Focus halts all mining operations

Three months after shutting down its Laverton gold mine, Focus Minerals has announced the closure of its remaining mining operations near Coolgardie due to the weak gold price.

The suspension of mining will result in 65 job losses.

Focus said in April, when it closed Laverton, that it was targeting a 20 per cent improvement in productivity at Coolgardie, to make the operation commercially viable.

In pursuit of that goal, it put in place a new management team, but they were not able to achieve sufficient improvements to save the mine.

"Despite some significant improvements in mining and processing performance in recent months that the new management team at Coolgardie achieved, the Coolgardie operations in their current guise are unviable in the current economic environment," chairman Don Taig said today.

"Given the recent gold price instability, we are simply in a position where there is currently insufficient high grade ore available at Coolgardie to ensure profitability at these prices."

Focus produced 12,581 ounces of gold at Coolgardie in the June 2013 quarter, with a cash cost of $1,899 per ounce.

That was below the extraordinary March quarter figure ($2,408/oz) but much higher than one year earlier ($1,189/oz) and meant Focus was still one of the highest cost producers in WA.

Mr Taig noted that Focus had one of the largest bank balances of any gold miner on the ASX ($114m cash plus equivalents) and the backing of Shandong Gold.

He said the company would target larger-scale, higher-grade ore bodies were it has full control over mining and processing.

It joins a string of gold miners in WA that have either halted mining, cut staffing or halted development projects.

Focus shares closed today at 1.5 cents, down from a 12-month high of 4.4 cents.