Silver Lake Resources commences development on high grade ore from Haoma mine

Silver Lake Resources (ASX: SLR) has commenced initial ore development from the Haoma underground mine, which has the potential to become the next Daisy Milano size deposit at Mount Monger.

The Mount Monger operation previously contained the Daisy Milano and Daisy East underground mines, along with the Costello open pit, located 50 kilometres from Kalgoorlie in Western Australia.

Production is now being sourced from Daisy Milano, Daisy East, Rosemary and Haoma.

The Haoma deposit is an important part of Silver Lake's "Three Daisy Milano" strategy which has three independent mines accessed from the same decline infrastructure producing 60,000 ounces (oz) per annum each by 2014.

Initial ore development has commenced and the company said it still has two years to get the development in place and ramp the Haoma deposit up to 60,000 oz per annum.

The company is targeting to increase production from the Mount Monger Operations to 200,000 oz per annum by 2014 via mining from multiple underground and open pit ore sources.

Silver Lake’s Mount Monger operations have a current JORC Resource of 4.73 million tonnes at 8.7 grams per tonne (g/t) for 1.33 million oz of gold.

Les Davis, Silver Lake’s managing director, said “Haoma has the potential to become the next Daisy Milano size deposit and we look forward to further encouraging results as we continue ore development on the 32 level and receive assay results from the ongoing drilling program.”

Haoma is an historic underground mine located west of the Daisy Milano decline and the deposit was mined at a grade of 28.9 g/t gold down to a vertical depth of 180 metres until mining ceased due to tenement boundary constraints.

Haoma has a current JORC Resource of 109,300 tonnes at 18.7 g/t gold for 65,600 oz of gold and is subject to an ongoing underground drilling campaign.

An access drive has been completed to the Haoma 32 level from the Daisy Milano infrastructure about 420 metres below the historical workings.

Ore driving has now commenced and vein grades have returned assay results of 1,499 g/t gold over a vein width of 0.1 metres for the 32 level north face and 98 g/t gold over a vein width of 0.8 metres for the 32 level south face.

Based on the minimum mining width for ore development of 2.4 metres, the diluted mined grades for both these faces averages over 1 ounce of gold per tonne.

The completion of the ventilation shaft within Daisy Milano on time and on budget on June 21 was an important pre-cursor to Silver Lake increasing production to 200,000 ounces per annum.

The remaining requirement of upgrade and debottlenecking the Lakewood processing facility is on target.

Under the guidance of Les Davis Silver Lake has continued to "tick all boxes" over the past 2-3 years.

The recent market malaise provides an opportunity for investors to re-assess Silver Lake and benefit from its growing production profile.

Investors may benefit as companies like Silver Lake could well be re-rated due to continuing consolidation within the gold sector.

Originally published at: http://www.proactiveinvestors.com.au/companies/news/17481/silver-lake-resources-commences-development-on-high-grade-ore-from-haoma-mine-17481.html