Silver Lake Resources 34% net profit jump to A$11.8m could be just the tip of the iceberg

Gold producer and ASX 300 company Silver Lake Resources (ASX: SLR), has delivered a bumper set of results for financial year 2011, which could be just the tip of the iceberg for the company as the Mount Monger Operations ramp-up.

Silver Lake delivered a 34% net profit jump to $15.8 million for the period, based on a 30% spike in revenue to $90 million.

Another very important metric is the; Operating profit before changes in working capital and provisions - which jumped 68% to $34 million.

The top set of numbers were supported by an increase in gold production, and the strengthening in the yellow metals price.

Gold production for the period

Underground production was 300,369 tonnes at 7.2g/t gold, for 69,923 ounces, which was well supported by open pit production - which came in at 105,156 tonnes at 2.2g/t gold for 7,358 ounces.

Total production therefore was 405,525 tonnes at 5.9g/t gold for 77,281 ounces.

Mount Monger Operations

Silver Lake is no doubt in a very interesting growth phase, and has forecast a major ramp-up in gold production in the next two years.

The company is targeting plus 100,000 gold ounces in financial year 2012, followed by 150,000 gold ounces in financial year 2013.

The company has already outlined how the production increase will be achieved, with details including:

- 520 metre deep ventilation shaft completed on time & on budget;
- underground operations debottlenecked with production from four underground mines;
- access established to 32 level Haoma & ore development commenced;
- low capital upgrade of Lakewood Gold Processing Facility to 1.0 million tonne per annum, in progress;
- commitment to commence open pit production at Wombola Dam; and
- significant drill intercepts between Daisy Deeps & Haoma.

At the Murchison Project

Silver Lake has also outlined some details on the Murchison Project, these include a Definitive Feasibility Study, which will also focus on mining reserves and project financials, which is continuing.

Work completed by June 2011 includes; a detailed mine designs and schedules for 14 open pit and 4 underground mines;  operating and capital cost estimates; and  infill and extensional drilling in progress at depth.

Originally published at: http://www.proactiveinvestors.com.au/companies/news/19130/silver-lake-resources-34-net-profit-jump-to-a118m-could-be-just-the-tip-of-the-iceberg-19130.html