The decision follows a strategic review that began in February.

"Despite some significant improvements in mining and processing performance in recent months that the new management team at Coolgardie achieved, the Coolgardie operations in their

current guise are unviable in the current economic environment," Focus chairman and acting chief executive officer Don Taig said.

“Given the recent gold price instability we are simply in a position where there is currently insufficient high-grade ore available at Coolgardie to ensure profitability at these gold prices.

“We cannot jeopardise or risk our strong cash position by continuing to operate mines that cannot be profitable on a sustaining basis.”

The company’s June quarterly showed that Coolgardie produced 11,993 ounces of gold at unsustainable C1 cash costs of $A1899 an ounce, though both figures were a substantial improvement over the March quarter.

Taig said the decision was about preserving cash as Focus had one of the largest bank balances of an Australian gold company – $114.2 million at the end of June.

But cash inflows during the quarter were $26.8 million compared to cash outflows of $54.3 million.

"Our goal is to ensure that we use our capital wisely, leveraging our strong financial position in a market that is already presenting growth opportunities," he said.



"We aim to create long-term wealth for shareholders by identifying larger scale, higher grade orebodies where Focus has full control over mining and processing and the ability to deliver significant mine life and sustainable reinvestment in tenement holdings.

"This is something we can achieve by ensuring we preserve the cash in our business to enable us to explore our current assets or pursue any synergistic acquisition opportunities that could add value to our existing land holdings.”

The suspension will affect 65 jobs.

“As stated in our last quarterly, we changed the management at the mine and they have made a difference but unfortunately the external factors have required us to make this change,” Taig said.

“The improvements already identified will be recorded to be leveraged from in the future.

“We will be offering our fullest support to all our employees impacted by this transition."

Focus shares closed 7% up to 1.5c, though the announcement was made after market close.