Lundin Mining Corporation (TSX:LUN)’s shares came under pressure today following fourth quarter production figures, and guidance for 2023 to 2025 which left analysts at Canaccord Genuity (TSX:CF, LSE:CF) underwhelmed.
“Negative across the board” analysts at the broker said, downgrading the stock to ‘hold’ from ‘buy’ and lowering the price target to C$9.50.
Production guidance was lower than the broker anticipated across all metals for each year of the guidance period and below the company's own previous guidance for 2023 and 2024.
READ: Nova Royalty set to acquire portion of existing royalty on Lundin Mining's Josemaria copper-gold-silver project in Argentina
Canaccord said the primary driver behind the lower copper and gold production guidance over the period is a new approach at Chapada while the lower zinc production guidance is due to even longer ramp-up expectations at the ZEP project at Neves Corvo.
In addition to the lower production, the broker pointed out that cost expectations for 2023 for all assets except Candelaria were above its forecasts.
Quarter four production was also weaker than anticipated with copper production 17% below estimate and gold production 14% below forecast, analysts wrote.
“We note that every asset recorded a double-digit miss in percentage terms versus our estimates for both copper and gold, and that copper production missed the low end of guidance that was already lowered in June 2022” analysts at Canaccord wrote.
The broker also reduced 2023 and 2024 EBITDA estimates by 16% and 10% respectively, while its NAV declined by C$1.97/share, around 21%, to C$7.25/share.
Canaccord said the revised estimates and price target imply a modest return, hence the rating downgrade.
Shares in the company were trading 3.14% lower at C$8.96.