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PrintNyrstar, the world's largest producer of zinc, on Thursday said it would mine less zinc in concentrate than previously expected, due to operational problems at two of its mines in the United States and Canada.
The group said it would now mine 265,000-280,000 tonnes of zinc in concentrate in 2013, down from its previous guidance of 300,000 to 340,000 tonnes.
The group's Myra Falls mine in British Columbia, Canada, was plagued by outages, one of them caused by a damaged water line after a rock slide. This resulted in a fall of about a quarter in zinc in concentrate at the mine.
At its Middle Tennessee mine in the United States electrical failure and mechanical equipment issues also slowed production down.
The group said that, following theses issues, it would conduct a strategic review of its mining operations.
"We are initiating a review of our mines. That review kicked off this week and the team will be going through each of our mines in the next six months," Graham Buttenshaw, Nyrstar's mining vice president said.
The review, which started with Myra Falls, would look at how the mines are integrated within the group. Nyrstar will update the market on how it will proceed with its mining operations in the new year, he said.
Nyrstar shares dropped by as much as 2.5 percent to 3.14 euros, equalling a three-month low.
KBC Securities said it was cutting its price target on the group to 3.00 euros from 3.50, saying it had expected improving mining production following some specific issues in the first half.
Bank Degroof, while maintaining a 'Hold' rating and 3.20 euro price target, said the lower production guidance was not good for sentiment and that the shares did not look particularly cheap compared with peers based on 2013 and 2014 core profit multiples.
Nyrstar repeated its guidance that it would produce 1.0-1.1 million tonnes of zinc metal in its smelters in 2013.
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