OZ Minerals (ASX: OZL) today announced it was putting its Scuddles mine at Golden Grove on care and maintenance as a cost cutting exercise in its tenuous struggle to obtain a refinancing package from a group of bankers for debts now amounting to about $A1 billion ($US673 million).
Scuddles is the higher cost mine at Golden Grove in the Yalgoo Goldfield in Western Australia's mid north, and OZ Minerals said its closure would improve operating costs at Golden Grove by $A22.1 M ($US14.87 M). The job losses would include 50 employees and 20 contractors - about 8% of the workforce.
Chief executive Andrew Michelmore said the Gossen Hill mine at Golden Grove will remain open but zinc output in 2009 was expected to be cut by 25,000 tonnes to between 55-66,000t, while copper output would increase by 5,000t to between 40-45,000t.
Golden Grove, 220 kilometres east of the mid north port of Geraldton, was discovered by a junior company in the late 1970s led by geologist Joshua Pitt and attracted Amax, EZ Industries and Esso's minerals division, and later the Robert de Crespigny managed Normandy Mining Ltd took full control. After Normandy was taken over by Newmont Mining Corporation, that global gold miner sold it to Oxiana Ltd which last year merged with Zinifex Ltd to create OZ Minerals.
During the Normandy era deeper drilling showed up major new discoveries of lead-zinc-silver and copper.