Jobs to go as Unity to close Henty Gold Mine

At least 150 workers are expected to lose their jobs at Tasmania's Henty gold mine, as owner Unity Mining (ASX:UML) confirmed Tuesday that it will shut the operation by the end of 2015.

Unity deemed the mine no longer feasible after reviewing its first-quarter operational performance.

In a statement, the Melbourne-based company said the review led it to conclude that the best economic outcome for its shareholders is for it to focus on recovering remaining higher margin reserves.

"Accordingly, at currently scheduled mining rates, Henty is expected to have substantially mined these reserves and will transition onto a care and maintenance basis in late 2015," the company said.

According to the Australian Broadcasting Corporation, workers were disappointed but not surprised by the news.

ABC quoted Robert Flanagan of the Australian Workers Union as saying that the workers were "grateful that the company has been honest with them about the future and has put in place a plan which will ensure that as people lose their employment they will receive the full payment of their entitlement."

Opened in 1996, the Henty mine was thought viable for only four years. It was still operating 13 years later, having produced about 1.2 million ounces of gold.

Unity bought the mine in 2009 and invested heavily to extend its life. New discoveries succeeded in replacing diminished reserves, keeping mineral resources steady at 282,000 ounces. But recent drilling has failed to convert resources into reserves in line with the company's expectations.

Still, Unity said that it will keep prospecting in the area and that, depending on what it finds, the company might re-evaluate the mine's future.

"We will continue to aggressively pursue mine financial performance and evaluate other opportunities in-mine, particularly the exciting Darwin South Offset target that is currently being drill tested," Unity's managing director and CEO Andrew McIlwain said.

“Our current plans and budget also include continuing to explore our highly prospective regional tenement package adjacent to and along strike from Henty," McIlwain said. "Any significant discoveries within the region may lead to a re-evaluation of the Henty mine’s future.”