Shares in gold miner Silver Lake Resources Limited. (ASX: SLR) are up 12% today following the release of the company’s quarterly production update.

Silver Lake Resources is an Australian gold miner, with its flagship mine being the Mount Monger site located approximately 50km south east of Kalgoorlie in Western Australia.

Strong Production Growth

The company has reported group production of 59,288 ounces of gold and 734 tonnes of copper for the quarter. Sales of 56,683 ounces of gold and 613 tonnes of copper at an average price of just under $1,200 per ounce were also achieved.

36,058 ounces, or just over 60% of total production, was accounted for at the company’s Mt Monger site. The company’s ‘Deflector’ mine which is located about 450km north of Perth is performing nicely, recording a record monthly mine production in September.

Silver Lake has continued to invest in the future growth of its mines, with $5.4 million spent over the quarter across the two mine sites to aid further exploration initiatives.

Bullish Outlook

Perhaps what has been the main cause for the run up in today’s share price was not so much what was reported, but rather the expectations for the remainder of FY20. The company now expects to achieve the upper end of previously given sales guidance of 215,000 to 230,000 ounces of gold at an average all in sustaining cost (AISC) of of $1,375 to $1,450 per ounce.

Investors have reacted positively today with shares sitting at their session high, up more than 12% at the time of writing.

I don’t have a strong opinion on Silver Lake specifically. However, I do think that allocating a small amount of portfolio funds to the gold sector in general could be a good idea as it provides diversification benefits and may act as a form of quasi-insurance in the event of significant economic turmoil.

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Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).

At the time of publishing, Luke has no financial interest in any companies mentioned.