The Silver Lake Resources Ltd (ASX: SLR) share price is slipping today despite the miner increasing production and reducing costs.
The post Silver Lake Resources (ASX:SLR) share price slips on quarterly update appeared first on The Motley Fool Australia. –
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.
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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.