Parent company, Petromin Holdings Ltd (Petromin), has announced that the mine in the Goilala hinterland will be closed this month.
Petromin managing director Thomas Abe said the mine was unable to produce enough gold each month to cover costs.
“Petromin itself is facing new pressures with a pending restructure significantly affecting income and the cash drain from Tolukuma has adversely affected Petromin’s balance sheet to the point that it can no longer keep supporting operations,” he said.
Abe said Petromin would ensure all 320 employees of TGM would receive their full entitlements.
McKinstry said the company would not discuss the total expenditure on mine closure publicly.
“The costs involved are largely those of making the workforce redundant,” he said.
“TGM has negotiated a severance package with employees which we (TGM) won’t disclose publicly.
“The package takes into consideration that most of the workforce is locally based, and the lack of road access to the district makes getting new jobs extremely difficult.”
McKinstry said Petromin was closing down operations and putting the site under care and maintenance.
“It will remain under care and maintenance until Petromin has exhausted all avenues for a sale of the mine.
“Other costs involved are those involved in keeping the plant and machinery in good order, while potential buyers are sought.
“This will involve a small team of people with specialist skills, which will be supplemented with casual labour from locals as needed.”
He added that during care and maintenance period, TGM would be working on providing the Mineral Resources Authority (MRA) a mine closure plan.
“The plan will formally detail the work and costs involved in decommissioning and rehabilitating the mine site – should it be necessary,” McKinstry said.