UPDATE 1-Tahera fires staff, govt takes over diamond mine

TORONTO, Dec 15 (Reuters) - Tahera Diamond TAH.TO has terminated all of its remaining staff and said on Monday the Canadian government has taken over its Jericho diamond mine in Canada's Far North due to the company's lack of funds and its inability to find a buyer for the asset.

Tahera, which has been operating under bankruptcy protection since January, also said it will close its Toronto office at the end of the year.

The Canadian company suspended the Jericho mine in February and said in March it was looking for a buyer. It said on Monday it had received court approval to cease operations at the mine.

The company's shares, which once traded at more than C$4, were at half of a Canadian cent on Monday on the Toronto Stock Exchange.

"No value is expected to remain available to shareholders," Tahera said in a statement.

It said Ottawa's Department of Indian and Northern Affairs had taken over the mine as of Dec. 13 and would retain former Tahera employees to conduct care and maintenance activities.

Peter Gillin, the company's former CEO, has resigned as the company's chief restructuring officer, it said. A company managed by the company's former chief financial officer will take over the restructuring.

Jericho lost money steadily after it opened in 2006 due to high oil prices, the soaring Canadian dollar, and a shortened winter resupply season in 2006.

The mine relies on a seasonal ice road for overland transportation of supplies, including fuel.

Tahera said it had received an extension to Jan. 23 for its credit protection under the Companies' Creditors Arrangement Act. During the extension period, the company will try to sell its remaining assets.

($1=$1.24 Canadian) (Reporting by Cameron French; editing by Peter Galloway)