A force majeure declaration has been issued at a gold and silver mine in southern Chile where two workers died after part of the underground mine was flooded.
Mandalay Resources said its Chilean subsidiary Cerro Bayo had issued notices to customers, suppliers and contractors of and at its namesake operations and is in talks with unions about possible layoffs while production remains suspended.
The Chilean government launched a major rescue operation earlier in June when the flooding occurred in the Delia NW mine, trapping two workers underground.
However, after drilling down to a refuge 250 meters below the surface, rescuers found that the entire mine had been flooded, destroying hopes that the two could have survived.
An investigation has now been launched into the flooding and the risks for the other mines at the Cerro Bayo site.
Toronto-listed Mandalay said it is reviewing its alternatives about resuming production at Cerro Bayo and expects to be able to provide more details on its plans and the impact of the accident on production when it releases its second-quarter 2017 results on August 10.
The Cerro Bayo operation produced 2,807 oz gold and 365,214 oz of silver in 2016.
