Kinross Gold Corporation announced suspension of operations at Lupin mine Aug. 13.
Efforts by Lupin employees to cut costs were successful, but the strengthening Canadian dollar wiped out the gains by adding to production costs.
In a news release, the company said its gold production for the five months ending June 30, was 44,318 ounces at a total cash cost of US$410 per ounce. The current market pprice for gold is hovering close to US$352 per ounce.
"We were very aggressive in attempting to reduce the costs and it was providing a short-term benefit," said Ted Rutherglen, manager of human resources at the mine.
Rutherglen said the shutdown is a "mode of suspension" and added that "everything has to be reassessed." The company will review alternatives for the mine, including extraction of its gold-rich crown pillars. They contain an estimated 110,000 ounces of gold.
Lupin mine first opened in 1982 but closed for care and maintenance in 1998 and reopened late in 1999.
"At that time the mine was still Echo Bay (managed), but I believe that shutdown was due to the economic conditions and the low cost of gold at the time," said Rutherglen.
The total number of employees affected is 235 plus an additional 70 contract workers. Forty are residents of the Northwest Territories and Nunavut.
The employees at the Lupin mine are non-union. Rutherglen said the company is "taking care of them, they are being treated fairly."
Rutherglen was also sketchy on site reclamation plans, should this be Lupin's final act.
"Whatever is required under the statutes we will follow. Our environmental people will be talking to the proper authorities," he said.
Keith Peterson, mayor of Cambridge Bay which is home to some Lupin workers, said this closure will have less impact on the community.
"Nowadays there are other mines with BHP and Diavik so it's less of an impact than if it was the only employer," said Peterson.
"When the mine opened we all thought it would only last 10 years," he said.
"Here we are 25 years later. It gave us a lot of good years and they've been good corporate citizens. They've put a lot of food on the table over the years."