PERTH (miningweekly.com) – Gold miner Silver Lake Resources has unveiled a range of cost saving initiatives as it battles against the declining gold price.

Earlier this month, the Australian junior announced that it would be deferring the development of its Murchison underground mine by some 12 months to optimise the mine to produce gold from openpit operations.

During its results presentation for the quarter ended June, Silver Lake announced that it had deferred all expansionary capital, while reducing exploration expenditure to A$7.5-million with a focus on short-term, high-impact outcomes.

The company also said it had reduced staff and contractor numbers to 24, and that it would progressively change over its Randalls operation to a residential workforce, rather than a fly-in, fly-out workforce.

Silver Lake simultaneously lowered its directors’ remuneration by 10%, cut staff salaries across the board by 7.5% and imposed a salary freeze for at least the next 12 months.

The gold miner was also renegotiating its services and materials contract, as well as its mining contractor input costs.

Meanwhile, Silver Lake announced a possible impairment charge of between A$320-million and A$370-million, reducing the book value of the assets from A$830-million to between A$460-million and A$510-million.

During the three months to June, Silver Lake reported a record group production of 55 600 oz, resulting in an 83% increase over the group’s full-year production, taking it to 151 296 oz.

The increase in production was driven by a quarterly production of 43 196 oz at the Mount Monger operation and 12 404 oz from the Murchison mine, which started commercial production in June this year.

“Under the current budget and with prevailing gold prices, guidance for the full 2014 is between 180 000 oz and 200 000 oz of sold gold,” Silver Lake told shareholders.

The Mount Monger mine was expected to produce between 120 000 oz and 130 000 oz of these ounces, while the Murchison mine would produce between 60 000 oz and 70 000 oz.