The decision to dump the contractor has raised questions over the future of the proposed $110 million expansion of CSA after a source close to Macmahon revealed to the Daily Liberal it had been given "no clues" as the reasoning behind the termination - and that the mine has at this stage, refused to provide an explanation.

However, Cobar Shire mayor Lilliane Brady feels the decision to axe the contractor might have more to do with "streamlining efficiencies" at CSA.Cr Brady has tipped the mine could be "potentially" shopping around for a better deal with confirmation Macmahon was set to earn $6 million out of the expansion this month alone, and more than $80 million for the 2014 financial year.

She said the mood around Cobar seemed unchanged by the announcement and hoped the decision by Glencore Xstrata to sack the contractor would open the door for more permanent and direct mining jobs coming out of CSA over the coming months.

"To be honest nobody around town really seems to care," Cr Brady said."[Macmahon] is a predominately fly-in-fly-out workforce, most of their money goes out of town anyway."

The town's two local real estate agencies have also quietly tipped the contractor's departure would have little impact on business.

On the books the contractor rents only eight units, four of which belong to Cr Brady, and four homes.

One agent has said there could be small number of private rentals held by Macmahon employees, but with properties at an absolute premium its isn't expected any "unscheduled" terminations would have any long-term ramifications for Cobar's real estate sector.

CSA, which directly employs 300 workers has operated under the Swiss-based mining conglomerate Glencore since 1999.

The company announced a multi-billion dollar merger with Xstrata earlier this year, in addition to underwriting a $180 million capital works deal for YTC's Hera Gold and Nymagee deposits.

The shaft expansion project at CSA would have made it the deepest production mine shaft in Australia, extending it a further 1.5 kilometres from the drive drum to the base.

While Glencore Xstrata has declined to comment on the cancellation of contract services or the freeze on its multi-million expansion plans, Macmahon Holdings yesterday issued a statement to the Australian Securities Exchange (ASX) calling for a full explanation to be released to the market as soon as possible.

At the time of publication (yesterday) shares in the Macmahon Holdings shed more than 10 per cent to 16 cents adding to the growing concerns around the company's bill of health.

In February, Macmahon said it expected to post a full-year loss of between $10 million and $20 million as the sale of its construction business to Leighton Holdings took effect.Macmahon also posted a net loss of $37.6 million in the first half of the current financial year.