Shares in Doray Minerals have been hammered on news the company will suspend operations at its Andy Well gold mine later this year.
Perth-based Doray said this morning that, during its assessment of options to combine Andy Well with its nearby Gnaweeda project, underground mining at Andy Well had revealed a reduction in strike length of the Wilber and Judy ore bodies, leaving the company with reduced future gold production and high forecast costs.
“Consequently, the board has made the decision to shorten the mine plan for the Andy Well underground mine,” Doray said in a statement.
“On November 1 2017, mining at the Andy Well operation will be suspended and the mine will be placed on care and maintenance.”
Investors punished Doray, with the company’s share price falling to a seven-year low of 23.5 cents, down 23 per cent on its opening price this morning.
Andy Well began producing gold in 2013, and has since turned up about 300,000 ounces for Doray.
The gold miner said a final investment decision on the Gnaweeda project would be made later in the year, with current studies showing a potential production start as early as June 2018.
The mine plan could also include the use of the processing plant at Andy Well.
Doray’s only operating mine post-November will be the Deflector operation, which began producing in May last year.
Doray acquired the Deflector mine in 2015 through the acquisition of Mutiny Gold.
