WALLACE, Idaho (AP) -- U.S. Silver & Gold Inc. has announced the layoff of just over one-third of its employees at its northern Idaho silver mine due to decreasing silver prices.
The company announced Tuesday that it was laying off 126 of 351 employees at the Galena Mine Complex near Wallace.
The layoffs at the Wallace mine come less than two months after the company announced it was shutting down its Drumlummon gold mine northwest of Helena, Mont., and laying off just over 100 workers because of falling gold prices and high production costs.
Producing an ounce of silver from the Galena mine costs about $16, while silver prices have dropped from $30 an ounce to about $20 this year, company officials said.
In January, the Galena mine began operating around the clock in an effort to increase productivity. It produced 629,228 ounces of silver from April through June, up from 577,000 ounces during the first three months of 2013.
President and CEO Darren Blasutti said Tuesday that despite those efforts, the decline in silver prices required company officials to look for further savings.
"I deeply regret the impact this will have on our employees, who have worked hard to help us achieve the progress we have made," Blasutti said in a statement.
Company officials said work at the Galena mine will focus on areas with higher grade ore to lower production costs.
"We will mine areas that we have high confidence in and that are currently efficient," said mine Steve Long, senior vice president for U.S. Silver & Gold. "And we will continue to develop areas that have potential."
The company said its board members are taking a voluntary 20 percent reduction in pay while members of the executive management team are taking a 10 percent cut, starting on Aug. 1.
In late May, the company announced it was closing the Drumlummon gold mine in Montana because it cost more than the market prices to produce an ounce of gold. The company said then it planned to move some of its equipment to the Galena mine.
U.S. Silver & Gold was created a year ago with the merger of U.S. Silver Corp., owner of the Galena Mine, and RX Gold & Silver Inc., owner of the Drumlummon mine. Its stock price has declined steadily from $2.15 in mid-January to 66 cents during trading on Wednesday morning.