Silver Lake Resources heard the bell ring when its board approved the development of the Santa underground gold project in Western Australia.
Santa will be the third shallow, high-grade underground mine at Silver Lake’s Mount Belches mining centre, located 22 kilometres from the company’s Randalls gold processing facility.
The mine will increase ore sources at Mount Monger and demonstrate organic growth potential within 25 kilometres of the prospective banded iron formation (BIF) controlled by Silver Lake.
Santa’s development will require a “very modest” pre-production capital investment of $2.1 million to establish underground access and site services. A further $2 million will go towards Santa’s underground infrastructure.
Silver Lake expects construction activities to take two months, with underground mine development commencing towards mid-2020.
Mine production from Santa will deliver around 1800 ounces in the 2020 financial year, before rising to 26,000 ounces in the next corresponding period.
Santa has a maiden ore reserve of 257,000 tonnes at 3.5 grams per tonne for 29,000 ounces immediately beneath the base of the Santa North pit floor.
The Santa area has a broader mineral resource of five million tonnes at 2.8 grams per tonne for 454,000 ounces, which Silver Lake believes will likely convert to reserves as it continues drilling.
Santa is expected to increase Mount Belches mining centre’s target production to 70,000–75,000 ounces a year with three operating mines, including the Cock-eyed Bob and Maxwells underground mines.