P. M. BRIEFING : Prices Slip, Gold Mine Cut Back
Producers at Australia’s largest gold mine, hurting from low gold prices, cut jobs and closed down some high-cost underground operations today.
“It’s a reflection of the difficult times we’re in,” said gold stock analyst Howard Walker at broker J B Were. “There will probably be more suspended or closed over the next few months.”
Joint venture partners Gold Mines of Kalgoorlie Ltd. and Homestake Gold of Australia Ltd. said cash costs of production at their Fimiston underground mines were running at more than $385 an ounce. That compares with current gold prices at around $353 an ounce.
Gold Mines of Kalgoorlie and Homestake, an 80% owned subsidiary of U.S. producer Homestake Mining Co., jointly own the huge “super pit” and five underground mines in Western Australia’s Golden Mile area at Kalgoorlie.
The price of gold is down almost $60 from December levels, and many analysts believe there is little chance of a recovery for the next six months.
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