Thistle likely to cut jobs at President Steyn

With a recent corporate restructuring out of the way, Thistle Mining (THT-T) is turning its attention to the high-cost President Steyn gold mines in South Africa’s Free State. Thistle could eliminate as many as 2,000 jobs, or almost 40% of the labour force employed at the underground operation.

The company recently entered 60-day negotiations with the Union of Mine Workers and Solidarity with the aim of limiting job loss, and the details associated with massive job cuts, including employee selection criteria and severance terms.

“Although management is committed to exploring all alternatives, job losses may be unavoidable,” the company said in a statement.

Thistle can’t dismiss any employees during the 60-day period, though it believes productivity will drop given the uncertainty. The company also wants to defer wage negotiations.

Thistle aims to have the President Steyn operations generating positive cash flow by early 2006 at current gold prices and exchange rates. Earlier this year, the company closed down two of five operating shafts at the mine, owing to higher costs, mostly due to a strengthening rand against the U.S. dollar.

President Steyn operations are now focused on high-grade areas, including mining of the no. 1 and no. 2 shaft pillars. The company is also continuously mining the no. 3 shaft, after redeploying workers there from shafts 7 and 9.

A high-grade section of the Eldorado reefs at the no. 3 shaft is being mined at the daily rate of around 500 to 1,000 tonnes. Further exploration will examine how to best exploit the high-grade target.

During the first five months of 2005, President Steyn sold 73,400 oz. of gold at an average price of US$426 per oz at a cash operating cost of about US$550 per oz.

Thistle’s shares last traded at 1 on Dec. 31, 2004, when trading was suspended on the Toronto Stock Exchange. In London, however, the company’s shares were recently reinstated and are trading on the London Stock Exchange Alternative Investment Market.