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NEWS
Silver Lake:

Larger, lower cost, longer life

by Michael Washbourne start to FY2021 with group production of 62,262oz gold and
424t copper for the September quarter in line with the full-year
guidance of 240,000-250,000oz gold and 1,100t copper at
rom November 2019 to November 2020, Silver Lake
$1,400-1,500/oz AISC.
FResources Ltd was the best-performing gold stock among its
“It’s been six years of dedicated work by the team to put Silver
peer group – a far cry from the perilous position the company
Lake into the position it’s in,” Tonkin said. “We’re carrying a very
was in six years ago when Luke Tonkin moved into the managing
strong balance sheet, our production base has been underpinned
director’s chair.
by some very savvy M&A activity and we’ve continued to maintain
Back then, soaring debt levels nearly wiped the one-time market a pretty solid production base out of Mt Monger off the back of
darling from existence. Fast-forward to today and the company
significant success in exploration over the last six years.”
holds more than $300 million in cash and bullion and is on track to
FY2020 was the first full year the Deflector gold-copper mine
exceed production of 250,000 ozpa for the second year running.
has been on Silver Lake’s books following a successful nil-
Asked by GMJ if it was satisfying to have led Silver Lake’s premium merger with Doray Minerals. Since April 2019 when
remarkable turnaround, Tonkin replied: “Not really, that’s my job.”
that combination was formalised, the company has increased
“We’ve got to be very grateful for those men who had the foresight reserves by 78% and grade by 26% while posting a record annual
to purchase the Daisy Milano mine when they did because output from the Murchison-based operation.
without that asset, this company would not have got through the A new CIP circuit is being added to the Deflector processing plant
big difficult period that it has.
allowing new ore types to be treated, including the upcoming
Rothsay mine which was acquired via a takeover of Egan Street
Resources in late 2019.
First ore from Rothsay is scheduled for processing in early
FY2022.
“We were looking at Rothsay, even whilst we were looking at
Doray,” Tonkin said.
“It was always on the radar as a swing producer for the Deflector
mine, but that was also based on the fact Deflector had to deliver
an increased growth profile which we have been able to do
through our exploration.
“That CIP upgrade allows us to treat Rothsay and other orebodies
Luke Tonkin or mineralised systems close to the Deflector area…it couldn’t
before because the Deflector processing facility only had a gravity
“It did need some refining of the strategy and the management circuit and a float circuit. Now that it will have a CIP circuit, all
of the company, but to those founding fathers of this company, those non-sulphide deposits within that area, including Rothsay,
to their credit they recognised what was needed. And as you’ve can go through that facility.
seen over the last five years, there’s been very tactical changes “The other benefit of the CIP circuit is it also increases the
to the board, without any fanfare, with those founding fathers recovery of the Deflector ore by about another 5%.”
moving away from the board and being replaced in a very
Tonkin said while shareholders would not see any returns from
measured fashion.
Rothsay this financial year, the stage was being set for a bumper
“So it wasn’t a Krakatoa explosion; it was a very considered FY2022 and beyond.
strategy of how to move this company further forward.”
“I’ve been very clear with our stakeholders that this is a transition
Headlined by the company’s market cap climbing towards the year for the company because we’re investing heavily for the
$2 billion mark, Silver Lake shareholders have had plenty to future,” he said, adding that about $80-90 million was being spent
celebrate over the past 12-18 months, including group production on growth projects in FY2021.
increasing 64% and twice upgrading its sales guidance during
“The $300-plus million that we’ve studiously built over the last six
FY2020.
years or so, we’re redeploying – not all of it, obviously – back in
On the financial front, Silver Lake reported underlying NPAT of the assets that we think have got strategically the ability to make
$217 million (up 3,852% from FY2019) and operating cash flow us larger, lower cost and longer life; and everything we do as a
of $252 million (up 250%). The company also made a positive company is all about that mantra.”

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