Kirkland Lake Gold has suspended underground mining at the Stawell gold operations in Victoria, leaving up to 150 workers without a job.
The Canadian company, which recently merged with Newmarket Gold, ceased mining at Stawell today, but said underground exploration would continue during the care and maintenance phase. The mill and pumps will also be kept in operational condition in the event of a restart.
A team of 15 to 20 people will remain at Stawell to maintain the site, monitor the environment and continue exploration. However, Kirkland Lake’s Australian operations president Darren Hall said between 140 and 150 positions would be made redundant.
Hall said the move to suspend operations had been discussed for several years due to declining profitability.
“In 2009 Stawell Gold Mines (SGM) produced more than 86,000 ounces of gold compared with just over 32,000 ounces this year,” Hall explained.
He added that the community had been informed in 2012 that operations would be transitioning due to declining gold production.
“That transition began with a restructure of operations and a major downsizing of the workforce. Through the resourcefulness of our employees we have managed to continue operations for the past four years but the mine can simply no longer produce enough gold to warrant the continuation of mining,” he said.
SGM, Victoria’s largest producer of the precious metal, has been operating in the area for 35 years. The site was originally discovered during Victoria’s gold rush era in the 19th century.
SGM general manager Troy Cole said the site was being maintained in the hope it would reopen.
“There have been some promising results during initial exploration of the Aurora B site, which is on the east flank of the existing Magdala mine. However, we need time to further our understanding of the potential on the east flank,” Cole said.
“It is our hope that the Big Hill open cut mine will be the next project to commence. We remain in consultation with the regulatory authorities to establish an assessment process for the project.”
Cole said employees would receive their full entitlements and be provided with support services.
“We understand suspending underground operations and the subsequent loss of employment opportunities will have an economic impact on Stawell and the surrounding region and we will work with local authorities to mitigate this impact where possible,” he said.
In November, Kirkland Lake merged with Newmarket Gold, another Canadian company, to create a new mid-tier gold producer. Newmarket Gold was the previous owner of SGM.