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Silver Lake Resources intercepts high grade gold at 5.2Mt Mount Monger operations

Silver Lake Resources (ASX: SLR) has intercepted high grade gold at the Mount Monger operations in a bid to increase production to 20,000 ounces per year by 2014.

Mount Monger has a current JORC Resource of 5.1 million tonnes at 8.9g/t gold for a total 1.5 million ounces of gold.

Production is sourced from four independent underground mines accessed from the same infrastructure; Daisy Milano, Daisy East, Rosemary and Haoma; along with open pit production from Wombola Dam.

A diamond drilling campaign has been undertaken at Haoma, with extensional drilling returning strong intercepts of:

- 1.1 metres at 93.3g/t gold;
- 1 metre at 86g/t gold; and
- 3.4 metres at 18.9g/t gold.

Meanwhile, results from infill drilling at Haoma included:

- 1.4 metres at 18.4g/t gold;
- 1 metre at 17.6g/t gold; and
- 0.2 metres at 83.9g/t gold.

Silver Lake also undertook exploration drilling at Haoma West, located about 60 metres west of Haoma.

Diamond drilling to date indicates that Haoma West consists of multiple high grade structures within a 40 metre lateral envelope, with all structures remaining open along strike and up and down plunge, both north and west of the dolerite dyke.

Intercepts at Haoma West included:

- 5.6 metres at 16.4g/t gold;
- 1.3 metres at 40.2g/t gold; and
- 1.2 metres at 16.7g/t gold.

Silver Lake managing director Les Davis said that, while it was early days for Haoma West, the initial high grade results were encouraging.

“Based on the current resource, ongoing exploration results and mined grades from ore development to date, Haoma is showing the potential to be a Daisy Milano style deposit,” Davis said.

“We recently mobilised a second jumbo to site to accelerate mine development to multiple levels at Haoma and Haoma West.”

The initial stages of the expansion at Mount Monger are progressing to plan, with the Lakewood Gold Processing Facility on track to expand to 700,000 tonnes per annum in December 2011, and to 1 million tonnes per annum in the September quarter of 2012.