KALGOORLIE (miningweekly.com) – Metals miner Straits Resources on Monday announced that it would place its Mt Muro mine, in Indonesia, on care and maintenance.
Over recent months, Straits has been aiming to progress the Mt Muro operation to positive cash flow, by redesigning the mine plan to reduce waste movements without affecting gold production, and stepping up community and government engagement.
However, Straits MD Andre Labuschagne said on Monday that a number of unforeseen challenges had impacted the timing of the Mt Muro project becoming cash-flow positive, including the falling gold and silver prices and the impact of illegal miners.
This incident culminated in a June 29 incident where illegal miners caused damage to several buildings, vehicles and equipment.
As a result, Straits reported on Monday that the board was of the opinion that the company was no longer in a position to continue providing material funding support to the Mt Muro mine, and has placed the operations on care and maintenance.
Furthermore, Straits was actively seeking to dispose of the asset as soon as possible.
Labuschagne, said the decision to place the Mt Muro operation on care and maintenance, and to seek buyers for the asset, was not taken lightly.
“Our first preference has always been to try to turn the operation around. However, a weak pricing environment and the recent disruptions on site have impacted our ability to continue to fund the mine until the operations can become cash self-sufficient.
“The board has decided that the continued allocation of material funding to the Mt Muro operations could potentially risk the future of the group, and has made this difficult but necessary decision in order to conserve shareholder value.”
Labuschagne noted that the company was focused on finding potential buyers for the asset, and was in preliminary discussions with several parties.
“Straits’ focus is now squarely on its copper portfolio, led by our flagship Tritton mine, which has improved significantly over the last six months and exceeded its production guidance over the March quarter; and the prospective Temora development project.
“We continue to work to optimise the Tritton mine with a focus on productivity improvements and cost reduction strategies, and are working with our financier in Tritton on solutions to restructure and re-profile the existing copper swap arrangements.”