Silver Lake Resources (ASX:SLR) share price slips on quarterly update

The Silver Lake Resources Ltd (ASX: SLR) share price is slipping today despite the miner increasing production and reducing costs.

| More on:
A male ASX investor wearing glasses and a beanie and denim shirt puts his hand to his chin wondering whether to buy ASX shares

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Silver Lake Resources Limited (ASX: SLR) share price is in the red today following the release of its latest quarterly report.

At the time of writing, the Silver Lake Resources share price is down 0.99% trading at $1.80 per share.  

Production and costs improve

For the period ending 31 March 2021, the gold and copper miner achieved higher production with a reduction in all-in sustaining costs compared to the prior quarter. The company recorded an average sales price of A$2,180 per ounce during the quarter. Meanwhile, its all-in sustaining costs (AISC) were further reduced to A$1,452 per ounce.

Silver Lake Resources produced 60,502 ounces of gold and 411 tonnes of copper. While sales for the quarter were 60,740 ounces of gold and 279 tonnes of copper.

The company maintained its FY21 guidance for gold sales of 240,000 to 250,000 ounces and 1,600 tonnes of copper. It expects AISC to range between A$1,400 to A$1,500 for FY21.

Silver Lake achieved the steady result while the company works through the development of its projects in the Deflector region. The projects continued to progress through the construction and development phases during the quarter.

Finances and future

Despite investing heavily in investments during the quarter, Silver Lake Resources increased its cash position by $5 million. At the end of March, the miner held $320.5 million in cash and bullion – while remaining debt-free.

Key cash flow movements included $17.9 million from the Mount Monger mine, $23.6 million from the Deflector mine, and $7.8 million in proceeds from the divestment of the Andy Well and Gnaweeda gold projects.

For cash outflows, Silver Lake spent $26.8 million on its Deflector project upgrade and Rothsay underground development. A further $3.4 million was spent on exploration activities.

Re-discovering the Silver Lake Resources share price

The Silver Lake Resources share price has been caught up in the gold price weakness of the past 6 months. Shares in the miner have been thrown in the dirt, falling 20% in that time. Meanwhile, the company has continued to increase its revenue, partly with higher production.

The conflicting patterns have resulted in a compression of its price-to-earnings (P/E) ratio. Consequently, the company now trades on a 5.5 times earnings multiple.

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

Contented looking man leans back in his chair at his desk and smiles.
Broker Notes

Top brokers name 3 ASX shares to buy today

Here's what brokers are recommending as buys this week.

Read more »

A young female investor with brown curly hair and wearing a yellow top and glasses sits at her desk using her calculator to work out how much her ASX dividend shares will pay this year
Opinions

Why I'm still investing in ASX shares during tariff uncertainty

There are a few reasons why I plan to continue investing even during uncertainty.

Read more »

Frustrated stock trader screaming while looking at mobile phone, symbolising a falling share price.
Share Fallers

Why Imricor, Imugene, Newmont, and Pepper Money shares are falling today

These shares are having a tough time on hump day. But why?

Read more »

A young woman holding her phone smiles broadly and looks excited, after receiving good news.
Share Gainers

Why Droneshield, Meteoric Resources, Mount Gibson, and Tyro shares are charging higher

These shares are having a good time on hump day. But why?

Read more »

A young woman sits with her hand to her chin staring off to the side thinking about her investments.
Share Market News

Does this broker prefer Treasury Wine or A2 Milk shares?

These consumer staples companies are comparable in size but not in upside according to this broker. 

Read more »

Broker looking at the share price.
Share Market News

5 things to watch on the ASX 200 on Wednesday

The Australian share market looks set to give back yesterday's gains.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Opinions

Why I'm buying more of these 2 ASX stocks ahead of earnings season

I've been excited about buying these investments.

Read more »

Ten smiling business people wave to the camera after receiving some winning company news.
Share Gainers

Here are the top 10 ASX 200 shares today

The ASX was back in the black this Tuesday.

Read more »