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Silver Lake Resources Grows Gold Resource Base To 3.6moz, Strong Potential To Increase Further

Silver Lake Resources (ASX: SLR) has delivered a 10% increase to its high grade gold JORC Resource inventory which now totals 27.3 million tonnes at 4 grams per tonne (g/t) for 3.6 million ounces of gold.

The Mount Monger Resource has increased to 6.8 million tonnes at 7.8g/t for 1.7 million ounces of gold on a 100% increase in the Resource at the Haoma orebody to 465,000 ounces.

What is significant about the Resource at Mount Monger is 1.1 million ounces, or 66% of the total Resource, is in the higher confidence Measured and Indicated categories.

Also, importantly, more than 1.3 million ounces is accessible from existing infrastructure.

Meanwhile, the Murchison operations now host a total Resource of 20.6 million tonnes at 2.8g/t for 1.9 million ounces, with 880,000 ounces in the Measured and Indicated categories.

Silver Lake increased the Resource at the Tuckabianna underground deposits to 460,000 ounces, a 48% increase from the June 2011 inventory.

This latest Resource inventory was calculated after allowing for the previous six months mining depletion of 48,898 ounces from the Mount Monger Operations and the sale of the Rothsay project in August 2011, which contained 132,900 ounces.

Silver Lake has committed a massive $18 million to its annual exploration budget and currently has multiple drill rigs active at Mount Monger and in the Murchison.

Managing director Les Davis told Proactive Investors today Silver Lake is one of the most active explorers in Western Australia.

"We have a long term commitment to exploration, spending $18 million per annum across our Mount Monger and Murchison operations," he said.

"This commitment has seen our resource base grow from 830,000 ounces four years ago to 3.6 million ounces today.

"Based on our exploration success to date and our commitment to ongoing exploration, the potential to further increase our resource base is positive."

At Mount Monger, Silver Lake is focusing on the delineation of resources located within 600 metres to the east and west of the Daisy Milano infrastructure, as well as step out drilling in the Wombola area.

In the Murchison, the focus is on extending strike and depth extensions to resources at the planned Tuckabianna West and Caustons underground deposits.

Also, infill drilling is in progress at the Pinnacles deposit to determine the potential for a fifth underground mine in the Murchison.

The June 2012 JORC Resource inventory is expected to be announced in the September quarter.

Major gold player

Silver Lake, which is developing into a major Western Australian gold player, is set to begin production from the Wombola pit this month.

The Wombola pit is part of the broader Mount Monger Operations, where the company is forecasting that production will be ramped up to 200,000 gold ounces annually from 2014.

Production is currently being sourced from four independent underground mines accessed from the same infrastructure, being; Daisy Milano, Daisy East, Rosemary and Haoma, which are located around 50 kilometres from Kalgoorlie.

Open pit production is also being sourced from Wombola Dam starter pit.