By Amin Kef (Ranger)
Sierra Rutile Holdings Limited (ASX: SRX) has confirmed the suspension of all mining and processing activities at its Area 1 operations, as announced on February 29, 2024. This move comes amidst ongoing market challenges and uncertainty surrounding the fiscal regime governing Area 1 operations.
Approximately 25% of the workforce, including expatriate staff, will receive redundancy notices by the end of March as part of the company’s engagement with the Government of Sierra Leone. This decision was foreshadowed in the commentary of the 2023 Annual Financial Report.
The company remains optimistic about a swift resolution with the Government, hoping to resume operations in conjunction with favorable rutile market conditions. However, failure to reach an agreement may force Sierra Rutile to consider a complete closure of mining operations at Area 1, affecting a significant portion of the remaining workforce and contractor personnel.
Sierra Rutile is utilizing its finished goods inventories to cover statutory termination benefits for redundant staff. Meanwhile, the company is progressing with the definitive feasibility study for the Sembehun project, with results anticipated in April 2024. In the event of Area 1’s closure, a strategic review of the Sembehun project will be undertaken to optimize value for all stakeholders.
This announcement was authorized by the Board for release to the ASX. Sierra Rutile continues to navigate challenges while striving to safeguard the interests of its workforce and shareholders.
