Silver Lake sees red ink in gold

Silver Lake Resources continues to be buffeted by a low gold price, with operating losses at its Murchison operation and impairments dragging it to a $170 million loss.

But the result was a substantial improvement on the previous financial year, which delivered a $320 million loss for the Perth-based gold miner.

The Murchison operation has been placed on care and maintenance, with the company now focusing on cash flow maximisation from its Mount Monger operation, which finished the financial year with a positive cash flow of $61 million after sustaining capital.

The company has also flagged an expression of interest campaign for Lakewood Mill to be finalised before the year is out.

Revenue was up to $310 million from $215 million last year, but the impact was muted by higher sales costs.

Impairments were $90 million, down from $320 million last year.

Managing director Les Davis said the focus was now on cash flow at Silver Lake.

“The company is mainly focused on the Mount Monger operations, which recorded another strong annual result,’’ he said.

“Mount Monger operations generated a positive cash flow, after sustaining capital, of $61.0 million on the back of full-year gold sales of 172,838 ounces at an all in sustaining cash cost of $1,070 an ounce.

“Overshadowing the strong performance from the Mount Monger operations was the under performance of the Murchison Gold Operations.

“The fall in gold price in mid-2013 resulted in the deferment of capital required to access higher grade, underground reserves and focus production on lower grade open pit reserves.

“Production and cost outcomes with the prevailing gold price led to a decision to place the operation on care and maintenance, which was completed in July 2014.

“As at June 30 2014, the company is in a strong financial position with $34 million of cash and bullion, no bank debt and investments in ASX-listed entities of $9.8 million.”

Silver Lake was up 1.65 per cent to 43.2 cents at the time of writing.