Silver Lake to merge Phillips River

THE BOURSE WHISPERER: Silver Lake Resources has reached a Scheme of Arrangement to merge the assets of Phillips River Mining into the company.

Since its inception Silver Lake has maintained a strategy to acquire quality gold assets.

“Acquiring Phillips River’s assets is consistent with this strategy and allows Silver Lake to further grow its gold business post ramp up of Mount Monger and development of the Murchison,” Silver Lake Resources said in its ASX announcement.

“The acquisition has a transaction value of approximately $20 million or about 2.5 per cent of Silver Lake’s current market capitalisation.

“With a JORC resource of one million ounces of gold, 10 million ounces of silver and 95,000 tonnes of copper the assets represent an attractive medium term growth platform for Silver Lake.”

Once the merger has been completed the Philips River assets will be collectively take on the new moniker of the Great Southern gold project.

 

Post-merger projects location plan. Source: Company announcement

 

Silver Lake said it expects the Great Southern project will provide it with an exciting advanced gold exploration project.

Great Southern has two discreet exploration projects, Kundip and Munglinup that cover over 2,500 square kilometres of tenements located in the south east of Western Australia.

The post-merger Silver Lake will present the following attributes:

JORC Resources of:

–    4.3 million ounces of gold inclusive of 442,000 ounces of reserve; and

–    10 million ounces of silver and 95,000 tonnes of copper.

Three substantial project centres:

Mount Monger, which is currently in production and ramping up to 200,000 ounces per annum in 2014 with an ongoing exploration budget of $9 million per annum;

Murchison is currently under construction with first production expected in the March 2013 quarter ramping up to 100,000 ounces per annum in 2014.

Murchison has a current exploration budget of $9 million for gold and $20 million to accelerate base metal targets within the Eelya Complex following the discovery of the high grade Hollandaire copper deposit; and

The Great Southern gold project.