Who’s next for the Silver Lake Tsunami
DIGGERS AND DEALERS: Diggers & Dealers wouldn’t be Diggers & Dealers without a juicy rumour doing the rounds so The Roadhouse thought it might as well start one.
Our inspiration stemmed from the opening day’s announcement of the takeover of Integra Mining by Silver Lake Resources.
It got us thinking. Who would be the next obvious target for Les Davis to cast his acquiring glance over?
One company that popped the top of its head above the parapet was Adelaide-based Southern Gold.
Earl this year Southern Gold welcomed none other than takeover quarry Integra Mining as a cornerstone investor with a 12 per cent stake in the company.
The company raised $4.66 million via a $1.35 million placement of shares at 5 cents per share to Integra and a fully underwritten non-renounceable rights issue for $3.31 million.
Southern Gold’s main project is the Bulong project, which is located in Silver Lake’s backyard just some 35 kilometres south-east of Kalgoorlie.
Bulong began life as a nickel project measuring around eight square kilometres.
It now measures some around 250sqkm and hosts the Cannon prospect where Southern Gold has built a Resource currently estimated at 94,000 ounces at 3.3 grams per tonne gold.
Bulong Gold project: showing Heron JV packages and the proximity
to neighbouring Integra’s tenement package and nearby gold processing
facilities. Source: Company quarterly report
“We believe we are just scratching the surface at Cannon, Southern Gold managing director Nannette Anderson told a group of journalists at Diggers & Dealers.
“We have defined this Resource within the last 18 months and we are increasing it.
Anderson spoke of the advantages of the project’s location saying that if it was located in a remote region the company would have to conduct a lot more work than what is currently necessary for it to build up its Resource to 500,000 ounces to support a gold treatment plant.
The advantage being the company’s proximity to Kalgoorlie and the five plants currently in operation around the city from which it can choose from to consider gold treating operation.
“I guess we have two roads to go down, either the toll treating option or to spend money and build on our Resource base,” Anderson said.
The roadhouse asked Anderson whether the news of the Silver Lake deal with Integra had encouraged her to knock on Les Davis’ door to introduce herself.
Although she hadn’t quite got that far, she did acknowledge there were a number of synergies between the two companies.
“There are definitely a lot of synergies,” she said.
“When we took the placement from Integra earlier this year – we looked at all the companies in the area – we aligned ourselves with Integra primarily because we thought the synergies were the best.
“They had the closest plant – only by about two kilometres – but it was really Integra’s Majestic discovery that was so important to us.
Anderson said Southern Gold had looked at integrating its timetable to fit with that of Integra’s at Majestic with a view to commence mining at Cannon in March next year.
“If they [Silver Lake] are looking for high-grade ore ours is sitting right at surface,” she said.
Anderson hasn’t booked an orchestra to commence the long dance of negotiations recently completed by Integra but she with her may have purchased a record she can play at home to practice.
“Particularly now that they are going to have two plants under their control, they’re going to be needing feed for those plants.
“Our Resource is such a tidy Resource. New results we released last week demonstrated the high-grade zones are continuous within the Resource we have defined.
“It’s open at depth, so they will be looking at that.”