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Silver Lake Resources Provides Construction Update On Murchison Gold Project

Silver Lake Resources (ASX: SLR) has provided an update on construction and commissioning activities at the Murchison gold project in Western Australia.

The company previously engaged project management, engineering, procurement and construction services contractor Pacer Corporation, a subsidiary of Resource Development Group (ASX: RDG) in December 2011 to carry out project management and EPC services for the Murchison gold plant.

On 4 April 2013, Pacer and Silver Lake entered into a commercial dispute regarding a number of matters under the EPC contract.

Pacer and Silver Lake have now entered into a confidential agreement that resolves this dispute.

Silver Lake previously announced the budget total for milling and surface infrastructure was $65 to $70 million through to first gold production.

The company now estimates that the final cost to complete, post settling the dispute with Pacer and costs to complete the gold room will be $91 million.

The tying in of the gravity circuit to the process flow and construction of the gold room is nearing completion with commissioning commencing in about two weeks.

Silver Lake recently increased gold production to a total of 43,760 gold ounces across its Western Australian operations for the March 2013 quarter, a 68% increase on December 2012 quarter production.

Commercial production from the Murchison Gold Project is expected to be declared in the June 2013 quarter.

Silver Lake's strategy was to achieve gold production by commissioning the crushing, grinding and CIL circuits and producing gold on carbon for offsite processing.

The crushing circuit is capable of producing 2 million tonnes per annum and has been running at this rate consistently.

Additionally, the ball mill has been operating at name plate capacity of 1.2 million tonnes per annum since mid-March 2013.

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