Majestic Gold halts Chinese mine following fatal incident

[Ben Graham]

China-focused Majestic Gold (TSXV: MJS) has suspended operations at its Denggezhuang (DGZ) underground mine in Shandong province, following a hanging wall incident that killed one of its employees.

In a press release on Monday, the gold miner said the worker was struck by loose rock while performing risk removal operations at DGZ, one of three underground mines operated by its subsidiary based in Yantai City.

Despite immediate rescue efforts, the worker succumbed to injuries, it added.

Following the incident, authorities in Shandong province ordered the suspension of production and asked the company to rectify the situation while temporarily withholding its relevant licenses for the DGZ mine. They also ordered an immediate investigation into the accident to determine the cause and nature of the accident, the responsibility of on-site management, and the direct economic losses of the accident.

The investigation team will jointly review the remediation measures undertaken by Yantai Mujin, Majestic Gold’s subsidiary in charge of mine operations, before authorizing the resumption of operations at DGZ.

In its statement, Majestic said it “will continue to work closely with Yantai Mujin to fully cooperate with the ongoing investigation” and “is committed to implementing all necessary safety measures, addressing potential hazards, and ensuring that all on-site safety management and supervision are in place.”

The company operates several mines in Shandong province, with its main asset being the Songjiagou open-pit mine located 50 km south of downtown Yantai. Last year, it produced 31,949 ounces across all its operations.

Shares of Majestic Gold fell 2% to C$0.15 apiece following the mine suspension, giving the British Columbia-based gold miner a market capitalization of C$152.9 million ($111.4 million).