PERTH (miningweekly.com) – Gold miner Silver Lake Resources has completed the acquisition of TSX-listed Harte Gold Corp for a final acquisition price of $102-million.

In closing the acquisition, Silver Lake has also elected to close out Harte Gold’s out of the money hedge book for $24.8-million.

To capitalise on the prevailing gold price, Silver Lake contemporaneously entered into a $22-million gold pre-pay for 11 928 oz to be delivered over the next 12 months.

The acquisition of Harte Gold gave Silver Lake full ownership of the Sugar Zone mine and associated 81 287 ha land package in a prolific gold district in Northern Ontario. The mine started production in 2019 and is one of Ontario’s most recent and highest grade gold mines, with a mineral reserve of 797 000 oz at 7.2 g/t.

In 2021, the Sugar Zone mine produced 257 281 t at 6.5 g/t for 51 453 oz, which was consistent with Harte Gold’s revised guidance range.

Silver Lake has commenced a review of operations at the Sugar Zone mine with the objective of delivering material operational improvements and a low capital intensity growth strategy to leverage the installed infrastructure and current mineral resource.

The most recent mineral resource (dated 30 September 2020) of 1.64-million ounces grading 10.9 g/t remains open along strike and at depth with inadequate exploration work beyond the existing mineral resource which supports the potential for additional discoveries.

Silver Lake said on Monday that the Sugar Zone acquisition complements the company’s strategy of delivering superior returns for shareholders by positioning Silver Lake as a leading gold growth stock on the ASX with a balanced portfolio of operations and growth projects in tier 1 mining jurisdictions, supported by a robust balance sheet and free cash flow generation.

Meanwhile, Silver Lake on Monday reported a net profit after tax of A$44.5-million for the half-year ending December, down from the A$65.8-million reported in the first half of 2021, with the results including a non-cash tax expense of A$19.5-million.

Gold sales for the first half of 2022 reached 126 718 oz, down from the 130 354 oz sold in the first half of 2021, with gold prices increasing from A$2 400/oz to A$2 418/oz in the same period.

Earnings before interest, taxes, depreciation and amortisation (Ebitda) reached A$157.6-million in the half-year, down from A$160.1-million in the previous corresponding period, with Ebitda margins remaining unchanged at 51%.

The hedge book at the end of December stood at 75 500 oz, at A$2 378/oz, to be delivered over the next 12 months.

For 2022, Silver Lake was targeting sales of between 235 000 oz to 255 000 oz, with copper sales targeted at between 600 t to 1 000 t, and all-in sustaining costs at between A$1 550/oz and A$1 650/oz.