Jul 2011 - Silver Lake Res

Silver Lake Resources Limited (SLR) – Unravelling the Secrets behind the Formation of the Gold Mineralisation at SLR's Mount Monger as Production heads towards ~250,000ozpa by 2014.

  • Silver Lake Resources (SLR) became oversold, falling from $2.20 per share to ~$1.60 mostly by a fund offloading ~8.5m shares to meet a redemption, and the price subsequently recovered back up to $2.20/share. There are many examples of the damage done to share prices by fund redemption sales, and the share's later price recovery.
  • SLR's market cap consequently fell below $300m, but SLR still appears to be on-track to achieve a production target of >250,000ozpa by 2014. It may be able to reach 300,000ozpa (the level of the A$1bn market cap companies) depending on the average underground grades and annual treatment rates at Mt Monger, with the recent spectacular intersection of 17.6m @ 23.6g/t in Daisy Deeps, possibly inferring that our ~7g/t grades are too low.
  • SLR’s Mt Monger operation has been founded on the ~200ktpa, 50,000ozpa to 70,000ozpa Daisy Milano lode that appears capable of supporting the mine for at least another 10 years. The recent completion of the new ventilation shaft enables production from the Daisy Milano mine to increase from 250ktpa to 400ktpa (on 50% of the vent fan's capacity), by stoping the pre-developed parallel Daisy East lode, through the current ball mill. SLR also announced it expects to be developing Haoma in July 2011 as its possible 3rd source
  • SLR has been in a "chicken and egg" situation, needing to establish multiple ore sources, before it could justify expanding its Lakewood plant, and to do that also needed sufficient tailings dam capacity (also now done to ~700ktpa), and hence the Stage 1 expansion using one of the mills from Tarmoola can increase treatment to 700ktpa, which is expected to be achieved in Dec Qtr 2011.
  • This is expected to be followed by the Stage 2 expansion to ~1mtpa (there are a number of potential ore sources), but which needs an additional tailings dam to be constructed (already delineated and designed) and then the expansion granted, with production expected ~SQ 2012, and taking production up into the 150,000ozpa to 200,000ozpa area.
  • And then there's SLR's second operation (being the Murchison) which appears to be on-track for approval by Dec 2011 / Jan 2012, with construction during 2012 and production ramping up to an expected 1.2mtpa and ~100,000ozpa rate during the 1st Half of 2013, and hence SLR then possibly realising ~250,000ozpa from 2014.

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Jul 2011 - Silver Lake Res

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  • Written by: Keith Goode
  • Friday, 01 July 2011