Silver Lake Resources will shut its Murchison gold mine in Western Australia with 127 jobs at the operation to go.
The announcement comes as the company posted a $47 million loss for the six months to end of December.
The gold miner said production and unit costs from the Murchison mine had been disappointing and would instead focus its attention on the profitable, low-risk Mount Monger operation.
Silver Lake managing director Les Davis said continuing production at Murchison was unsustainable at the current gold price, forcing the company to place it into care and maintenance.
"This decision preserves a number of strategic options for the company including recommencing operations in the event of a higher sustainable gold price," Davis said.
"The company intends to focus capital on further optimising and funding growth projects at the low cost Mount Monger operations."
Silver Lake has also launched a $39 million capital raising by way of a placement priced at 60 cents a share.
The company said it would use the cash to cover the costs of mothballing Murchison and for its expansion plans at Mount Monger.
Job losses at the mine will be made up of 42 Silver Lake employees and 85 contractors.