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Highlights
- Silver Lake Resources records solid production results in the December quarter.
- SLR’s operating performance in H1-22 positions it well on track to FY22 guidance.
- Despite this, SLR share price plunges more than 12% on the ASX.
ASX-Listed gold producer and explorer company- Silver Lake Resources Limited (ASX:SLR) shares have shed 12.090%, trading at AU$1.472 each, at 2:00 PM AEDT. SLR claims to have delivered good production numbers in the December quarter, making its first half performance aligned to achieving FY22 guidance. However, SLR shares remain unaffected by the numbers and continue to extend losses on the ASX.
How has Silver Lake’s December quarter been?
- SLR claims to have delivered solid quarterly production numbers.
- In the December quarter, SLR’s produced 65,148 ounces of gold equivalent, touching sales of 62,549 ounces of gold and 239 tonnes of copper. The sales price for SLR’s gold was AU$2,436/oz compared to an ASIC (All-In Sustaining Cost) of AU$1,633/oz.
- The quarterly numbers resulted in the first half production reaching 131,274 ounces gold equivalent, taking sales to 124,600 ounces gold and 451 tonnes of copper. The selling price for gold is AU$2,418/oz for an ASIC of AU$1,597/oz.
- SLR’s production numbers at Deflector are again at a record level, contributing to a significant increase in ore stockpiles at Mount Monger.
- SLR claims that the first half operating performance makes it well-positioned on the track to deliver its FY22 guidance.
What other investments has SLR made?
- During the December quarter, SLR has executed multiple transactions to acquire Harte Gold Corp. Harte Gold owns and operates the Sugar Zone mine in Ontario, Canada.
- Parallel to this, Silver Lake reached an agreement to buy an existing aggregate 2% NSR royalty over the Sugar Zone mine and property for US$22 million, in the form of SLR shares.
- The acquisition of Harte Gold and the Sugar Zone operation shall diversify Silver Lake’s production base and establish it in a tier 1 mining jurisdiction.
- The acquisition, however, is subject to court approval and might close in mid or late February 2022.
- At quarter-end, the cash and bullion reflect an underlying AU$17 million cash build and AU$101.9 million in outflows for the Harte Gold acquisition.
Image Source- © Cacaroot | Megapixl.com
Where is SLR headed in H2-22?
- Due to Covid infused mobility restrictions in Western Australia, SLR is witnessing lower productivity and higher costs.
- Due to this reason, SLR has modified its operating strategy at Mount Monger for H2-22. SLR will cease open pit mining and utilise stockpiles to add to underground mining activities in H2-22.
- SLR plans to prioritise its highest returning projects while retaining scheduling flexibility until the restricted labour market normalises.
- However, SLR claims to be in line to deliver its FY22 group gold sales guidance at an AISC forecast of AU$1,550 to AU$1,650/oz.
Bottom line
Though SLR claims to be moving ahead in line with its FY22 guidance, the movement restriction in Western Australia is impacting its’ productivity. On the other hand, AISC costs are also on the higher side of FY22 forecasts. Even gold commodity prices have slumped a bit today. These can be probable reasons why the SLR share price is facing a downward pull on the ASX today.
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