Santa will be the third, shallow, high-grade underground gold mine at the centre after Maxwells and Cock-eyed Bob.
The Santa deposit in the Mount Belches region is part of Silver Lakes' greater Mount Monger operations that include the Daisy Complex, the Aldiss camp and the 1.2 million tonne per annum Randalls processing facility, which is just 22km away.
Silver Lake controls 25km of prospective banded iron formation horizons in the Mount Belches region.
The BIF presents as a silicate/oxide-facies unit with overprinting sulphides.
Silver Lake revealed in August that Santa had reserves of 257,000t grading at 3.5 grams per tonne gold for 29,000 ounces, with a production area identified underneath the pit floor at Santa North in the Santa West limb.
The broader mineral resource of the Santa area, of 5 million tonnes grading at 2.8gpt gold for 454,000oz will likely be converted from resource to reserve after more drilling.
Silver Lake will spend $2.1 million on underground access and site services and a further $2 million on underground infrastructure to get Santa up and running.
Construction is expected to take place over a two-month period, with underground development to start in the fourth quarter of 2020.
Once in operation Santa is tipped to deliver around 1800oz in the first year then 26,000oz the next.
This will boost total production from the Mount Belches mining centre to 70,000-75,000oz per annum.