Silver Lake Resources Limited (SLR) –Taking the next step to producing >70,000ozpa

• Silver Lake Resources (SLR) has achieved its production target of 50,000ozpa at its Daisy-Milano operation at Mount Monger in WA, currently producing a steady ~1,000oz per week with the occasional 1,500oz week. With the Christmas Flats open-cut expected to start in July 2009 and the probable expansion with an additional 300,000tpa mill at its Lakewood plant, SLR’s gold production appears to be moving into the next phase, taking production beyond 70,000ozpa.
• SLR still appears to be on-track to achieve its 2011 production target of 150,000ozpa, possibly by 70,000ozpa to 100,000ozpa (or so) from Mount Monger & 50,000ozpa from its Murchison Project at Moyagee/Comet/Tuckabianna. Currently SLR is examining its milling opportunities at Murchison, ranging from toll-treating to having its own initially 500,000tpa to 600,000tpa mill (doubling to 1.2mtpa later).
• Due to SLR’s current total cash costs of ~A$600/oz to A$700/oz, Silver Lake is generating significant cashflow at current gold prices >A$1,000/oz of ~A$1m to A$2m per month (its best week so far was selling 1,550oz at A$1,550/oz). This is increasingly enabling SLR to build up a war-chest capable of financing a mill expansion at Lakewood, start its Murchison operation & remain debt & hedge-free.
• In fact in the June Qtr of 2009, SLR may have recouped its ~A$13m acquisition cost of Daisy-Milano from Perilya and the acquisition of the Lakewood plant, just over a year since first production in April 2008 (which itself was only ~6 months from the acquisition from Perilya & subsequent listing of SLR in November 2007).
• The Daisy-Milano orebody is shaping up to be a dream orebody, with ~400m on strike of almost continuous gold mineralisation. The recent delineation of Daisy-Milano on strike at the 8 Level infers a significant increase in resources, and visible nuggetty gold is becoming common with grades in oz/t or even kg/t.

Avoca Resources Limited (AVO) –Moving into the 2nd Phase, targeting production of 150,000ozpa to 190,000ozpa for at least 10 years

• Avoca has been advancing at a fast pace since discovering Trident in 2005 establishing sufficient ore (by June 2006), dewatering the Poseidon South open-cut and old workings by July 2007, start production, building and commissioning a plant within a year (by July 2008). And then producing ~130,000oz by June 2009.
• Avoca has established that its 1mtpa rated plant is capable of treating ~1.25mtpa (and probably ~1.5mtpa with minor modifications) mainly due to the gravity circuit achieving ~60% of the recovery (double that expected). Which has paved the way for AVO to move into the 2nd Phase, bringing the satellites on stream such as Fairplay, Chalice, Two Boys, & Vine etc, and hence taking production into a targeted range of 150,000ozpa to 190,000ozpa for at least 10 years.
• Avoca has given guidance of 190,000oz production for the coming year to June 2010, based on treating 1mt @ ~5.8g/t from Trident with a recovery ~97% for ~180,000oz at a cash cost of ~A$440/oz, and processing ~270,000t of low grade ~1.2g/t ore at a ~95% recovery for ~10,000oz at a cash cost of ~A$684/oz. However, the average Trident grade appears capable of being between 6.3g/t & 7.0g/t, and Fairplay may start production at ~2.0g/t possibly by January 2010.
• The near vertical high grade Athena veins appear to be the mainstay of the Trident mine (blowing out periodically into the Western Zone) and becoming enhanced into bonanza grades when they are intersected by some of the high grade eastern flats (such as Eos) on the 1005 Level which has raised the average mine grade from ~3g/t to ~4g/t, up to ~6g/t.
• AVO has submitted a revised takeover offer for Dioro of 1 AVO – for – 2.3 DIO (which has now been unanimously accepted by Dioro’s directors) as part of the 3rd phase strategy to increase production to ~250,000ozpa (although it appears likely to require up to two years to identify the underlying capability of the DIO assets). Avoca has a long-term stated target of becoming a 500,000ozpa producer.

NQM Limited (NQM) – Aiming to IncreasePajingo’s Gold operations to >100,000ozpa

• Formed largely of ex-Normandy personnel, the management and advisers of North Queensland Metals (NQM) Ltd envisage applying their expertise to build NQM into a major 300,000ozpa to 500,000ozpa gold producer through exploration and the acquisition of overlooked/defunct/brownfields and recognised operating mines.
• NQM’s current main operating asset is a 60% holding in the Pajingo Gold Mine in Queensland (Heemskirk [HSK] have the other 40%). The Pajingo mine is expected to potentially build up from underground and open-cuts to production of >100,000ozpa with Dotswood by the end of 2010, increase with Twin Hills to >120,000ozpa from early 2012, and head towards 140,000ozpa by mid-2012
• Its heyday was in about 2003, after the takeover by Newmont of Normandy with high grades and wide stopes, and an expanded plant (originally for the low grade stockpiles) capable of treating ~800,000tpa. Pajingo was then producing ~300,000ozpa at cash costs of <US$100/oz at a treatment rate of only ~700,000tpa. In January 2008, NQM took it over from NEM, and reduced its throughput to ~300,000tpa, on the currently thinner ore zones, with an expected life of > 5years.
• To fill the Pajingo plant, NQM has initially focused on two satellites, Dotswood and Twin Hills. Dotswood (previously called Far Fanning) is located NE ~180km by road from Pajingo and contains a high grade core of ~4g/t with a lower grade halo and surrounding mineralised quartz vein structures. The current expectation is production of ~60,000oz to 70,000oz over 2 years from open-cuts at Dotswood.
• The second operation, is the old Twin Hills underground mine of BMA gold ~190km S of Pajingo that started with high expectations, but closed after ~1 year. NQM have re-interpreted the abundant gold mineralisation as a series of flats and stacked lodes, more closely resembling a stockwork with high grade shoots, lending itself to an open-cut and later underground mining concept.