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Silver Lake Resources Set For Maiden Gold Pour This Week In The Murchison

Silver Lake Resources (ASX: SLR) is on the cusp of first production at its second gold mining operation in Western Australia, with the first gold pour at the Murchison Gold Project on track for the end of this week.

The 10.2 megawatt diesel fired power plant is fully commissioned with all six generators online and available for use.

The average power demand required to operate the crushing and milling circuit is 7.5 megawatts.

Meanwhile, crushing capacity exceeds required milling rates with the crushing circuit capable of producing 250 tonnes per hour.

The circuit has been running at this rate consistently since commissioning was completed.

The name plate capacity of the 2.9 megawatt, 1.2 million tonne per annum ball mill is 135 tonnes per hour.

The crushing circuit is designed to allow the installation of a second tertiary cone crusher to increase throughput to feed a potential base metals grinding and recovery circuit.

The ball mill has been operating at 100 to 105 tonnes per hour since wet commissioning began.

The main mill components have operated without issue and throughput rates will be steadily increased to name plate capacity of 135 tonnes per hour in the coming weeks.

The mill was commissioned on low grade ore of 1 gram per tonne (g/t) gold, and is currently being fed a blended grade of 2g/t gold from the Genesis open pit and stockpiled ore stocks.

The carbon in leach circuit is operating as expected with gold in circuit stocks building.

The first carbon strip will commence mid this week followed by the maiden gold pour at the end of this week.

Plant assays received to date indicate metallurgical recoveries of 94%.

The gravity circuit is not yet tied into the process flow and will be tied in and commissioned next month.

The remaining construction requirements for the processing facility are being completed concurrently with the commissioning activities.

Following practical completion the project will be handed over to the operations team who will progressively transition from commissioning to full scale operations.

Second gold mining operation

The Murchison Gold Project comprises multiple mines feeding a central processing facility.

The project has a current resource of 20.5 million tonnes at 2.9 grams per tonne for 1.9 million contained ounces of gold.

The base case production plan has ore being sourced from 14 open pit and four underground mines at various stages over an eight to 10 year mine life.

The design of the gold processing facility has made allowance for the later addition of a base metals grinding and recovery circuit.


Proactive Investor's view is the retracement in share price has been overdone. Silver Lake remains debt free and has 10,229 ounces forward sold at $1,364 per ounce to deliver in the March 2013 quarter to close out the hedge book that came with the Integra transaction.

Current prices around $2.35 afford the value investor an opportunity to acquire a company at well below its intrinsic and fair value.

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