Cash-strapped Eastern Goldfields (ASX: EGS) announced the temporary suspension of the Davyhurst gold operation, located 120 kilometres north-west of Kalgoorlie, in Western Australia's Goldfields-Esperance region.
In an official statement, company director Campbell Baird said that the suspension is "prudent" and is part of Eastern Goldfields' strategy to mitigate spending, following an underperforming first half of 2018.
Besides cutting expenses, management is also engaged in a recapitalisation fundraising program. While they do this, the company's securities have been put on voluntary suspension.
Despite the halt at Davyhurst, the Balcatta-based firm said it will continue to produce gold in the short-term by removing all gold-in-circuit. Historic resources at the mine have been estimated in 1.5 Moz contained gold at a grade of 2.3 g/t Au.
However, workers will not continue to set foot on the mine. Approximately 20 operational staff have been made redundant, as have 16 corporate and administrative staff. A number of open-pit and haulage contractors have also been stood down.
The suspension follows two important resignations made public last week. Long-time executive chairman and the company's main shareholder, Michael Fotios, and board director Alan Still decided to leave their posts on August 28, 2018.