Exploration firm Mount Magnet South has shelved plans to develop its Kirkalocka gold project in the northern Goldfields, in response to the falling gold price and generally challenging conditions in the resources sector.
The Perth-based company said recent negotiations with potential project financiers had been progressing well, but prevailing market conditions meant development of the mine in the short term would not be feasible.
Mount Magnet South, which is chaired by former Aspen Group chairman Reg Gillard, will focus on exploring its Jumbulyer project over the coming months.
The company also kicked off a cost savings program today to reflect its change in focus, slashing jobs and executive salaries.
“The board believes a prudent and disciplined approach during this period of difficult market conditions will ensure the company remains well positioned to unlock the substantial value in the company’s asset base,” Mount Magnet South said in a statement.
At close of trade today, Mount Magnet South shares were up 66 per cent, at 2 cents.
