A struggling gold price has taken yet another casualty, this time its Alacer Gold which says it cannot guarantee the future of its mines beyond the middle of 2014.
The miner which owns two operations in the Western Australian goldfields, including South Kalgoorlie operations and Higginsville, moved to write $US412 million off their value and leaving the assets with a fair value of $US228.1 million at June 30
In June the company announced it would be pursuing the sale of its Australian assets to focus on its “high margin operations and exploration activities in Turkey”.
Alacer chief executive David Quinlivan told the West Australian there was some interest in the sale process but nothing is firmed up.
Implementing cost reduction measures last quarter which included among other initiatives cutting 130 jobs to make the mines cash flow positive over the next 12 months.
Unless a deal to selloff the mines is secured or the gold price improves Quinlivan said the future of the mines was in doubt from next June.
Reporting season has seen gold miners continue to file massive writedowns off the value of Australian gold assets, with the West Australian labelling it “the impairment party”.
Silver Lake Resources yesterday said it expects to slash between $320 million and $370 million off the book value of its operations; while nickel miner Western Areas announced it expects to be hit by an after-tax writedown of $90 million to $100 million, The West Australian reports.
Silver Lake has also cut costs and halted capital spending. The company cut director fees by 10 per cent and will also impose a group-wide salary reduction of 7.5 per cent.
Newmont Mining last week slashed almost half off the value of its Boddington gold mine, citing a decision to cut its gold price assumption to $US1400 an ounce down from $US1500 an ounce.
"That filters through in terms of the valuation that we use for the impairment," chief financial officer Tom Mahoney said.
In December Newmont valued the asset at $US4.7 billion based on its performance and outlook, however last week it revised its book value by $US2.1 billion.