There have been widespread claims on social media that government red tape is responsible for the closure.

Canadian gold producer Kirkland Lake Gold this week confirmed plans to suspend test mining and processing at its Cosmo Mine and Union Reefs processing plant at Pine Creek.

The suspension will impact about 250 jobs, 60 per cent of those are locally based.

The company has been forced to apply for environmental approvals through the NT EPA to re-open the Union Reefs North Underground mine for a two-year underground operation to drill and blast for gold.

The presence of the vulnerable ghost bat in some of those abandoned shafts has caused most of the delays in getting approval for the work.

But the company has not blamed any red tape and says it will continue to work to have that underground mine work approved.

NT Primary Industries Minister Paul Kirby said it was a commercial decision made by the company.

"The decision that has been made by the company is incredibly disappointing," Mr Kirby said.

"However, the decision was entirely commercial and driven purely by the economics of that particular operation.

"The decision was not in any way related to any approvals processes relating to the project.

"Our focus now is the workers and families who'll be affected, and we are working with the Department of Trade Business and Innovation to provide assistance to the workers affected so that they can transition to new employment."

The shutdown will happen at the end of the month.

The Canadian gold producer said it would continue work on rehabilitation programs at a number of locations and will move forward with existing exploration plans in the Territory.

"Given the quality of Macassa, Detour Lake (in Canada) and Fosterville (near Bendigo Vic.), we have decided to designate our Holt Complex in Northern Ontario and assets in the Northern Territory as non-core and will be considering strategic options to the maximise value of these assets," the annual results stated.

The decision to shutdown came as a surprise when the company said just in November it was spending up on the Pine Creek operation.

"In October 2019, the company commenced test processing of Lantern Deposit material at the Union Reefs mill as part of the advanced exploration program. Production during Q4 2019 at the Union Reefs mill totaled 8700 ounces at an average grade of 2.06 g/t."

Kirkland Lake Gold NT project director Mark Edwards this week said the strategic review related to the company's NT assets remains ongoing with rehabilitation and exploration work to continue during the review period.

"The company highly values the hard work and dedication of its workforce in the NT and will provide full entitlements and redeployment assistance to employees affected by the decision," he said.

"Expressions of interest have already been received from a number of other mining organisations in the NT, and other parts of the country, which are looking to complement their workforce."

He said a workforce of 30-40 employees would be retained by the company in the NT to advance existing rehabilitation and exploration work plans.

Those future plans include investing in upgrading water treatment infrastructure at Cosmo Howley and UR to meet all water discharge conditions, aggressively lower our environmental liabilities at both sites, continue exploration activities in the Pine Creek region, progress the Environmental Impact Statement for the Union Reefs North Underground mine, continue to maintain our tenements and licence conditions.

Gold has been mined at Pine Creek since 1878 and the town, home to just over 300 people today, has seen many booms and busts over the years.

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