Balfour, Mpumalanga - Operations have been suspended at Great Basin Gold's Burnstone mine near Balfour, Mpumalanga, the company said in a statement on Wednesday.
“While it is disappointing that operations at Burnstone had to be suspended... the board had to take this step pending the completion of the strategic review process and potential financial restructuring,” interim chief executive Lou van Vuuren said in a statement on Tuesday.
The mine had a remaining forecast lifespan of 25 years.
“The board thanks the many dedicated and hard-working employees and contractors who contributed to bringing this project from discovery to early-stage production.”
The company’s strategic review special committee had recommended that all development and production activities be suspended because Great Basin Gold could no longer supply the working capital necessary to break even.
This would only have been achieved by May next year.
“The company is seeking financing for the immediate costs associated with the shut-down, which are estimated in the range of US30 million to 40 million (about R250 to R334 million).”
It also needed US1.2 million (about R10 million) per month for ongoing maintenance. There was no guarantee the company would get this money.
Van Vuuren was optimistic that the mine would be reopened in future.
“We believe that following the injection of sufficient new capital, this asset will demonstrate its long-term value to investors and employees.”
Several South African mines temporarily suspended their operations or shut down over various issues this year.
In June, operations at Aquarius Platinum’s Everest mine near Lydenburg in Mpumalanga were suspended because of low commodity prices and labour issues.
The company said at the time that work at Everest had been hampered by poor ground conditions and ongoing disruptive industrial relations.
AngloGold Ashanti said earlier this year it had lost 73 000 ounces of gold production due to safety stoppages last year, 50 000 ounces of that was in the final quarter, Business Day reported.
Anglo American Platinum said it had 81 shutdowns last year, three times that of the previous year. - Sapa