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Highlights

  • Silver Lake is a multi-asset gold company engaged in exploration, mine development, mine operations and sale of gold and gold/copper concentrate
  • In 1HFY24, revenue of SLR increased by 28% YoY to AUD 374.4 million
  • SLR and Red 5 have inked an agreement to merge

Australia based Silver Lake Resources Limited (ASX: SLR) is an intermediate gold production group. The company generates cash flow from its operating assets located in Western Australia and Northern Ontario, Canada.

In the first half of the financial year 2024 (1HFY24), the company reported gold sales of 124,771 ounces, up by 7.8% over the previous corresponding period. During the reported period, EBITDA grew by 124.4% to AUD 164 million, and revenue increased by 28% YoY to AUD 374.4 million. The revenue growth was supported by nearly 8% increase in sales and 19% jump in average gold price on a YoY basis.

Statutory profit after tax was AUD 49.7 million for the period.

Recent business update

On 5 February 2024, the company shared an update on merger with Red 5. Red 5 and SLR inked a binding scheme implementation deed to merge. Under the contract, Red 5 would acquire all shares of SLR and every shareholder of SLR would get 3.434 shares in Red 5 in exchange of individual shares held in SLR.

After the completion of transaction, Red 5 shareholders will have 51.7% ownership of the merged entity and rest will be owned by SLR.

Top 10 shareholders of SLR

The top 10 shareholders of SLR have around 32.88% shareholding in the company, while the top four have 24.81% shareholding. Van Eck Associates Corporation and Dimensional Fund Advisors, L.P. have the maximum stake in the company with a shareholding of ~10.55% and ~5.60%, respectively.

Outlook

In FY24, the company expects to register sales of 210,000 – 230,000 ounces at an AISC of AUD 1,850 – 2,050 per ounce.

The company aims at creating a diversified mid-tier producer with growth opportunities in tier 1 jurisdiction by merging with Red 5.

The company is focused on advancing its exploration and drilling activities with the intent of mineral resource definition and extensions at established underground and planned open pit mines.

Share performance of SLR

SLR shares closed 5.86% higher at AU$1.175 apiece on 5 March 2024. Including today’s gain, SLR’s share price has increased by 12.98% in the last 12 months and has reported a gain of 25.667% in the past six months.

The 52-week high of SLR is AUD 1.355, recorded on 14 April 2023, while the 52-week low is AUD 0.805, recorded on 28 September 2023.

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, and currency, is 05 March 2024. The reference data in this report has been partly sourced from REFINITIV.