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Australian gold company targets growth at White River mine

Silver Lake Resources invests in new buildings, processing equipment at Sugar Zone Mine
Sugar Zone Mine (Algoma-Manitoulin MPP Mike Mantha Facebook photo)

The new Australian owners of the Sugar Zone Mine continue to sink investment into the underground operation near White River.

Silver Lake Resources reported it’s made “significant progress” at the mine with expenditures of almost $9 million the company's past September quarter. Most the spending has been on processing equipment and new buildings.

Silver Lake picked up Sugar Zone last winter in an insolvency sale by Harte Gold. The South Perth-based company vowed to spend between (Australian) $35 million and $45 million ($31.4 million and $40.4 million) over the next two years to get the struggling operation to a productive and profitable state. Commercial gold production under the Harte Gold flag in 2019.

The new company wants to ramp up production at the mine 30 kilometres north of the town of White River.

The operation was recently permitted to make a mining and milling rate jump up to 1,400 and 1,500 tonnes per day, respectively.

A new crushing plant circuit is now operational with work still ongoing to erect a new maintenance shop and a warehouse to be ready by next year.

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The tailings waste area has been enlarged and heating at the site is now provided by lower cost compressed natural gas instead of propane. 

New fibre optics have been installed above and below ground for better communication and in anticipation of tele-remote mining operations. New underground loading vehicles will arrive in the next few months.

During the quarter, Sugar Zone gold production stood at 10,709 ounces with sales of 9,692 ounces at an all-in-sustaining cost of A$2,665 ($2,394) an ounce.

On the underground development side, the company said a “breakthrough” occurred in October with the discovery of high-grade quartz veins in the Middle Zone section of the mine. It’s opened up a “new mining horizon” outside of the known ore reserves. 

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On the exploration front, a surface program is underway to test an area called the Lynx Zone, situated 1.5 kilometres south of the mine. The company said assay results from this spot reinforce their belief of the growth potential of Sugar Zone. A follow-up drilling program is in the works. 

Sugar Zone is Silver Lake’s third gold mine asset and it’s first outside of Australia.

Silver Lake reports that they continue to face a “challenging” operating environment at all of its mines as skilled labour availability, absenteeism and tight supply chains continue to be issues.