Silver Lake Resources Limited (ASX: SLR)

Positive Drilling Results from Santa Underground - Silver Lake Resources, is a gold producing, and exploration Company that has enhanced its geological understanding of the structural controls and gold mineralisation of the BIF hosted deposits in the Mount Belches Mining Centre over the past two years.  This led to a significant increase in the production transparency of the Mount Belches Mining Centre through the development of the Maxwells, and re-commencement of the Cock-eyed Bob, underground mines. Its ability to leverage off the installed above-ground support services and maintenance infrastructure at Mount Belches provided a potential for an internally funded, near-term and low-capital mine development with sufficient confidence in the continuity of mineralisation at Santa that will be established in further drilling programs. The gold mineralisation at Santa is hosted by Banded Iron Formation (BIF) units that define the core of an anticlinal fold hinge defining the chevron folds within the Mount Belches area.  An initial phase of exploration diamond drilling was completed in early 2017 based on the new geological model with results provided in the March 2017 quarterly report.


Plan view of the Santa mine area (Source: Company Reports)

After successfully recommencing of mining operation at Cock-eyed Bob, the Group has re-focused on a potential third underground mine at Mount Belches with follow up drilling on the 2017 results as the immediate priority. The results also confirmed about the strike and vertical continuity of high-grade mineralisation within the West Lode BIF units, and reflected the potential for immediate down plunge and strike extensions to the high-grade lodes into the area where no previous drilling on the western limb of the Santa BIF was undertaken. The Group updated its FY18 guidance for gold sales and changed it to 145−150koz. It strongly focuses on controlling the cost so that it can maintain margins while new mines have been developed/ramping up. The stock was up by 74.63 per cent in last six months and declined marginally that is by 1.68 per cent in last five days. We give a “Hold” recommendation at the current market price of $0.575 (down over 1.7% on June 08, 2018) by looking at the future potential from the drilling results.
 

Metals X Limited (ASX: MLX)

Extension of mine life at Nifty - Metals X is a base metals producer with ongoing expansion projects and a significant pipeline of additional growth opportunities. The group lately provided an update on its Nifty Copper Operations (Nifty) located in the East Pilbara region of Western Australia. Since the acquisition of Nifty, the Company focuses on increasing the production rate on returning the process plant to continuous operation and extending the mine life. Its strategic objective is to transform Nifty into a large-scale, long-life mine with an annualised production rate in excess of 40,000t of contained copper in concentrate. MLX is Increasing Ore Reserves and therefore mine life from approximately 1 year to 6 years through developing and implementing a 5-year mine plan based on Ore Reserves. Despite a delay in the timing of the production ramp-up at Nifty, with a recapitalised infrastructure and equipment base, and high geological confidence in the mine plan, the management is confident that it will achieve its strategic objective of 40,000tpa by the end of 2018. As the Company is implementing its mine plan, it is expected that the overall grade of ore mined will continue to improve as additional stops progressively come on line outside of the checkerboard. Meanwhile, Industry Super Holdings Pty Ltd ceased to be a substantial holder of the Group since 05 June 2018. In the last one year, the stock climbed up by 10.67 per cent and slipped by 5.68 per cent in one month. While some volatility is prevailing, we recommend to “Buy” the stock at the current market price of $0.845 (up 1.81% on June 08, 2018) given the positive set of developments.
 

Nifty Corporate Mine (Source: Company Reports)

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