Gold miner announces production reduction

Gold mining company Mintails has announced a production slump after two consecutive gold pours were below expectations.

The ASX-listed company said its production failed to break even as a result. It expects this to continue in the short term.

“The lower production has had an adverse impact on the company’s outstanding creditor position, with Mintails at times exceeding agreed terms with critical suppliers,” the company said in a statement.

“Management are maintaining a dialogue with these suppliers, who continue to support the company at the current time.”

The company said it is currently in discussions to obtain urgent short-term funding to support its working capital position during the production shortfall.

It is still trying to isolate the causes for the shortfall.

The company could not be reached for a comment.

The company previously issued a statement in March saying their production took a hit due to a severe storm at their Mogale Gold facility.

They faced a shortfall of about 20 kilograms for February.

Gold prices tumbled to its lowest level in nearly three weeks overnight, dipping to $US1281.80 an ounce amidst rumours the Federal Reserve will scale back U.S. bond purchases.

This is the sixth slump in a row.

Falling gold prices have resulted in multiple job cuts in the gold mining industry, with prices slipping more than 20 per cen this year.

Despite this, the World Gold Council told Diggers and Dealers mining conference gold prices will go up over the long term because of demand from India and China.

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