More than four months after declaring commercial production at its Murchison operation, Silver Lake Resources is still struggling to contain costs at its latest gold mine.
Silver Lake maintained its guidance of 60,000 to 70,000 ounces of gold production from Murchison in yesterday's quarterly report, but said the performance of the mine was still below expectations in its first full quarter of production. It produced 13,330oz during the period, at an all-in sustaining cost of $1919/oz, including non-cash adjustments for ore stock movements.
Silver Lake said costs at the mine were coming down, with 6331oz sold from Murchison in September at an all-in cost of $1432/oz, with further improvements likely after converting its diesel power generators to LNG.
The Murchison results dragged Silver Lakes' average all-in production costs up to $1279/oz for the September quarter, with the company realising an average price of $1450 on the 60,910oz sold.
In a positive sign, however, all-in costs at its flagship Mount Monger operation fell 18.5 per cent compared to the three months to the end of June, to $1098/oz. Costs across the company's mines fell from $1347/oz to $1279/oz.
Silver Lake maintained total financial year production guidance of 180,000 to 200,000oz, but said it may revise that figure at the end of December given its record September quarter production.Silver Lake finished September with $25.6 million in cash and bullion on hand, owing only $20 million. Its shares closed down 0.5Â¢ yesterday at 76.5Â¢.