Canada-based metal mining company Ivernia has announced the wind-down of the Paroo Station mine, 30km west of Wiluna in Western Australia (WA) for care and maintenance, in view of weak London Metals Exchange (LME) lead prices.
The LME lead price is said to have reached a high of $2,269 per tonne on 28 July 2014 and has since deteriorated 23%, trading at levels not seen since June 2012.
Ivernia's decision to shut the mine to preserve and protect shareholder value is expected to lead to a loss of more than 200 jobs.
Ivernia said that it will initiate a safe and orderly scaling back of activities soon and move the operation to care and maintenance.
Expected to remain in compliance with all operating permits, Paroo Station mine will be poised to return to full production once price conditions improve.
Ivernia president and CEO Wayne Richardson said: "Despite record production and sales in 2014 and the progress we have made to reduce costs and improve efficiencies at the mine, the current LME lead price has dropped well below sustainable levels and cannot support profitable ongoing operations.
"In order to protect shareholder value and conserve the viable deposits of our ore body, the decision has been made to place the mine on care and maintenance until further notice."
As part of its updated life-of-mine plan, the company will revise its resource and reserve estimates and estimated mine life in view of factors, including depletion from mining activities, data from the in-fill drill programme, revised assumptions and methodologies for the geological model such as cut-off grade and a revised cost structure.
Paroo Station is 100% owned by Rosslyn Hill, a wholly owned indirect subsidiary of Ivernia.