Junior gold producer Simmer & Jack Mines (Simmers) on Thursday said while Eskom's planned electricity tariff hikes would not close operations, they would most certainly cost jobs.

Speaking in a telephonic interview with I-Net Bridge, Simmers COO Deon van der Mescht said that the South African power utility's plans to increase its prices could increase its costs by about 17%.

"No doubt that it will impact negatively," said Van der Mescht.

"If the tariff increases realise, it will mean further rationalisation would have to take place, translating into job losses," he added.

Simmers in June this year instigated rationalisation programmes at its two wholly owned gold operations ? the Buffelsfontein Gold Mine (BGM) in North West and Transvaal Gold Mining Estates (TGME) in Mpumalanga.

These rationalisation programmes are now complete.

Earlier on Thursday it reported that production increased by 5% to 66 295 ounces during the six months to end September 2009.

The company said its first half headline loss had narrowed to 12.81c a share from 14.23 cents a share a year ago.

While the higher production helped grow revenue by 16% to R466-million, total cash costs rose 17% to R542-million in the six months.

An operating loss R65-million was reported.

Simmers' estimations of the impact of higher electricity prices are in line with those of the gold majors, which have all warned that Eskom's intentions to hike tariffs by 45% in each of the next three years would add to their costs.

By the beginning of November the three gold producing majors AngloGold Ashanti, Gold Fields and Harmony Gold Mining as well as smaller producer DRDGold had warned of the extreme risks posed to the mining industry by Eskom's proposed tariff increases.

But while the majors have suggested that the higher prices could force them to consider closure of some shafts and possibly delay some growth projects, the price hikes are likely to hurt the junior producers most.

DRDGold has already warned that if Eskom implements the increases it would be forced to close its underground operations at Blyvooruitzicht, a mine that was this month put under judicial management.

At 11.20am on Thursday shares in Simmers were trading 5.94% or 12 cents lower at R1.90 on the JSE.