Silver Lake Resources Limited (ASX: SLR) is into exploration and production of gold with its core asset, Mount Monger Gold Camp in Western Australia. The camp is located approximately fifty kilometres south-east of Kalgoorlie in the prolific Eastern Goldfields district of Western Australia. The asset produced ~158,000 ounces of gold in FY18 and has a demonstrated history of replacement in reserve and discovery.
The company today on 27 February 2019, has announced its financial results for 1HFY19.
The revenue of the company went up by 4.0% on 1H FY18. Revenue for the period amounted to $119.8 million from the sale of 69,947 ounces of gold at an average realised price of A$1,713/oz compared to revenue of $114.7 million from the sale of 68,704 ounces of gold at a price of A$1,662/oz in1H FY18.
The cost of sales stood at $106.6 million in 1HFY19 which was broadly in line with 1H FY18 number of $105.5 million. The main changes in the cost of sales compared to the prior corresponding period include lower depreciation & amortisation of $18.1 million, with significant operating costs involving Cock-eyed Bob with the mine achieving its target production rates during the period. The inventory expense of $5.6 million which includes a net $1.1 million ore stock draw and a $4.5 million reduction in bullion on hand over the six months, also impacted the cost of sales.
The company reported All in Sustaining Cost (AISC) of A$1,467/oz which is consistent with guidance, and the reflects non-cash inventory adjustments and treatment of lower grade material during the period. The net profit after tax stood at $4.0 million, up by 88% from the period of 1H FY18. The operating cash flow for the period stood at $29.7 million which was broadly in line with the prior corresponding period number of $30.1 million.
The company primarily channelled its growth capex towards the Aldiss Mining Centre with an investment of $17.5 million in the development of the Aldiss Mining Centre and stripping of the Harrys Hill open pit. The company spent $5.6 million on exploration during the period and tracking in line with the FY19 budget of $12 million.
The cash and bullion position of the company at 31 December 2018 stood at $104.3 million and remained consistent with the 30 June 2018 balance of $105.7 million, despite the significant growth capital and exploration investment during the period. The company also remained debt-free during the period. It is on track to meet the FY19 guidance for gold sales of 140,000 to 150,000 at an AISC of A$1,350-A$1,390/oz.
On the price-performance front, the stock of Silver Lake Resources Limited last traded at $0.700 with a decrease of ~5.405% during the day’s trade and with a market capitalisation of $375.89 million. The stock has generated a YTD return of 33.33% and posted returns of 49.49% and 51.02% over the last six months and three months period. It has a 52-week high price of $0.740 and a 52-week low price of $0.342 with an average trading volume of ~1.87 million. It is trading at PE multiple of 23.05x with an EPS of AUD 0.032.
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