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$1.57 silver lake resources limited

in reply to scottrader : Their drill results have to go through...

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plough

34,154 Posts.

1883

07/05/23

07:11

Post #: 67643431
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Originally posted by nordesmic ↑

Good comments. I think there is definitely something about Gwalia that brings out the ego in these management teams (Genesis’ Saracen crew as well). Objectively it’s been a struggling asset for the last few years and has declined significantly from what it was back in 2016-18. That was despite huge capital investment to set it up for the future (prob $200M+). It’s unclear why everyone wants this mine.

Maybe it’s the history of it all with Herbert Hoover etc. Maybe it’a a bunch of mining engineers embracing the operational/technical challenges at extreme depth and thinking they can turn it around.

One of the funny things in the SLR media release was the line about a combination bringing ‘A superior capital markets profile to enhance appeal to gold and generalist investors.’

I can’t think of a worse company to takeover Gwalia to enhance the market profile and appeal to generalist investors. Aside from the fact that the combination would be a bigger company, it’s hard to see how the SLR mgmt team would enhance the profile based on their form.

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in reply to scottrader :
Their drill results have to go through a bunch of calculations before they can be pegged down as reserves , so no , its not fair to say "the SLR's reserves are much more than disclosed" , so taking SLR to "court" would be at best a waste of time .

Originally posted by rowingboat ↑

Indeed, Oblong123.

Check out slide 16 in the latest GMD presentation, April 17th. It would appear that SBM has been mining peripheral to the main ore body and been particularly caught out by covid, lock-downs, high inflation, labour and supply chain issues. Poor management decisions? The locked-in grades for the FY24 mining sequence (northern sections) are on the periphery and relatively poor, seemingly 1-5g/t according to the figure. However, from FY25 and for many years to follow it would appear, grades improve dramatically in the South-West branch, from 5 to 30+ g/t where SBM had prior success. Therein lies the opportunity for GMD or maybe SLR in the medium term.

From a balance sheet perspective, Silver Lake has fared much better than most Australian producers in the last year or two. They locked down a $140m (plus extras) takeover of Harte Gold in the first half of 2022 followed by $100m capex spend in the second half of 22. Despite these outlays, I expect their cash/bullion position to be near its all time high, over $300m again at June 30. They didn't need to take on debt (except the small gold pre-pay loan to buy back the hedges, which has now been extinguished) or issue hundreds of millions of shares, like some of their peers may have done. Management have navigated the challenges very well IMO.

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"From a balance sheet perspective, Silver Lake has fared much better than most Australian producers in the last year or two. "

been an investor for over 16 years in SLR yet to receive a dividend , that helps with their balance sheet/cash flow but not mine as much (nice share price appreciation though ) .

SLR Price at posting: $1.18 Sentiment: None Disclosure: Held
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