Silver Lake (ASX: SLR) achieves annual sales guidance for nine consecutive years. Will it sustain?

Highlights

• Silver Lake is a gold production and exploration company with operations in western Australia and Ontario, Canada
• Backed by June quarterly performance, SLR achieved its sales guidance for the financial year 2023
• In FY24, the company is expected to direct AUD 28 million towards Sugar Zone operation

Silver Lake Resources Limited (ASX:SLR) is an intermediate gold producer with cash flow generation and production from two assets in Western Australia and one in Ontario, Canada. The company manages three projects – Mount Monger Operation, Deflector Operation and Sugar Zone.

The company has delivered its annual sales guidance for the ninth consecutive year. In the financial year 2023 (FY23), SLR achieved its sales guidance with the sale of 260,372 ounces of gold and 1,325 tonnes of copper. The June quarter performance backed the yearly sales.

In June 2023 quarter, gold sales volume was 83,540 ounces at an average sales price of AUD 2,874/oz and copper sales volume was 606 tonnes at an AISC of AUD 1,598/oz. Gold production was 81,616 ounces during the reported period, and copper production was 642 tonnes.

Financial insights

In the first half of FY23, SLR’s revenue dropped by 4.9% year-on-year to AUD 292.6 million, driven by an 8.6% year-on-year fall in gold sales during the reported period. However, the company witnessed a 4% year-on-year jump in realised gold prices.

During the 1HFY23, EBITDA was AUD 73.1 million, 53.6% lower than the previous corresponding period.

Here’s the historical financial trend of SLR -

Top 10 shareholders of SLR

The top 10 shareholders of Silver Lake together have around 34.05% stake in the company, and the top four shareholders have a 23% stake. The top two shareholders of SLR are Van Eck Associates Corporation and Dimensional Fund Advisors, L.P., with ~10.61% and ~5.02% shareholding, respectively.

Outlook

In FY23, the company expects to meet its AISC  guidance range of AUD 1,950 – 2,050 per ounce. In FY24, SLR expects Australian operations to report gold sales of 210,000 to 230,000 ounces at an AISC of AUD 1,850 – 2,050 per ounce.

For FY24, the group exploration budget is AUD 43 million, of which AUD 28 million is planned for the Sugar Zone operation.  

Share performance of SLR

SLR shares closed 5.06% higher at AUD 0.935 on 1 August 2023, with a market capitalisation of AUD 827.47 million. Including today’s gain, SLR share price decreased by 34.39% in the last one year and in last six months, it has dropped by 28.07%.

The 52-week high of SLR is AUD 1.56 per share, recorded on 9 August 2022, and the 52-week low is AUD 0.845 per share, recorded on 31 July 2032. Worth mentioning here is that the existing share price is 40.06% lower than the 52-week high and 10.65% higher than the 52-week low.

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, and currency, is 1 August 2023. The reference data in this report has been partly sourced from EODHD/Others.

Disclaimer

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