The majority of troubled miner Kagara’s 325 workers are likely to lose their jobs this week after it went into voluntary administration.
Taylor Woodings administrators will try to keep the company a going concern but the miner is losing money and cannot afford to keep operating its three base metals mines.
Mining has been stopped at its Balcooma, Thalanga and Mt Garnet operations in Queensland while its shares have been suspended from trading since April 20.
Administrators spoke to staff on Monday in both the Perth office and in north Queensland, administrator Michael Ryan told AAP.
Kagara cut 130 jobs seven weeks ago, reducing its numbers to 350.
A small care and maintenance workforce will be retained for the mines and equipment.
Administrators investigate the affairs of a company and look at options available to restructure its affairs.
“The reason (for going into administration) is liquidity … insufficient liquidity to restructure its affairs without the protection of voluntary administration,” Mr Ryan said.
He said Kagara’s directors appointed administrators because they believed that with the necessary breathing space afforded by voluntary administration they would be able to restructured the company to deliver a good outcome for all the stakeholders.
“Kagara has a portfolio of high-quality, sought-after assets including strategic mines, processing operations and exploration projects in Queensland and Western Australia,” Mr Ryan said.
The company exited nickel mining earlier this year when it sold its Lounge Lizard operation to Western Areas for $68 million, less than half its initial asking price of almost $200 million.
Cash from that sale went to paying creditors.
The company has blamed falling zinc and copper prices, increased production costs and a strong Australian dollar for its poor outlook and a $49 million first half loss.
A creditors meeting will be held on May 9.
The company’s shares have plunged by more than 68 per cent and dropped from a market capitalisation of about $248 million to about $95 million in the past three months.
On January 27, the company’s shares were trading at 38 cents but had dropped to 12 cents when they were suspended from trading 10 days ago.
