Northern Star Resources has terminated its mining contract with Westgold Resources’ contracting business Australian Contract Mining (ACM) on a ‘without cause’ basis.
Mining services by ACM will no longer be provided to the HBJ underground gold mine in the Eastern Goldfields in Western Australia, starting December 23 this year.
Earlier this year, Westgold sold part of its South Kalgoorlie Operations – a collective of smaller companies that includes HBJ Minerals – to Northern Star for $80 million.
The sale was motivated by Westgold’s shift in focus towards the more profitable Murchison assets.
Westgold has been dewatering and refurbishing its Big Bell underground mine in the Murchison region for over two years. Concurrent to the contract termination news, Westgold reported that it has hit its first ore.
The company does not expect a negative impact on its earnings following HBJ contract termination.
Since the sale, ACM has continued to provide mine development and production services at HBJ.
Westgold plans to dedicate the majority of equipment currently occupied at HBJ to expanding its existing operations, and to continue employing a vast majority of both its FIFO and residential personnel.