Kingsgate Consolidated has announced it will cut staff at its Challenger gold mine as it moves to implement a new mine plan aimed at reducing operating costs as gold prices continue to tumble.
The company said the plan to shift focus to the higher grade Challenger West ore body would reduce mine costs by up to 30%.
The new mine plan has the potential to produce between 70,000 to 80,000 ounces for the next two to three years, the company said.
“The new mine plan is the result of a strategic review of the Challenger Gold Mine in response to recent gold price volatility and the operating performance over the last 12 months,” the company said in a statement.
The miner also announced a $300 million impairment charge due to weak gold prices.
Managing director of Kingsgate, Gavin Thomas, said “the new strategic plan highlights the operational flexibility in the Challenger mine and the opportunity available to adapt to changing market conditions”.
Speaking to Australian Mining Thomas said the cuts to employment would be minimal and affect under ten workers.
“This is tough time and we are not the only ones changing mining plans,” he said.
“Plans that were profitable six months ago are not doing so well now.”
Thomas was confident that the new mine plan was the right move for the company.
“Challenger West is a nice high grade zone,” he said.
A drop in the bullion market has triggered operational reviews of gold miners around the world.
OceanaGold today announced its Reefton mine in New Zealand will be transitioned into care and maintenance mode two years early.