Silver Lake Resources’ version of the Great Reset is expected to bear fruit later this year at its Sugar Zone Mine near White River.
The Western Australian said in its December quarterly report that the investments they’ve made in new capital projects and underground mining fronts should set them up nicely to exit the fiscal year in a strong position.
Quarterly gold production at Sugar Zone amounted to 9,822 ounces with sales of 10,358 ounces at an All-in Sustaining Cost (AISC) of $2,773 per ounce for production to date of 20,534 ounces and sales of 20,050 ounces at an AISC of A$2,721 per ounce,
Sugar Zone is 30 kilometres north of White River.
After Silver Lake took control from Harte Gold in early 2022 following a CCAA sales process, the Perth-headquartered company went about a complete operational review of the high-grade underground mine.
The goal is to make significant operational improvements, with some capital spending, to get better production out of the infrastructure and gold resource that’s already there.
Silver Lake said the quarter “delivered significant progress on capital projects and continued transitioning of operational practices at the Sugar Zone, which are required to improve operating performance and margin.”
During the past quarter, the company spent $8.5 million (Australian dollars) on capital projects.
A new crusher plant was installed to remove a production bottleneck and boost capacity to a new permitted limit of 1,500 tonnes per day. A new maintenance workshop and warehouse went up along with a “lift” made to the tailings dam wall.
In an investor presentation, the company said it’s committed to spending $40 million on improvements over the next two years. The site will have modern drills, loading and haulage equipment. The new fleet will delivered through the final fiscal quarter of this year and into 2024.
In the report, tonnages mined at Sugar Zone to date were “marginally higher” quarter over quarter for 66,217 tonnes at 5.3 grams per tonne (g/t) for 11,242 mined ounces.
Those tonnages were “below plan” but the company attributes that to a “shortfall in development metres” caused by a manning issue, the availability of equipment with aged mine fleet, and all the resources that went into site construction last summer and fall.
As a result, the mine guidance - the annual gold production target - has been reduced from 50,000 to 60,000 metres to 45,000 to 50,000 ounces.
On the exploration front, a 71,000-metre drill program is in the works to identify new gold resources near and around the mine. The company is encouraged by the gold potential at depth which stands to “transform the outlook” at Sugar Zone.