Mining Morsels: SLR, RED

Company News

by Glenn Dyer

Thursday saw operational updates from local gold miners Silver Lake Resources (ASX:SLR) – albeit regarding their Sugar Zone mine in Canada – and Red 5 (ASX:RED).


Silver Lake Resources (ASX:SLR) has reported that its Sugar Zone mine in Canada remains closed by the terrible bushfires (wildfires as they are called in North America) now sweeping parts of the province and pushing heavy smoke across the east of the country down into the north-east of the US.

Silver Lake said yesterday in a second update in 12 days that no damage to the site has been reported so far, but “the Ministry of Natural Resources and Forestry advises that the fire is not under control and site access is restricted to essential staff.”

The shares eased more than 3% to $1.025, despite Silver Lake reassuring the market that its full guidance gold guidance will not be hit by the fires.

“Despite Sugar Zone mining and processing activities being suspended for the significant portion of the remainder of FY23, Silver Lake forecast gold sales for FY23 remains unchanged.

The site was fully evacuated on the afternoon of May 29 following instructions from the Ontario Provincial Police due to the threat of nearby forest fires.

“Site power supply has been interrupted following damage to the Power Transmission Line from White River to the Sugar Zone site. The damage is predominantly restricted to a 4km section of line, in which approximately 1km requires replacement of wooden poles and conductor cleaning,” Silver Lake told the market on Thursday.

“Backup diesel power generation has been established on site and underground access and essential services have been restored,” the company said.

Mining and processing activities will remain suspended until power supply is fully restored, which is not expected until June 19, subject to Silver Lake commencing scheduled power line repairs in the coming days and any further official notifications that may impose access restrictions to the site or the line.

Silver Lake said in its March quarterly report that Sugar zone produced 10,290 ounces of gold in the quarter with sales of 9,066 ounces at an AISC of $A3,132/oz for year-to-date production of 30,824 ounces and sales of 29,116 ounces at an AISC of $A2,849/oz.


Another month, another update from Red 5 (ASX:RED) regarding their King of the Hills (KOTH) gold mine in WA as it slowly ramps up towards capacity.

RED 5 says May saw the mine deliver a third consecutive month of record gold production of 19,039 ounces of gold from 350,000 tonnes of ore processed at an average grade of 1.80 grams to the tonne last month.

May’s output was up from the 18,633 ounces produced from 400,000 tonnes processed at a lower head grade of 1.54 grams to the tonne of gold. March saw 17,550 ounces produced.

The King of The Kills mine is located 28 kilometres north of Leonora in WA’s Eastern Goldfields which has also been the scene of the now boring battle between Genesis Minerals and Silver Lake resources for the Gwalia gold mining assets of St Barbara.

Red 5 said its second half of the 2023 financial year’s production guidance is maintained at between 90,000 and 105,000 ounces at an all-in sustaining cost of between $1A750 and $A1950 per ounce.

Red 5 shares ended at 15.5 cents, unchanged on the day.

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