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Silver Lake Resources Marks Record Quarterly Gold Production

Silver Lake Resources (ASX: SLR) has produced a record 61,152 ounces of gold in the quarter ending 31 December 2013 due to higher mined grade at its Mount Monger operations in Western Australia.

Gold sales for the quarter totalled 62,265 ounces, up from 60,910 ounces in the previous quarter, generating revenue of $85.3 million and operating cashflow of $14 million.

The company sold its gold at an average realised price of $1,371 ounces per ounce.

The company has increased its guidance to 205,000 ounces to 220,000 ounces of gold from the previous 180,000 ounces to 200,000 ounces of gold.

It has $17 million in gold and cash on hand and has reduced its debt to $8 million from $20 million.

Mount Monger

Operations at the company's Mount Monger operations were the major contributor to production in the December 2013 quarter with gold sales of 49,120 ounces compared to 47,457 ounces in the September 2013 quarter.

Unaudited all in sustaining cash costs were $1,002 per ounce compared to $1,030 per ounce in the previous quarter.

The Lakewood & Randalls mills will continue to be fed with underground ore from the Daisy Complex and small quantities of ore from Cock-eyed Bob, open pit ore from the Maxwells deposit and continued processing of surface stockpiles.

Ore mined for the quarter totalled 105,562 tonnes to produce 22,742 ounces of gold from its underground operations and 200,078 tonnes for 16,344 ounces of gold for the open pit.

Silver Lake noted a key part of its strategy at the Randalls area is to unlock the potential of the Banded Iron Formation (NYSE:BIF) deposits.

The BIF host rock at Randalls covers an area of over 30 kilometres and the gold distribution along the BIF contains limited historic drilling with highly encouraging results.

While this requires further interpretation, it has the potential to host large gold deposits similar to the Santa, Maxwells & Cock-eyed Bob deposits.

Ore development is continuing at the Cock-eyed Bob underground mine to obtain additional geological knowledge of BIF deposits in the region.

Ore development in December 2013 on the 396 level has returned highly encouraging results with some diluted face grades averaging >10 g/t gold and >1.0 ounce per tonne.

Ore driving to date has shown that the highest grade sections of the deposit occur the same as Daisy Milano where the mineralisation contains sulphide rich rock such as pyrrhotite.

The company added that at its open pit operations, the latest grade control drilling program has the Maxwells open pit continuing until May 2014 at which time infill drilling will commence for underground mine planning purposes.

Guidance for Mount Monger Operations has been increased to 160,000 ounces to 170,000 ounces of gold from 120,000 ounces to 130,000 ounces of gold.

Murchison Gold Operations

Quarterly gold sales from the Murchison Gold Operations totalled 13,146 ounces with unaudited all in sustaining cash costs of $2,042 per ounce.

The fall in gold price in mid-2013 resulted in the deferment of capital required for underground mining and hence access to higher grade ore. Notwithstanding efforts to date to produce ore from open pit sources only and conserve cash, the unit costs remain high due to lower grades.

Guidance for the Murchison Gold Operations has been reduced to 45,000 ounces to 50,000 ounces of gold from 60,000 ounces to 70,000 ounces of gold

This guidance may change subject to the outcome of the full strategic review that is in progress. Results of the review will be announced in the March 2014 quarterly report.


There were a number of pleasing metrics for the quarter including record production, increased production guidance and the reduction in debt.

Remaining bank debt will be fully repaid by 28 February 2014 owing to strong operating cashflows. There is also a full strategic review of the operation is in progress and the results of the review will be announced in the March 2014 quarterly report.

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