Silver Lake closure leaves 120 workers jobless

Murchison Mineral Field Image credit: flickr User: SubiYurek

Silver lake Resources raised $39 million on market on Friday and is planning on using a chunk of the money to place its Murchison mine on care and maintenance, which will see around 120 workers lose their jobs.

Murchison Mineral Field Image credit: flickr User: SubiYurek
Murchison Mineral Field
Image credit: flickr User: SubiYurek

The company announced the placement, underwritten by UBS, as it outlined its plan to close the gold operation.

According to the article on The Australian, Silver Lake Resources will issue 65.6 million new shares, which amounts to about 15% of the shares on issue, at 60 cents a share. Silver Lake will use $12 million of the funds to close Murchison and cover redundancy payments and site reconstructing expenses. Approximately $24 million will be on growth capital at its Mount Monger operation and the rest will be used for general working capital.

According to company officials, the fall in the gold price that occur last year had prevented Silver Lake to secure the required capital to access higher-grade, underground reserves at Murchison. The company stated that the prevailing gold price climate had seriously affected production and unit costs from Murchison and had caused reallocation of capital from higher-value, lower-risk projects in the Mount Monger region.

Silver Lake Resources is a gold producing and exploration company, engaged in gold mining and processing from the Mount Monger Operation, as well as copper and gold exploration and evaluation of projects. The Company’s project includes Mount Monger Goldfield, Great Southern Project and Copper Lakes Project.