JUNIOR base metals producer Kagara’s ongoing financial woes have forced the company to suspend mining at its last operational Queensland mine.
The recent suspension of the Kagara’s Balcooma mine and Mt Garnet polymetallic processing circuit came just one month after it was savaged by the market in March – its shares slumped nearly 39 per cent in one day – on news that it was halting other key Queensland operations, lowering its production forecasts, suspending development of an underground mine and stopping all exploration activities.
The move resulted in 130 job cuts in March and April, as the miner suspended operations at its Baal Gammon open pit and placed its Thalanga mine and processing plant on care and maintenance.
In its December half-year financial report released in March, the company reported a net loss of $48.9 million – a stark contrast to its $2.22 million profit for the previous corresponding period – citing plummeting metals prices. Kagara reported that it would need to secure additional finance or realise sufficient funds from the sale of its non-core assets to remain a going concern.
The company received a cash injection in March following the $68 million sale of its prospective Lounge Lizard nickel deposit to fellow miner Western Areas, as it struggled to refinance a $40 million ANZ debt facility.
The company told The Australian Financial Review in late April that it had also been exploring the possible sale of its 62.1 per cent holding in Mungana Gold Mines.
By Reuben Adams