The developer of a controversial mine site near Braidwood has halted the project, prompting 10 immediate job losses.
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Blaming the falling international gold price, Uniting Mining Limited announced a three to six month halt for Dargues gold project to the Australian Securities Exchange on Friday morning.
The company said the halt on the project was pending completion of technical studies and funding discussions.
A spokesman said seven employees would remain on the project.
Unity Managing Director Andrew McIlwain said construction of a 3km access road and infrastructure earthworks had been completed and final excavation and ground would be finished next month before underground mining could commence.
"There are many things which contribute to project development, particularly financing, and what has continued to be a problem for the industry is a depressed gold price environment and we still have some regulatory issues in relation to where we end up processing our final concentrate," he said.
"One of the hallmarks of this project is that there is little chemical used at Dargues and the material is taken away for further processing. We’ve had challenges about our path to use a facility at Parkes and similarly in Bendigo where we own a facility."
Mr McIlwain said the company expected formal credit approvals to be in place by early 2014.
"This is not down tools and closing up and never coming back again. This is about how we can reset and finance the project going forward and it’s a temporary suspension of works.
"We’ve also had to go through a fairly arduous and included public exhibition process to modify our proposed plan. That was something that took three months and cost $1 million for no benefit but that’s one of the challenges of working in New South Wales."
Mr McIlwain said staff had been briefed about the job losses before a statement was made to the ASX and that the mine remained a valuable asset.
"It’s probably one of the world’s worst kept secrets. We work on the basis that we employ intelligent people who can probably put the put dots together themselves," he said.
Last month, members of an environmental review committee in the Victorian city of Bendigo said Unity Mining wouldn't have enough money to rehabilitate its inactive sites.
Major's Creek resident Steve Redden said some local residents would welcome the project's halting after the construction period and a number of pollution overspills into local waterways.
"I am not upset that it has slowed down," he said.
"They’ve had a bad history of not following environmental practices as they should… and we’ve been dodging trucks for the past 12 months while they have been building it which has been very dangerous."
He said the job losses were unfortunate but most of the positions had been filled with outside workers experienced in mining.
"We will see what happens with the mine in the future and what happens when significant rain that comes. To date their work to stop the water run off hasn’t been effective, so there’s been run off every time there has been any significant rain."
The Environmental Protection Authority has investigated at least four discharges of sediment connected to the mine this year, causing discolouration and warnings for people not to use the creek.
In June, Uniting Mining told residents the company was not required to have a zero discharge of water and that flows were "designed discharges as per the sediment and erosion control plan."