Silver Lake Resources (ASX: SLR) share price jumps on year 21 earnings

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the Silver Lake Resources Ltd (ASX: SLR) The stock price turned green on Wednesday morning as the gold mining company announced its results for fiscal year 21.

As of this writing, the company’s shares are trading at $ 1.35, up 1.89% from yesterday’s closing price.

Let’s investigate further.

Siliver Lake Share Price Rise on EBITDA and Earnings Growth

The company demonstrated several areas of progress in its FY21 earnings report, including:

  • Gold production of 249,177 ounces of gold equivalent with gold sales of 248,781 ounces and copper sales of 1,724 tonnes.
  • Revenue for the year to $ 598 million from the sale of 255,573 ounces of gold equivalent, up from $ 563 million a year ago.
  • 12% increase in normalized EBITDA to $ 290.8 million (FY20: $ 260.1 million), with a 6% increase in the group’s EBITDA margin to 49%.
  • Normalized earnings before taxes (PBIT) 6% increase to $ 141.3 million, from $ 133.2 million in FY20.
  • Available tax losses of $ 323.3 million as of June 30, 2021, compared to $ 419.9 million in FY20.
  • Statutory net profit after tax (NPAT) of $ 98.2 million.

What happened in fiscal 21 for Silver Lake?

In a positive for the Silver Lake Resources share price, the company posted 12% year-over-year growth in EBITDA and 6% in pre-tax profits for fiscal year 21.

In addition, the company met its full year guidance “despite difficult conditions” in WA throughout FY21.

The company also recognized sales of 248,781 ounces of gold, which was in the upper range of expectations, according to its statement.

As a result, Silver Lake’s cash and bullion rose 23% to $ 330 million as of June 30, without debt.

In addition, capital expenditures were $ 172 million for the year, compared to $ 106 million the year before. The increase was underscored by additional mining developments at its Rothsay site and upgrades to its Deflector mill.

Sales also posted an increase of 6.2% for the year. Silver Lake attributes the increase in revenue to the “improvement in commodity prices” achieved throughout the year.

In addition, the group sold several non-strategic assets during the year. These include the Fingals and Rowe gold projects, as well as the Andy Well and Gnaweeda sites, where the group recorded a profit of $ 7.5 million and a loss of $ 3.7 million, respectively.

What did the management say?

In their report, Silver Lake management said:

The Group’s operations over the past 12 months have been disrupted by COVID-19, however, the Company has adapted and mitigated, to the extent possible, the risks posed by this infectious disease. Given the industrial environment in which Silver Lake operates and the Company’s strong debt-free balance sheet, Silver Lake will continue to actively pursue its exploration, production and growth objectives, subject to the evolving and unforeseen impacts of COVID-19.

In addition, regarding Silver Lake’s strategy and vision for growth, he added:

The Group’s short and medium term strategy is to deliver superior returns to shareholders by positioning Silver Lake as one of the leading gold stocks on the ASX with a balanced portfolio of operations and growth projects. To achieve this strategic goal, the Company must become larger, have a longer lifespan and lower costs.

What’s next for Silver Lake Resources?

Silver Lake forecast for fiscal 22 in the 235,000 to 255,000 ounce range at an all-inclusive sustaining cost (AISC) of $ 1,550 to $ 1,650 / ounce.

Additionally, the company will drive progress on its Rothsay site, pushing Link Reader to move to the “North Decline” position to be completed within the next year.

Additionally, Silver Lake estimates that Rothsay will provide a 10% increase in milled grade to “support a 10-20% increase in Deflector gold sales” during FY22.

As a result, this ramp-up at Rothsay will lead to a build-up of stocks “for the first time in history” at its Deflector operation.

Silver Lake Resources share price is below S & P / ASX 200 Index (ASX: XJO) by about 25% over the past year.

To illustrate, Silver Lake shares have posted a 26% loss this year to date, extending the 44% loss of the previous 12 months.