12/04/2012 - 11:32

Kagara stops work at Qld mine

12/04/2012 - 11:32

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Shares in Perth-based miner Kagara have sunk to a new low of 12 cents, after it suspended operations at its Baal Gammon base metals project in Queensland.

Kagara announced today it had downed tools at Baal Gammon after a “restructure of its banking arrangements” negatively impacted its short-term cash flow.

The suspension of operations at Baal Gammon is temporary while the company “completes the restructure of its business and working capital”, Kagara said.

“Stockpiled ore is still being transported to Mt Garnet and milling operations of copper and polymetallic ore at Mt Garnet remain unaffected,” the company said in a statement.

Kagara continues to maintain contact with suppliers and is appreciative of their support during this period.”

The news comes just weeks after investors abandoned the Perth-based miner when its shares emerged from a trading halt on March 7, its share price falling from 31 cents to 19 cents that day due to the poor outlook for copper and zinc prices.

It has also suspended operations at its Thalanga and its developing Mungana underground mines and has halted exploration until conditions improve.

Kagara also reported last month it would shed 130 jobs from its Perth office and North Queensland operations, after posting a $49 million first half loss.

Kagara posted a profit of $2.2 million the previous corresponding period.

The company exited nickel mining in February, when it sold its Lounge Lizard operation to Western Areas for $68 million, less than half its initial asking price of close to $200 million.

The nickel price slumped late last year and has since rebounded slightly but is nowhere near its historical highs.

By close of trade, Kagara stocks were trading at 12 cents, down 14.3 per cent on the day.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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