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Why the Silver Lake share price rocketed 12% higher today

The best performer on the ASX 200 index today has been the Silver Lake Resources Limited (ASX: SLR) share price.

The gold miner’s shares surged a massive 12% higher to $1.03 following the release of its quarterly update.

What was in the update?

Silver Lake has had a strong start to FY 2020. It produced 61,929 ounces gold equivalent at an all-in sustaining cost (AISC) of A$1,260 per ounce.

A key driver of this was its Mount Monger operation. It produced 36,058 ounces at Mount Monger thanks to higher mined grades across all underground mines.

Supporting this was the Deflector operation. It produced 25,871 ounces of gold equivalent, with record monthly mine production in September. Furthermore, management revealed a new quarterly mill throughput record. This follows the record production reported in the June quarter

The company sold 56,683 ounces of gold and 613 tonnes of copper during the quarter for an average price of A$1,995 per ounce. This means an ASIC margin of A$735 per ounce.

In light of this, the company’s cash balance continued to grow despite spending $5.4 million on exploration. At the end of the quarter its cash and bullion had increased by $24.1 million or 18% to $155.2 million.

Pleasingly, this strong start to the year means Silver Lake is well-placed for the remainder of FY 2020. So much so, management expects to hit the upper end of its sales guidance of 215,000 to 230,000 ounces of gold equivalent. This is expected to be done at an average AISC range of A$1,375 to A$1,450 per ounce.

Overall, I thought this was a strong quarter from Silver Lake. As a result, I can’t say I’m surprised to see its shares charging higher even when its peers are tumbling lower. Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) shares are both down over 1% today after the gold price sank lower overnight.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.