Gold miner looks to freeze wages, shorten mine life

Australian gold miner OceanaGold is considering freezing wages for hundreds of mining employees at two of its New Zealand mines.

The dropping gold price is forcing the miner to evaluate operating costs at its Macraes mine in Otago and the Globe Progress near Reefton on the South Island, stuff.co.nz reports.

One consideration reportedly on the table is reducing the mine life of the Globe progress mine.

The company said it is reviewing its mine plans and has about 800 employees and contractors at the two mines.

"We're looking to minimise the amount of capital expenditure, particularly on re-stripping for future production, and we're also looking at wages freezes and reviewing all discretionary expenditure to reduce unit operating costs,” the company said.

"We will update the market on Reefton within the next six weeks but can expect that the mine schedule will likely reflect a shorter mine life with these new economic realities.

Managing director Mick Wilkes said no operation would subsidise the cashflow of another and that each mine had to support itself.

"We will ensure the New Zealand operations remain cashflow positive after sustaining capital expenditure and only spend capital that is absolutely necessary to meet the production plan," the company said in a report.

Gold has fallen below the $US1300 mark, this morning trading around $US1294 an ounce.

A drop in the bullion market has triggered operational reviews of gold miners around the world.

Gold giants Barrick Gold and Newcrest have both moved to layoff staff and cut operational expenditure.

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