Silver Lake Resources to acquire Phillips River Mining
Gold mining company, Silver Lake Resources, has announced an agreement with Phillips River Mining Ltd to merge the Phillips River’s assets into Silver Lkae by a Schem of Arrangement. The acquisition has a transaction value of approximately $20m or about 2.5% of Silver Lake’s current market capitalisation.
Silver Lake is targeting an increase in production from the Mount Monger Operations to 200,000 ounces per annum by 2014 by mining from multiple underground and open pit ore sources. The Silver Lake Mount Monger Operations have a current JORC resource of 5.1 million tones at 8.9 g/t for 1.5 million ounces of gold.
In the Murchison, Silver Lake is developing a second gold mining operation with multiple mines feeding a central processing facility. Production is expected to commence in the March 2013 quarter ramping up to 100,000 ounces per annum in 2014. The Murchison Project has a current JORC resource of 18.4 million tonnes at 2.8 g/t for 1.7 million ounces of gold.
SLR is also actively exploring the Murchison with a $20 million budget for base metal targets within the Eelya Complex following the discovery of the high grade Hollandaire copper deposit.
Silver Lake’s strategy since inception has been to acquire quality gold assets that provide: a dominant position in a highly prospective region; existing JORC resources with significant scope to extend those resources; near term production ability; and significant exploration potential.
Acquiring Phillips River’s assets is consistent with this strategy and allows Silver Lake to further grow its gold business post ramp up of Mount Monger and development of the Murchison.
With a JORC resource2 of 1 million ounces of gold, 10 million ounces of silver and 95,000 tonnes of copper the assets represent an attractive medium term growth platform for Silver Lake.
Post-merger the Philips River assets will be collectively known as the Great Southern Gold Project. Great Southern has two discreet exploration projects, Kundip and Munglinup covering over 2,500 sqkm of tenements located in south east of Western Australia.