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08/07 - Majors Creek goldmine remains under funding cloud

The owners of a goldmine under development near Majors Creek east of Canberra will halt their Tasmanian operations next year.

Unity Mining will mine out its remaining ore at its Henty goldmine over the next 18 months, leaving 150 workers out of a job when operations stop and the mine is put on care and maintenance status.

Investor relations manager Ben Hill said this did not change the status of Dargues mine near Majors Creek, where development stopped in November last year.

The Henty operation stopped because exploration over the past 12 months had not been able to fine more ore.

A road has been sealed to a box-cut entrance of the proposed underground mine at Dargues. But finance and a location for processing the final ore are yet to be resolved.

Mr Hill said Unity’s second largest shareholder, Singapore-based Liongold, had not yet fulfilled an agreement to buy more stock.

“They had committed to do that in March and pay a further $2.37 million to us. They haven’t yet made that payment and have had some delays at their end at raising further capital to enable them to do that.’’

Dargues mine’s previous owner, Cortona Resources, had announced in 2012 securing $42 million from Deutsche Bank to begin developing the underground mine and later announced a merger with Unity Mining to create a $90 million company to kick off the project, which has an initial six-year timeframe.

Unity has been proposing to take ore from Dargues to its processing plant at Bendigo for final processing. Mr Hill said the Victorian government had recently announced it would not require any further approvals for that to happen.

“But we think there are probably other economically superior options available to us, but we are still chasing those down.’’

In the meantime, a couple of people were on site at Dargues monitoring its environmental commitments and securing the site.

Mr Hill expected it would take 12 months to strike the mine’s first gold from the point they restarted development activities. But a start date was still unknown.

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