Brief: Homestate suspends mining, lays off 46

Friday, Jan. 29, 1999 | 11:29 a.m.

The designation means gold mining operations will end immediately, and the company will lay off 46 employees. Ore processing operations will continue with 18 employees.

The company will take a $2.6 million charge in its December 1998 quarter to write off its 50 percent share in the Pinson mine. The other half of Pinson is owned by Barrick Gold Corp.

Homestake, based in San Francisco, said it was closing Pinson due to low gold prices and persistent production shortfalls. In 1998, Homestake's share of Pinson totaled 17,300 ounces of gold. The closure will reduce the company's 1999 production by about 20,000 ounces, but will not have a material impact on reported cash costs per ounce.

Homestake and Barrick plan to continue exploration activities at the Pinson site. The mine has about 340,000 ounces remaining in mineralized form. Homestake produces 2.5 million ounces of gold from 16 operating mines each year.

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