The gold plant at the mine will be put on care and maintenance next month as the operation focuses on copper production.

"The decision to cease gold operations at Sepon is necessary to preserve the strong contribution of the Sepon business," MMG CEO Andrew Michelmore said.

"Sepon gold oxide reserves have been depleting for some time now, with previous forecasts that production would cease in 2011.

"The combination of a higher strip ratio and weaker gold price is driving increased production costs.

"It is no longer economic for us to produce gold at Sepon."

The Hong Kong-listed company said the C1 cost of producing gold at Sepon had doubled since last year to $US1880 per ounce in the first half of this year, compared to a gold price of $1198/oz at the end of June.

MMG will review the overall structure of the operation to meet the future needs of the business and warned of job cuts over the coming months.

"MMG acknowledges that this is disappointing news for our workforce," Michelmore said.

"We are committed to working closely with our people, communities, suppliers and the Lao government to make the transition as smooth as possible."

MMG said it would continue gold exploration in Laos and review the restart of gold production if necessary.

Sepon poured its first gold in 2002.

It produced 8959 ounces of gold in the September quarter and 29,328oz so far this year.

Gold guidance for Sepon this year is 40,000-50,000oz at a C1 cost of $1475-1625/oz.

On a positive note, the mine achieved a quarterly copper cathode production record in September of 23,548 tonnes and is on track to meet its 2013 guidance of 83,000-88,000t copper cathode at a C1 cost of 95c-$1.05 per pound.