Why is the Silver Lake (ASX:SLR) share price having such a stellar run of late?

rising gold share price represented by a green arrow on piles of gold block

The last month has been a rewarding one for the Silver Lake Resources Limited. (ASX: SLR) share price and its investors.

In the last 30 days, the gold producer’s value has grown by 14%, giving it a market capitalisation of $1.57 billion. Considering the price of gold has only increased around 4% during this period, there are likely other factors at play.

Keeping that in mind, we take a look at what else has been going on at Silver Lake Resources lately.

What’s been influencing the Silver Lake share price?

There hasn’t been a whole lot in the way of announcements from the gold producer recently. However, sometimes all it takes is a couple of announcements to garner the attention of the market.

On 19 October, the company released its quarterly activities report to the market. On the day, the share price slipped, though it seems investors warmed up to the positive information shared after a bit of time. For instance, the miner reported a record quarterly production of 31,033 ounces at its Deflector site.

In turn, Silver Lake notched up 64,947 ounces of gold produced during the September ending period. This gave the company enough confidence to guide for gold sales of 235,000 to 255,000 ounces for FY22. Simultaneously, the company’s cash and bullion on hand increased $28.4 million, to finish the quarter at $358.6 million.

Shortly after this announcement, Silver Lake Resources also released its annual report for FY21. This provided further insights and commentary for shareholders to peruse. In this report, significant investments by the company for growth were featured prominently.

For example, the upgrade of the processing facility at Deflector and the commencement of a new decline to increase access to other areas of the mine.

While positioning for growth, the company currently trades at a price-to-earnings (P/E) ratio of approximately 15.4 times.

Already, sales targets for FY23 and FY24 have been mapped out following successful exploration. Specifically, Silver Lake is forecasting 255,000 to 275,000 ounces of gold to be produced during these years.

Finally, a further $25 million worth of exploration is budgeted in for FY22. Considering its success so far, investors might be bidding up the Silver Lake Resources share price in anticipation of more good news.

The post Why is the Silver Lake (ASX:SLR) share price having such a stellar run of late? appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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