Shares in mid-size gold miner Silver Lake Resources Limited (ASX: SLR) have been on a roller coaster ride in the last few months, rising from a 52-week low of $0.35 and gaining many new shareholders along the way.
For those new owners, as well as existing ones, here are three important points you must know about Silver Lake for the year ahead:
1. Dumped from the ASX top 200
A beaten-down share price means Silver Lake has been relegated from the ranks of the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) along with six other companies in the latest market ranking recalibration. This will impact the company's exposure to larger institutional investors and potentially result in less analyst coverage going forward.
Silver Lake was not the only one. Alacer Gold Corp. (ASX: AQG) was also dropped from the top 200, while Newcrest Mining Limited (ASX: NCM) was booted from the S&P/ASX 20 Index and replaced with Insurance Australia Group Limited (ASX: IAG).
2. Capital raisings
Silver Lake's success with minimising costs has come at the expense of the company's Murchison mine which last month was put into care and maintenance until the price of gold makes it more economical.
Care and maintenance is expected to cost a hefty $120,000 per month in addition to one-off costs for site redundancies and contract restructuring. As a result Silver Lake set out to raise $39 million by issuing 65.6 million new shares, $12 million of which will be put towards the Murchison costs.
However this will add an additional 15% to the number of outstanding shares. Investors should be aware of this when comparing per-share metrics like earnings per share (eps) to previous years.
3. Still no bank debt
The up-shot of the capital raising is that it will allow Silver Lake to keep its debt to controllable levels. The company has no bank debt and relatively minor lease and loan liabilities on the balance sheet.
This is ideal given the potential for ongoing fluctuations in gold price and the cash position will be further supported by the company's sale of its 19.9% stake in Phillips River Mining Limited (ASX: PRH) for $135,000.
Foolish takeaway
There can be a lot of information to come to terms with for new and existing company shareholders. Knowing the debt situation, market position and change in outstanding shares will help you better understand how Silver Lake Resources is set for the year ahead.
