Silver Lake Resources (ASX:SLR) has generated a 133% increase to $11.9 million in net cash inflow from its Mount Monger gold operations.
There was a reduction of 11% in all in sustaining cash cost at Mount Monger to A$1,265 ounce in the quarter ending 31st March 2015.
This was off mill production of 33,198 ounces, a 14% increase over the previous quarter.
The lower cost per ounce profile over the previous quarter is due to a 6% increase in ounces sold and reduced costs over the entire operation.
There has been a strong focus in driving unit cost efficiencies at the Mount Monger Operations whilst productivity improvement and cost reduction remain operational priorities for the company.
Group production
Group gold sales were 34,003 ounces and year to gold production was 91,838 ounces.
Silver Lake hedged a further 64,000 ounces at an average A$1,613 an ounce. The forward gold hedging book now totals 108,554 ounces to be delivered over the next 17 months at an average forward price of A$1,563 an ounce.
Guidance for the year ending 30 June 2015 for gold sales remains unchanged at 120,000 ounces.
Ore feed for the remainder of FY15 will be sourced from the Daisy Complex & Cock-eyed Bob underground mines, the Wombola Dam open pit and surface stockpiles.
Mount Monger Operations
Silver Lake milled 300,399 tonnes of ore at a blended grade of 3.6 grams per tonne to recover 33,198 ounces of gold.
Ore feed was sourced from the Daisy Complex and Cock-eyed Bob underground mines, the Wombola Dam open pit and surface stockpiles.
Surface stockpiles at 31st March 2015 totalled about 440,000 tonnes containing 18,500 ounces of gold.
Exploration
There were encouraging drilling results from Daisy Complex and Imperial/Majestic. New high grade trends were interpreted below the Maxwells open pit.
During the quarter, Silver Lake completed 5,649 metres of underground resource definition drilling at the Daisy Complex and 2,283 metres of surface exploration drilling at the Imperial/Majestic development project.
At Imperial/Majestic, infill diamond drilling successfully confirmed the high grade zones within the Imperial deposit.
Assay highlights included 2.63 metres at 23.79g/t gold from 142.96 metres in hole 15IMDD010 and 2.95 metres at 56.21g/t gold from 115.8 metres in hole 15IMDD011.
Geological observations are consistent with the previously modelled high grade zones at Imperial.
Notable intersections were 2 metres at 31.39g/t gold from 99.9 metres down hole and 5 metres at 4.29g/t gold from 87.9 metres down hole.
All holes targeting the northern area of the Lower Prospect Lode 32 intersected the Lower Prospect style mineralisation with down hole intersections varying between 1 metres and 9 metres (not true width).
Significant intersections were:
- LP405106 with 3.44 metres at 27.03g/t gold from 142.16 metres down hole, including 0.5 metres at 111g/t gold; and
- LP405110 with 1.65 metres at 630g/t gold from 171.75 metres down hole.
Two drill holes were also drilled to test an area in Haoma West north of the North fault with limited historic drilling.
This returned an intercept of 0.2 metres at 32.6g/t from 222.9 metres down hole and further drilling is planned targeting this area next quarter.
Maxwells Underground Development Project
During the quarter a review of the geometry and grade distribution of the BIF hosted mineralisation immediately beneath the Maxwells open pit was completed.
Reinterpretation of the structural controls on the BIF sequence identified several previously untested high grade plunging zones adjacent to the known resource zones that are amenable to underground mining.
A program of approximately 4,500 metres diamond drilling is planned for next quarter testing two of the newly identified high grade target zones.
The company held $22.1 million in cash and bullion on hand as at 31st March 2015.
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