Is the Silver Lake Share Price Good as Gold? (ASX:SLR)

Is the Silver Lake Share Price Good as Gold? (ASX:SLR)

The Silver Lake Resources Ltd [ASX:SLR] share price is on the march again today with the company announcing record production and sales for the June quarter.

A series of strong results and solid management has pushed the SLR shares to hit a price not seen since January 2013.

With shares closing in on its last gold boom price, SLR could be on a trajectory to reach its all-time high.

SLR have surged in the last month thanks to the gold price.

Shares have tacked on ~25% during that time.

At time of writing, SLR is up a further 6 cents or 4.29% to trade at $2.43 per share.

ASX SLR Share Price Chart - Silver Lake Resources

Source: Tradingview

US gold closely tied to SLR share price rise

An interesting pattern has emerged over the past six months. And that is SLR’s correlation with the USD gold price.

Though the company reports its sales in Aussie dollars, the share price has had a stronger correlation with the gold price in USD terms.

Over the past month, SLR’s correlation with the AUD gold price has actually weakened.

Why does this matter?

I mention this because before SLR’s last price run-up, the share price closely tracked the movement in the USD gold price.

Since about 2009, SLR shares have more closely tracked the gold price in USD terms compared to the Aussie price.

With some analysts tipping gold to reach US$2,000 by the end of this year, SLR shares could really take off.

Discover why this gold expert is predicting a HUGE spike in Aussie gold stock prices. Download your free report now.

Can record production lead to record price?

Today’s jump in Silver Lake’s share price has been spurred on by the announcement of record production and sales results.

Group production for the June quarter stood at a record 73,068 ounces of gold and equivalent (equivalent is copper sales converted into gold ounces).

Sales for the quarter came in at 64,593 ounces gold and 416 tones copper at a sale price of A$2,300/oz.

All-in-sustaining-cost (AISC) came to A$1,344/oz.

Record production saw the miner break its upgrade production guidance for the year of 250,000 to 260,000oz gold equivalent.

Production for FY2020 was a record 273,071oz gold equivalent with record gold sales of 255,533oz and 2,175 tonnes of copper.

The full FY20 realised gold price came to A$2,132/oz and AISC was A$1,295/oz.

An increase in the mineral resource and ore reserve at SLR’s Deflector mine will see a higher production guidance set for the current financial year.

Beginning FY20 had a production guidance of 215,000 to 230,000oz of gold equivalent.

FY21 guidance has been set at 240,000–250,000oz of gold and 1,100 tonnes of copper.

However, AISC for FY21 has been increased to around A$1,500/oz.

But with the current gold price trend, the realised gold price could be higher than last financial year.

Here at the Daily Reckoning Australia we follow closely the happenings with Aussie gold miners and explorers. Our resident gold expert Shae Russell has tipped Australia to become the next ‘gold epicentre’, meaning there could be big spikes in Aussie gold stock prices. If you want to learn more, download your free report here.

Kind regards,

Lachlann Tierney

Daily Reckoning Australia