SILVER LAKE RESOURCES LIMITED (SLR)

Business Description:
Silver Lake Resources Limited (SLR) is a gold producing and exploration company with resources in the prospective regions including the Mount Monger and Murchison goldfields and the Great Southern district of Western Australia. The flagship projects are Mount Monger, Murchison and Great Southern Projects. A June 2012 JORC Resource inventory totaled 43Mt @ 3.3 g/t Au for 4.5Moz Au and a maiden JORC Ore Reserve totaled 15.3Mt @ 2.6 g/t Au for 1.3Moz.

Strategy Analysis:
SLR's strategy is to develop large production centres at Mount Monger and the Murchison with multiple mines at each centre. SLR's Mount Monger Operation contains the Daisy Milano and Daisy East underground mines located 50km southeast of Kalgoorlie. Mount Monger has additional multi mine potential underpinned by emerging open pit production from Costello, Magic, Wombola Dam and Wombola Pit. Furthermore, the discoveries of Emma and extensions to Rosemary and Haoma show potential as near term production sources. Silver Lake Resources reported NPAT down 70% to $5.13m for the half-year ended 31 December 2012. Despite higher volumes mined and milled at lower grades compared to the previous corresponding period, the average gross profit margins and unit cost of sales have been maintained. However, the profit was reduced due to the inclusion of $15.35m of business combination expenses relating to the Integra acquisition. Non-cash transactions affecting profit during the period included depreciation and amortisation of $9.58m (2011: $7.14m) and impairment adjustments of $2.0m (2011: $80,000). Revenues from ordinary activities were $85.61m, up 26.6% from the same period last year. Diluted EPS was 2.19 cents compared to 8.46 cents last year. Net operating cash flow was $35.78m compared to $33.35m last year. No dividend was declared.