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.