BRASILIA (dpa-AFX) - Shares of Hochschild Mining plc (HOC.L) were losing around 20 percent in the morning trading in London after the firm said it sees significant reduction in production at Brazil's Mara Rosa Mine in fiscal 2025.
In addition, due to the ongoing review of all mining, processing and disposal activities at Mara Rosa to identify constraints to the mine's output, a temporary suspension of the processing plant of approximately six weeks is anticipated.
However, the company confirmed that production at both the Inmaculada mine in Peru and San Jose in Argentina is in line with expectations.
Heavier-than-usual seasonal rainfall as well as contractor performance issues have been adversely affecting operations at Mara Rosa mine.
At the start of the year, the Mara Rosa mine was expected to produce between 94,000 and 104,000 ounces of gold in 2025. At the end of May, the mine had produced just over 25,000 ounces of gold.
In its latest update on the operations, the company said its measures being taken are expected to result in a significant reduction to that guidance. Hochschild also expects a corresponding impact on the operation's costs.
The company has previously disclosed that operations at Mara Rosa have been adversely affected by heavier-than-usual seasonal rainfall over the past few months as well as contractor performance issues.
These conditions, with limited access to ore, particularly the higher-grade zones within the pit, have further compounded ongoing challenges with the filtering processes.
With this, efforts to recover from delays in mine waste removal carried over from the previous year have been further prolonged, the firm noted.
The planned suspension at the Mara Rosa Mine would help the firm to carry out general maintenance activities and mechanical filter repair work. Mining operations will continue as planned.
Eduardo Landin, CEO, is temporarily assuming the operational responsibilities following the resignation of the Chief Operating Officer, as announced on May 27.
The firm will provide an update on progress of the review and revised full year Group guidance in due course.
Landin, Chief Executive Officer, said, 'The wide-ranging measures we are taking at Mara Rosa are focused on achieving a sustainable level of operational performance. We remain confident in the geological potential of the asset and in Brazil's role as a key pillar of our long-term growth strategy.'
On the London Stock Exchange, Hochschild Mining shares were trading at 242.29 pence, down 19.56%.
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