PERTH (miningweekly.com) – Gold miner Focus Minerals on Friday unveiled its net three-pronged operational plan following the suspension of mining operations at its Coolgardie and Laverton gold operations.

The company stated that, irrespective of the gold price over the next two years, it would focus on margins achieved from mining and processing its gold resource, to maximise the end result for shareholders.

“We have spent a considerable amount of time on restructuring the business to achieve this aim and locking in a business model with a much lower fixed cost base and with people that can manage this new business environment,” said chairperson and acting CEO Don Taig.

The first tier of the new operating model would focus on establishing a new, low-cost operating structure, and would see Focus establishing an outsourced business model for its operations.

Systems that would be outsourced would include payroll, company secretarial function, human resources and investor relations.

“We intend to outsource as much of our operation as is logical, which will include all mining services on a future return to production,” Taig said.

The company has also moved to arrest overhead spend by freezing salaries, and reducing board salaries by 10%. Taig has also volunteered for a 33% reduction in his per diem rate as acting CEO.

Focus, furthermore, carried out an independent review of its carrying values, and was expected to report a write-down of A$84.9-million for the financial year ended June.

The second tier of the new operating model was to leverage Focus’ financial strength to pursue targeted business development opportunities.

“The most important principle for any business development opportunity is that it must create sustainable value for shareholders. Over the last few years, Focus has not consistently created value. Investment timing and some internal resource allocation decisions, and the massive fall in the gold price have contributed to this,” Taig said.

He noted that under the new model, stringent criteria would be used to assess projects, including that the projects had to be economical over a range of gold prices, they should be synergistic to existing operations, and should be assets that were in, or very close to, production.

The final tier of the new operational plan would be to focus on leveraging the company’s capital to either develop the current assets with the aim of returning them to production, or to sell these assets.

At the Coolgardie asset, Focus reset its exploration goals and was now targeting high-grade reserves to build future production.

“Critically, we are targeting future ore reserves at Coolgardie that are of sufficient high grade to safeguard the operation against future down-turns in the gold price. Our exploration plan has been designed with a view to restarting operations within two years,” said Taig.

While adding ounces to Coolgardie, Focus would also look to monetise the Three Mile Hill mill by processing third-party ore.

At the Laverton operation, the gold miner would look at a multi-option approach aimed at pursuing business development opportunities in parallel with greenfield exploration.

On the exploration front, Focus had developed a conceptual model to develop a set of priority targets that had the best opportunity of discovering large-scale, high-grade deposits.

The company would pursue nine priority target areas in Laverton.

In conjunction with this, Focus would also actively pursue either strategic acquisitions in the region, or would enter into joint ventures that would assist in unlocking the value of the Laverton assets.

“With a low-cost operating model moving forward, some smart acquisitions, a high-grade focus at Coolgardie, multiple options around our Laverton business, a strong cash balance and the support of our cornerstone investor, Focus is well positioned to pursue its vision of returning to production as a low-cost, high-value gold producer,” Taig said.