Focus mine closure adds to gloom

Jarrod Lucas Kalgoorlie-Boulder

Chinese-backed Focus Minerals yesterday closed its second mining operation in as many months, sacking 22 workers as the Mount underground gold mine near Widgiemooltha was shut down.

The move comes after last month's decision by Focus to stop mining at its Laverton operations, costing 50 jobs.

Focus has battled to keep a lid on group production costs - hitting $1893 an ounce in the March quarter - and last year closed its high-cost Tindals underground operations at Coolgardie.

It played down the closure yesterday, saying the mine contributed just 4.6 per cent to group production of 185,767oz last year.

The closure is not expected to affect Focus' Coolgardie operations, which employ 100 workers across the Greenfields, Dreadnought and Big Blow pits and its 1.2 million tonne per annum Three Mile Hill plant.

Focus, in which China's Shandong Gold holds a 51 per cent stake after completing a $225 million share placement last year - posted a half-year loss of $27.4 million in February when the company removed chief executive Campbell Baird.

Focus shares were unchanged at 1.2¢ yesterday, down from 4.4¢ when the Shandong deal was announced in September.

The Mount's closure represents the latest operational pull-back by Goldfields producers since the gold price's dramatic fall in April caused havoc.

The gold price bottomed out at $US1329/oz in April and was trading at $US1383.60/oz yesterday.