Shares in Hochschild Mining fell nearly 22% on June 10 after the South America-focused precious metals miner announced a six-week halt of processing operations at its Mara Rosa gold mine in Brazil due to heavy seasonal rainfall, Mining.com reported.

The company is suspending the processing plant to carry out maintenance and repair work on the tailings filtering system, affected by rain and contractor-related issues. Mining operations will continue during the shutdown.

Mara Rosa, which began commercial production in early 2024, yielded just over 25,000 ounces of gold between January and May, well short of pace to meet its guidance of 94,000-104,000 ounces this year.

That forecast will now be 'significantly reduced,' Hochschild said, adding the production shortfall will impact operational costs.

CEO Eduardo Landin will oversee a full review of mining, processing and waste management activities to identify bottlenecks and stabilise output.

Berenberg analysts, who had previously expressed caution about the mine's first wet season, now expect production to fall to about 74,000 ounces, roughly 20% below the original target, and estimate the downgrade will hit group earnings per share by about 10%.

'The challenges at Mara Rosa have gone beyond weather-related delays and now include serious issues with the tailings filtering process,' Berenberg said.

Hochschild shares ended down at £2.34 ($3.15) each on June 10, valuing the company at £1.22bn. Mara Rosa, located in Goiás state, is Hochschild's first operation in Brazil, where it acquired the Monte Do Carmo project for $60mn last year.

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