Proactive Investor's  Instablog

Silver Lake Resources (ASX: SLR) is adding value to its Murchison Gold Project through the delivery of a high grade maiden copper-gold resource at its Hollandaire deposit, with the potential for the copper to also be processed through the existing mill just 4 kilometres away.

The company has defined an initial Inferred JORC Resource of 1.1 million tonnes at 2.4% copper, 0.5 grams per tonne (g/t) gold and 13g/t silver, with around 78% of the copper Resource averaging 4%.

Importantly, this is just the start with a further Resource upgrade expected once all assays from the 50-hole drilling program have been received.

Les Davis, managing director, told Proactive Investors today the Hollandaire deposit could generate modest capital for the company with the addition of a copper grinding circuit and flotation devices at the mill to process the copper in addition to the gold.

"It really enhances the overall economics of the Murchison Projects, particularly on gold, because simplistically for every $30 million worth of margin that the copper can bring to the Murchison Gold Project, it reduces your total cash cost up there by $300 an ounce. That's pretty significant."

Further economic upside lies in the discovery of a gold blanket of mineralisation in the upper 50 metres of the deposit, above the copper resource.

"When you go to open pit this copper resource you're going to have basically a cash positive pre-strip because of the gold content in the upper sort of 50 metres of the area," Davis said.

So far, Silver Lake looks to have a copper resource located 50 vertical metres from the surface with an average thickness of 10 metres and some 50 metre thick zones.

Demonstrating the broad, high grade intersections being delivered, previous assays include 50 metres at 1.4% copper from 50 metres; 10 metres at 6.1% copper, 1.2g/t gold and 13.6g/t silver from 86 metres, 5 metres at 1.6% copper from 200 metres and 9 metres at 1% copper from 54 metres.

The mineralisation remains open to the southwest and at depth.

The Hollandaire deposit could begin production as an open pit gold mine, followed by an open pit copper mine with gold and silver credits followed by an underground operation.

Extensive exploration

Silver Lake has begun a $20 million exploration program within the Eelya Complex, which hosts the Hollandaire deposit.

At Hollandaire, the company has so far completed 29 reverse circulation and 21 diamond holes, with 44 extensional holes drilled outside of the current resource, since drilling recommenced at the deposit in late March.

This extensional drilling program has substantially increased the mineralised area to 500 metres by 300 metres with varying thickness from 4 to 50 metres.

Major gold player

Silver Lake is developing into a major Western Australian gold player with three large gold projects - the 1.7 million ounce Mount Monger project, the 1.9 million ounce Murchison project and the 1 million ounce Great Southern project.

The company's goal is to define a major gold Resource of 10 million ounces over time at the three projects.

Proactive Investors is a market leader in the investment news space, providing ASX "Small and Mid-cap" company news, research reports, StockTube videos and One2One Investor Forums.