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Aussie sweet on Harte’s Sugar Zone

Dec 9, 2022


Following completion of an acquisition in February 2022, Silver Lake Resources commenced a review of operations at the Sugar Zone mine near White River and already, daily tonnage is up.

The company’s objective is one of delivering material operational improvements and a low capital intensity growth strategy to leverage the installed infrastructure and current Mineral Resource.
At the time of the acquisition, the company stated: “The acquisition of Harte Gold and the Sugar Zone operation, with the associated land package further diversifies Silver Lake’s production base and establishes a significant growth platform in a tier 1 mining jurisdiction, at an attractive entry point. The early-stage nature of the operation provides Silver Lake with the flexibility to consider multiple operational optimization strategies to enhance the value of the defined mineral inventory, whilst the limited drilling immediately beyond the defined mineral inventory and the scale of the land package provides significant exploration potential to enhance Silver Lake’s organic growth pipeline.”
Silver Lake purchased BNP Paribas (“BNP”) debt facilities at par value of US$65.3 million. In parallel, Silver Lake negotiated an exclusive right with BNP to have the flexibility to close out or novate Harte Gold’s hedge book with BNP undertaking not to support an alternative transaction which did not close out the hedge book.


In its Quarterly Report to the Australian Stock Exchange, Silver Lake outlined positive developments at Sugar Zone, including:


• Quarterly gold production of 10,709 ounces with sales of 9,692 ounces at an AISC of A$2,665/oz
• Significant progress on phase 1 capital projects with new crushing circuit operational, new maintenance workshop and mine warehouse on schedule for completion in Q2 FY23
• Regulatory permits received for increased mine and mill capacity to 1,400 and 1,500 tpd respectively

 

During the quarter Silver Lake made significant progress on the first phase of capital projects at the Sugar Zone including:


• Completion of new crusher plant installation which is now operational and provides a step change in crushing capacity in line with the new permitted limit of 1,500 tpd
• Redundant crushing circuit removed with civil, electrical and mechanical works well progressed to establish a maintenance workshop facility in the former crusher shed during Q2 FY23
• Tailings lift progressing and is scheduled to be completed prior to the freezing of Gagegenha Lake. The tailings dam is a critical path item prior to the onset of winter and the commencement of discharge constraints into Gagegenha Lake.
• Conversion from propane to lower cost compressed natural gas for heating units at the Sugar Zone is complete
• Completing the upgrade of surface fibre optic and installation of underground fibre optic cable to increase communication efficiency across the site and facilitate remote bogging operations following the arrival of the new underground loading fleet later this financial year
• Cash expenditure on capital projects during the quarter of $10.0 million Permit amendments to increase mine and mill capacity to 1,400 and 1,500 tonnes per day respectively were received during the quarter.
The permits support the potential for Silver Lake to deliver production growth at the Sugar Zone operation as capital investment projects are executed and a new more reliable and productive underground mine fleet is introduced to the mine, in parallel with the ramp up of underground and surface drilling activities, which have the potential to materially change the outlook for the operation.
The Sugar Zone mine is a high grade underground mine approximately 30km north of White River or midway between Thunder Bay and Sault Ste. Marie.
Gold mineralization mainly occurs in quartz veins, stringers, and quartz-flooded zones predominantly associated with porphyry zones, porphyry contact zones, hydrothermally altered basalts and, rarely, weakly altered or unaltered basalt within the three subzones.

 

For this article and more visit the digital copy of: The Northern Ontario Mining Report

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