29Metals Ltd (ASX: 29M) is one mining share in the S&P/ASX 300 Index (ASX: XKO) that is not enjoying a green session today.
Shares in the copper-focused mining company are responding violently to the latest operations update which was released late yesterday afternoon.
At the time of writing, the damage toll is sitting at an 18% fall to $1.90 per share. However, the 29Metals share price fell as much as 20% earlier in the session — reaching an intraday low of $1.80. For comparison, the ASX 300 index is 0.59% higher at 7,119.5 points.
2023 is not looking pretty for production
29Metals shareholders are probably wishing they could skip to 2024 already after reading the company's operations update. The copper and precious metals producer unfortunately did not paint an appetising image for production in 2023.
Providing preliminary guidance for metal production next year, 29Metals unveiled some disappointing estimates. According to the release, copper production is anticipated to be flat year-on-year. Even worse, gold and silver production is slated to fall between 10% to 15% compared to 2022.
It wasn't all negative news for production though. Looking at the bright side, zinc production is expected to increase by between 5% to 10%. However, this consolation doesn't appear to be doing much for this ASX 300 mining share today.
Although, any 29Metals shareholders that have added to their position over the last five months or so can't be too unhappy. Between 15 July and 14 December, the 29Metals share price had more than doubled.
The apparent culprit behind expected production reductions include:
- Reduced milling rates at Capricorn Copper to manage tailings capacity
- Awaiting regulatory approval for additional tailings facility; and
- Lacking project development at Golden Grove due to the tight labour market
What else is weighing down this ASX 300 share?
Unfortunately, it is not only the forward view that is undesirable… it's also the back. In addition to the 2023 guidance, 29Metals provided a summary of 2022 production.
Copper and zinc production is expected to be in the lower half of the previously stated full-year guidance range. Meanwhile, total costs are expected to be in the top half of the range.
Positively, gold and silver production is slated to be at or above the top end of guidance. Nevertheless, the 29Metals market capitalisation is certainly looking a little lighter today following the news.
