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  • Silver Lake Resources Begins Optimisation Of Mount Monger Operations  0 comments
    Jan 16, 2013 7:33 PM

    Silver Lake Resources (ASX: SLR) has begun the process of optimising the combined Mount Monger projects to extract maximum production and value from the operations following the completion of the merger with Integra Mining.

    The merger of the two companies is expected to deliver operational and corporate synergies of $30 to $40 million per annum.

    These synergies flow from the proximity of the operating mines, processing plants and tenement holdings at the combined Mount Monger Operations in the Eastern Goldfields of Western Australia.

    The combined company has a 6.6 million ounce Resource base and forecast production of over 400,000 ounces per annum in 2014.

    It also has Reserves of 1.8 million ounces, mill capacity of 3.4 million tonnes per annum in the 2013 financial year and a landholding of 5,000 square kilometres.

    Optimisation process

    As part of the optimisation process Silver Lake is considering a range of options, including:

    - The treatment of high and low grade ore sources through the Lakewood and Randalls mills;
    - Expanding Randalls mill which could be fed from multiple open pit and underground ore sources;
    - Sharing mains power allotments;
    - Realising operational efficiencies through shared technical services providers and consolidating corporate activities; and
    - Optimising overall exploration expenditure through a more targeted program across the expanded tenement package.

    Silver Lake expects the results of the optimisation for the combined Mount Monger project pipeline to be announced in the June 2013 quarter.

    Integration progress

    The integration of Integra's operational personnel into the Mount Monger Operations has gone smoothly.

    Currently, production to the Lakewood and Randalls mills is being sourced from the underground operations, Maxwells open pit and the drawing down of large surface stockpiles containing about 98,000 ounces of gold as of December 2012.

    As part of the operational and corporate synergies significant progress has already been made, including:

    - The resignation of Integra directors effective 1 January 2013 and requested delisting of Integra from the ASX on 14 January 2013.

    The closing of the Integra corporate office and integration of required Integra employees into Silver Lake's corporate office is also well advanced. These savings are expected to be about $5 million per annum.

    - Following a thorough review of the operational and exploration requirements for the combined Mount Monger/Randalls Operations, 24 positions were made redundant resulting in a saving of $3.5 million per annum.

    - A review and prioritisation of the Mount Monger/Randalls/Aldiss projects has resulted in a reduction in exploration expenditure per annum from a previously combined total of $33 million down to $18 million.

    - Discussions with service providers have begun to install mains power to the underground operations at Mount Monger, replacing the current diesel generators.

    This requires an upgrade to the feeder system in Kalgoorlie Boulder. Costs and timelines to complete the scope of work are in progress.

    Once completed the estimated cost saving is $3-$4 million per annum.

    - Corporate systems are being integrated and this process has been simplified by accounting for Integra as a wholly owned subsidiary from 1 January 2013.

    - Integra's banking facilities are being terminated and replaced with Silver Lake's recently announced $75 million facilities.

    - Silver Lake's website ( is in the process of being updated and contains a link on the home page to Integra's website that contains all of the historic information prior to January 2013.

    Further operational reviews are underway and will be announced as the integration and optimisation processes progress.

    Gold sales

    Pro-forma gold sales for the December 2012 quarter from the combined Mount Monger Operations were 45,495 ounces (Silver Lake - 28,123 ounces and Integra - 17,372 ounces) with carryover bullion on hand totalling 4,764 ounces.

    Month end processes are being finalised and the detailed quarterly activities report will be released later this month.

    Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX "Small and Mid-cap" stocks with distribution in Australia, UK, North America and Hong Kong / China.

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