The recent gold price slump has forced the company to go on maintenance of the mine and plant processing plant.
Tanami made the announcement yesterday, saying the recent gold price slump has pushed them to the decision that up to 150 jobs could be cut as Tanami Gold put their Kimberley-based Coyote mine and processing plant into care and maintenance while a development decision for the company’s 1.04 million ounce Ground rush project has also been deferred.
As part of a wide restructure of the company, Tanami said it would broaden feasibility studies at its Kavanagh deposit "to investigate the options and cost to further upgrade the mineral resource". The company’s shares slumped after the announcement, dropping by 45 per cent. Gold has been on a downward trend, despite a spike in October last year at $1750 an ounce; it has been progressively dropping to pre boom days.
The West Australian reported that the Coyote project was one of the State's highest-cost producers, pouring gold at basic costs of $1220/oz during the December quarter. According to data released last week by CME the average cost of gold production in WA mines has more than doubled in the past six years from $511/oz in 2007 to at least $1100/oz now. The downturn is expected to hit some gold miners hard, especially those who are facing strong headwinds, and working on lower grade ore.Rumors emerged this week that Barrick Gold is looking to sell three gold mines in Western Australia in order to reduce debt and fight-off a credit rating downgrade