Silver Lake Resources adds fifth gold production source at Mount Monger Operations

Gold producer and ASX 300 company Silver Lake Resources (ASX: SLR) is fresh from a bumper A$15.8 million net profit for financial year 2011, up 34% on the corresponding period, and is now ramping up gold production - at a time of record prices for the yellow metal.

The significance of the Wombola Dam open pit now being a ore source for gold production at the company's Mount Monger Operations, is that five ore sources are now in operation.

Production is currently being sourced from four independent underground mines accessed from the same infrastructure, being Daisy Milano, Daisy East, Rosemary and Haoma.

The importance of ore from Wombola Dam is that this will further diversify production sources and reduces reliance on any one deposit.

Wombola Dam is located just 5 kilometres north west of the Daisy Milano mine and has a current JORC Resource of 433,000 tonnes at 3.9 grams per tonne gold for 54,500 ounces.

Les Davis, managing director, commented, “The commencement of production at Wombola Dam allows additional ore stocks in readiness for the stage 1 upgrade of Lakewood Mill to 700,000 tonnes annually in December 2011 which is tracking to plan.”


The Wombola Dam production plan

Production from Wombola Dam will be a two stage process.

Stage one, known as the starter pit, is predominately transitional/fresh (hard) rock to produce around 13,000 ounces over a 9 month period at a strip ratio of 4.8:1 (waste:ore) at a cash operating cost of A$432 per ounce.

Given the near surface nature of the mineralisation the first ore was delivered to the ROM pad just one week after the surface top soil removal commenced.

The starter pit extracts less than 30% of the total resource down to a depth of around 35 metres, with stage two kicking off after the completion of the starter pit, with further drilling to be carried out below 35 metres.

Grade control and depth drilling will also be completed within the conceptual big pit shell.

Silver Lake said that this drilling is expected to complete the mining study for the second stage.

While the drilling and mining study for stage two is being completed it is expected, subject to a decision to mine, to commence production at the nearby Wombola Pit deposit.

Originally published at: http://www.proactiveinvestors.com.au/companies/news/19547/silver-lake-resources-adds-fifth-gold-production-source-at-mount-monger-operations-19547.html