What happened
Shares of Great Panther Mining Limited (GPL +0.00%) fell right out of the gate on Tuesday, dropping as much as 14% in the first hour of the trading day. Based on a news update from the company, the drop appears warranted.
So what
Before the market opened today, Great Panther provided an update on development efforts at its Tucano asset, a wholly owned mining operation in Brazil. Simplifying things a little bit, heavier-than-normal rains impacted mine slope stability in a portion of the mine. For safety reasons the company has halted activity at some of its operations in the area. The company is working to resolve the issue.
Image source: Getty Images.
That said, at this time, it doesn't expect things to get back to normal until the third quarter. That expected delay resulted in Great Panther increasing its cost expectations for this mine and, perhaps more importantly, led to a 10,000-ounce reduction (around 8% to 9%) in the amount of gold it expects to produce from this mine. With gold prices hovering near $1,900, this is a notable change. It's hardly surprising that investors took the news poorly.
Now what
Today's announcement from Great Panther highlights one of the uncertainties that surrounds the entire mining industry. Working the earth in search of gold and silver can be complex and sometimes doesn't pan out the way you expect. While it sounds like this is just a delay, at least at this point, investors should probably keep a close eye on the developments here just in case. If the weather or the mine don't cooperate, this could turn into a bigger issue.
