PERTH (miningweekly.com) – Gold miner Focus Minerals has called a halt to operations at its Laverton gold mine, in Western Australia, saying that the rising processing costs for the toll processing arrangement were making the mine commercially unviable.

The operational cease was also blamed on the falling gold price.

Chairperson and acting CEO Don Taig said this week that the board was currently evaluating options around moving the operation to an exploration-only focus, to rebuild reserves and to drill a number of its highly prospective greenfield targets, as well as exploring a number of other synergistic opportunities that are available in the region.

“The long-term outlook for the gold price, campaign nature of processing, and the escalating processing costs we have been faced with over the past six months at the Granny Smith mill made this a necessary decision for us in protecting the value of the Laverton assets for all shareholders,” said Taig.

He noted that the Laverton landholding, which covers four mines, had some 20-million ounces of combined reserves.

“We are not about to deplete our current reserves base just to break even,” he said.

“The high cost base in the Australian mining industry and the rising mining inflation of the past few years has seen all of the reductions and operational improvements we have been delivering continue to be consumed. These are pressures that are being felt right across the industry and impacting on the competitiveness of Australian mining.”

Taig warned that the high Australian dollar was not assisting business, and said that unless industry participants worked together, the industry was in for a lean period.

Meanwhile, Taig noted that the company’s strategic review was ongoing, with the company exploring opportunities for continued organic growth through the exploration of its assets, as well as acquisition opportunities that could underpin and improve the existing operations, and enable Focus to move to a lower cost base, with improved scale and profitability.

“A framework for this review is our drive to focusing on opportunities for larger-scale, higher-grade orebodies where we have full control over mining and processing, and the ability to deliver significant mine life and sustainable reinvestment in our tenement holdings in good gold-bearing addresses.”