Shares in Lundin Mining Corp. fell the most in more than six years after the company cut its near-term production forecast at its flagship copper mine in Chile.
In a news release late on Wednesday, the Toronto-based miner said production at its Candelaria operation will be about 20 per cent lower in 2018 than previously indicated. Lundin is encountering production problems because of a recent rock slide, which has led to pit wall instability at the mine site. The base metals company said it is taking a “more conservative approach” to mining the deposit over the near term.
Candelaria is by far Lundin’s highest-producing asset. In the quarter ending Sept. 30, it accounted for about 62 per cent of Lundin’s revenue. In 2014, Lundin paid about $2-billion (U.S.) to acquire an 80-per-cent share in Candelaria from U.S. base-metals giant Freeport-McMoRan Inc.
Lundin shares fell by 16.1 per cent on the TSX on Thursday, to close at $7.52 (Canadian) a share, the steepest drop since August, 2011, according to Thomson Reuters data.
In the release on Wednesday, Lundin also updated its long-awaited 10-year development plan for Candelaria. Lundin now says it intends to spend about $1.3-billion from 2018 through 2021 on the project, about three times higher than it had previously planned.
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