The Silver Lake Resources Ltd (ASX: SLR) share price is down 18% right now after disappointing investors with its quarterly update.
Silver Lake describes itself as a growth-focused, Australian-based intermediate gold producer.
June quarterly update
Silver Lake said that it delivered quarterly production of 81,616 ounces of gold and 642 tonnes of copper.
It also achieved sales of 83,540 ounces of gold, and 606 tonnes of copper.
The gold was sold at an average sales price of A$2,874 per ounce, while the mining costs – the all-in sustaining cost (AISC) – was A$1,598 per ounce.
FY23 numbers
For the whole 2023 financial year, the business achieved production of 261,604 ounces of gold and sold 260,372 ounces at an average sales price of A$2,697 per ounce. The AISC was A$1,941 per ounce.
Turning to copper, it produced 1,483 tonnes and sold 1,325 tonnes in the 2023 financial year.
Exploration
In the quarterly update it said that it spent $6.1 million in exploration targeting infill, extension and discovery within “proven mineralised corridors” near to existing infrastructure.
For FY24 its exploration budget is $43 million, which the company said demonstrated Silver Lake’s “confidence in the continued low capital intensity organic growth potential”.
Balance sheet
Silver Lake said that it ended FY23 with cash and (gold) bullion of $332 million. This figure excludes $20.1 million of gold in circuit and concentrate on hand( at net realisable value).
The ASX gold share said that it generated $67 million of underlying cashflow during the quarter.
Outlook for the Silver Lake share price
The company said that the FY24 sales guidance for its Australian operations is 210,000 ounces to 230,000 ounces at an AISC of between A$1,850 to A$2,050 per ounce, including $168 per ounce in non-cash inventory charges relating to the treatment of stockpiles at Mount Monger.
It also said that activities at Sugar Zone will “pivot to an investment in drill data acquisition in parallel with an idling of mining and processing activities to facilitate a reset of mining practices and upgrading of site logistics network, necessary to support a higher margin and long life operation.” Mining and processing activities “will be idled in FY24” to allow for the development of three exploration drives.
I don’t know enough about the ASX gold mining share to give a definitive call on whether this is great price, but it’s possible that the short-term pain could be a long-term opportunity, but I’m not looking to invest.
