Straits Resources puts Indonesian gold mine for sale

Straits Resources (ASX:SRQ) has announced that it will put its Indonesian Mt. Muro mine on care and maintenance, as the company focuses “squarely on its copper portfolio.”

Mt. Muro has been causing the miner grief for some time now mainly due to weak gold prices and illegal mining operations which caused property damage in late June.

Before today’s announcement, the Australian company had been trying to salvage the mine by cutting costs, redesigning plans and engaging with the community and governments.

“Our first preference has always been to try to turn the operation around,” Andre Labuschagne, the company’s CEO said in a statement. However, “the Board has decided that the continued allocation of material funding to the Mt Muro operations could potentially risk the future of the group, and has made this difficult but necessary decision in order to conserve shareholder value.”

Straits will now begin looking for buyers and says it is “actively seeking to dispose of the asset as soon as possible.”

The site is located on the Kalimantan magmatic arc which includes the Kelian, Mt Muro and Mirah gold deposits. Production in 2011 totaled over 180,000 tonnes of ore.

As part of its mine contract, Straits is required to offer 51% of the company for purchase to the Indonesian government or locals.