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Another steep drop in gold and silver prices is forcing mining companies to look at severe cost-saving measures that would have been unthinkable at the start of the year.

When bullion plunged 13% in two days back in April, miners evaluated contingency plans they would adapt if prices continued to weaken. Those included major production cuts, dividend cuts, layoffs and mine closures.

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With gold sinking another 6.4% on Thursday to below US$1,300 an ounce (along with an 8% drop for silver), those contingency plans no longer feel like such a longshot. Numerous analysts have warned that if prices fall much below US$1,200 for a prolonged period, even the large companies would consider large restructuring initiatives.

Many gold miners have curtailed capital spending, delayed projects or both. However, some development companies are already starting to overhaul their business in more dramatic ways. It is a potential sign of things to come if the bear market gets worse.