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AngloGold Ashanti’s Córrego de Sítio (CDS) gold mine in Brazil will be placed on care and maintenance after sustained operating losses.

According to the company, CDS has experienced challenging operating results and poor production for the first six months of 2023.

From January to June, it produced 30,000 ounces at a total cash cost of $2278 per ounce, along with negative free cash flow of $30 million.

“The mine has been unable to sustain itself or to fund the capital needed to ensure its long-term future,” AngloGold said in a statement.

“AngloGold Ashanti Brasil, a wholly-owned subsidiary of AngloGold Ashanti, has therefore taken the difficult decision to place CDS on care and maintenance.”

The company said it will take reasonable steps to reduce the number of employees affected by the closure, but said there will be an inevitable reduction in the CDS workforce.

“The company believes that layoffs are always the last resort and has taken reasonable steps to reduce the number of people affected by this transition to care and maintenance, including through the placement of some employees elsewhere in the company where equivalent roles exist,” the statement said.

“AngloGold Ashanti Brasil commits to ensuring this process is undertaken in a manner that ensures all those affected will be treated with dignity and respect, that all legal obligations are met and that stakeholders are kept apprised of all material developments through the process.”

AngloGold is set to disclose the impact of the cessation of production at CDS in its third quarter report in November.

The company recently appointed Richard Jordinson as its new chief operating officer.