Shares of beaten-down junior West-Australian gold producer, Silver Lake Resources Ltd (ASX: SLR), have drifted sideways on the back of its quarterly results, which were released earlier in the day.
This morning Silverlake said in an ASX announcement that gold sales for the three-month period ended 31 March 2015 were 34,003 ounces, with year-to-date production at 91,838 ounces.
Whilst the gold's grade, which is the amount of gold extracted from one tonne of ore, came in at a robust 3.6 grams per tonne and Silverlake's all-in sustaining cost (AISC) was $1,279 per ounce.
Although this was lower than the $1,400 per ounce AISC in the previous quarter, the miner's year-to-date AISC stands at $1,353 per ounce.
Currently gold fetches $1,547 per ounce at market.
Silverlake's costs compare to fellow ASX-listed gold producer Independence Group NL's (ASX: IGO) AISC of $781 per ounce.
However it's worth noting Silverlake does have significant hedging in place.
According to the company's announcement today, a further 64,000 ounces of gold have been hedged at $1,613 per ounce since December 2014. Forward hedging "now totals 108,554 ounces to be delivered over the next 17 months at an average forward price of $1,563/oz" the company said.
Should you buy Silverlake Resources Ltd shares?
Silverlake has forecast production guidance at 120,000 ounces for the full year, which compares to 170,000 ounces in 2014.
Whilst Silverlake could be a potential turnaround play, I suggest investors considering buying its shares first look at quality producers like Independence Group, Northern Star Resources Ltd (ASX: NST) and Newcrest Mining Limited (ASX: NCM).
