Shares in Horizonte Minerals PLC (AIM:HZM, TSX:HZM, OTC:HZMMF) fell almost 40% in the first half hour of trade after it revealed the construction of its nickel operation in Brazil had run into difficulties.
Announcing changes to the design of the Araguia project, it said costs would rise by around 35%, while first production would be delayed until the third quarter of next year.
Chief executive Jeremy Martin said: "Despite the anticipated higher capital requirement, Araguaia remains a tier-1 asset that will deliver strong margins over its 28-year mine life once production commences next year.
"Moreover, the imminent completion of the Feasibility Study on Line 2 will demonstrate Araguaia's capacity to support an annual production of 29,000 tonnes per annum."
In early trade, the shares were off 50.12p at 75.38p.
Investment bank Peel Hunt noted: "Progress to date means that the Horizonte team retains the backing of its largest three shareholders.
"This suggests opportunities for investors will arise in the final financing solution to complete the project.
"We place our target price and recommendation under review while we await details of the revised budget and financing plan from management."
Its price target was 220p a share before the announcement.