Hochschild Mining PLC (LSE:HOC, OTCQX:HCHDF) shares dropped 20% in Tuesday morning’s trade, after reporting operational challenges at its Mara Rosa gold mine in Brazil.
Heavy seasonal rainfall and contractor issues have disrupted access to higher-grade ore and affected filtering operations, Hochschild said in a statement.
Chief executive Eduardo Landin has taken over operational oversight after the resignation of the chief operating officer in May. And, he is now leading a full review of mining, processing, and disposal activities at Mara Rosa.
A six-week shutdown of the processing plant is planned to complete maintenance and mechanical filter repairs. Mining work will continue during this period.
The Mara Rosa mine produced just over 25,000 ounces of gold by the end of May, well below an original full-year forecast of 94,000 to 104,000 ounces.
The company said output guidance will be significantly reduced, with a corresponding rise in costs.
"The wide-ranging measures we are taking at Mara Rosa are focused on achieving a sustainable level of operational performance,” Landin said.
“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."
In London, Hochschild shares were down 61.2p or 20.3% to 240p each.