BCD Resources announced on Wednesday the closure of its 134-year-old Beaconsfield gold mine in Tasmania by June 2012. BCD Chief Executive Peter Thompson explained the planned shuttering to exhaustion of gold resources.

He added it is no longer viable to mine below the current depth of 1,210 metres given current gold prices since below the current mine base, gold mineralization thins.

It costs BCD $1,000 to produce an ounce of gold, while spot gold prices in Sydney on Wednesday was at $1,722.60. Mr Thompson said gold prices must rise above $2,000 an ounce for BCD to reconsider its decision.

Mr Thompson promised the 106 full-time and 16 casual workers that they will receive full entitlements, while the company would also support 32 contractors.

The mine, located on the Slope of Cabbage Tree Hill overlooking downtown Beaconsfield was where miners were trapped in May 2006 more than 900 metres underground for two weeks. The incident, followed globally, happened after a rockfall which killed miner Larry Knight. However, trapped miners Todd Russell and Brant Webb were eventually rescued and freed.

The company restarted mining in June 2007, 14 months after the rockfall.

However, Mr Webb who now works as a hardware salesman in the same town, urged BCD not to shutter the mine.

"I want it to go forever because if it goes forever it means people are still feeding their families, they are still making a quid pro out of its and they are buying houses and keeping the economy going," the former trapped miner told The Sydney Morning Herald.

He added if the mine would close, people would leave Beaconsfield and it would become a ghost town.

BCD Chairman Michael Botting said at the company's annual general meeting that the firm plans to convert the gold mine into an underdeveloped refractory deposit. It is also looking into other production options such as treatment of a gold tailings deposit and development of the Pinafore open pit gold resources at Lefroy, located 40 kilometres from Beaconsfield.

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