The closure could affect 280 employees and another 100 contractors in the historic goldmining town.

The closure could affect 280 employees and another 100 contractors in the historic goldmining town. Photo: Jessica Shapiro

VICTORIA'S Stawell goldmine is likely to be closed within two years, despite Canadian company Crocodile Gold spending more than $100 million buying it and another mine in the state earlier this year.

The closure could affect 280 employees and another 100 contractors in the historic goldmining town.

Crocodile executives visited Stawell in recent days, warning staff and the community that the mine was entering a ''transition'' phase.

In simpler terms, BusinessDay believes the mine is unlikely to be operating beyond two years, with all underground work expected to be finished within 18 months.

A further six months of processing stockpiles and rehabilitation work will take place above ground, meaning the mine's 30-year life will almost certainly come to a close in 2014.

Despite gold prices still being at historically high levels - gold was fetching about $US1590 an ounce yesterday - the remaining deposits at Stawell will be sub-economic if developed.

Crocodile executives, including chief executive Chantal Lavoie, strongly hinted during last week's visit that other job opportunities within the company could emerge for the Stawell workers.

Crocodile has two other mines, one in nearby Fosterville - which was acquired at the same time as Stawell - and one in the Northern Territory.

Another ASX-listed gold stock is also enduring tough times, with Navaho Gold revealing its executives would take significant pay cuts as part of a plan to more than halve administration costs from $2 million a year to $900,000 a year. Managing director Mark Dugmore's $240,000-per-year cash salary will be slashed by $60,000, while non-executive directors will limit their fees to $40,000.

The savings will be spent on exploration and other ''in-ground'' costs.

Navaho listed 13 months ago at 20¢ a share but was yesterday trading at 3¢ a share.