Proactive Investor's  Instablog

Silver Lake Resources (ASX: SLR) has taken another integral step towards bringing the Murchison Gold Project in Western Australia into operation in March 2013 with the 250 person camp now operational.

Cue Village in the town of Cue will provide accommodation and catering for the processing facility construction crews and operational workforce.

Silver Lake, the Shire of Cue and NT Link had negotiated and agreed to build the camp, which is expected to enhance socio-economic benefits to the community for years to come.

NT Link build the camp and will also operate it.

Murchison operations

Silver Lake is developing a second gold mining operation in the Murchison region, with multiple mines to feed a central processing facility.

The Murchison Project comprises the Comet, Tuckabianna and Moyagee projects and has a JORC resource of 20.6 million tonnes at a grade of 2.8g/t, for a total 1.9 million ounces of gold.

This resource excludes the Hollandaire deposit, which had earlier this month received a maiden 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%.

The company plans to source ore from 14 open pit and four underground mines.

All of the planned open pit ore sources have been drilled out, with Silver Lake now focused on extending resources, particularly below 100 metres depth at the underground mine level.

Mining at the Pinnacles deposit in Comet is expected to begin in the September quarter of 2012 in preparation for mill feed.

Gold production is targeted for the March quarter of 2013, ramping up to 100,000 ounces per annum in 2014.

Hollandaire could enhance the overall economics of the project by generating modest capital with the addition of a copper grinding circuit and flotation devices at the mill to process the copper in addition to the gold.

It 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.

Gold producer

Silver Lake had earlier this month reached a production milestone at the Mount Monger Operations, producing the first 250,000 ounces of gold bullion.

This was achieved through the processing of 1.3 million tonnes of ore at a blended grade of 6.4 grams per tonne gold from underground and open pit feed sources.

A blended metallurgical recovery rate of 93.5% was achieved. Ore from Mount Monger is processed through Silver Lake's Lakewood Gold Processing Facility.

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