Lundin Mining Corp (TSX: LUN) arguably had a terrible weekend of news releases. The hits to the company began on Friday, when the firm was forced to announce that a fatality had occurred at its Neves-Corvo mine in Portugal, and escalated to the removal of guidance for one of its 100% owned mines in Brazil following electrical failure.
The events began after hours on Friday, when the company reported that a fatal accident had occurred at its underground mining operation in Portugal. While no other individuals were injured, all underground operations were suspended as a result of safety precaution. At the time, no further details were reported.
An update however was issued to the markets last night by Lundin, with the firm identifying that the employee was a “longtime colleague.” The deceased had been working in active production on scaling activities when the accident occurred. The company continues to investigate the incident, along with a third party whom will be retained to conduct an independent investigation. Operations at the Neves-Corvo mine are expected to resume mid-week, except for the immediate area where the accident occurred.
Just before this update was issued however, Lundin provided notification to the markets that another event had occurred – a power outage that occurred yesterday morning resulted in significant damage to all four mill motors on site at the firms Chapada mine in Brazil. Following the outage, the protection system at the electrical substation failed, damaging the four mill motors.
While damage is currently being assessed, Lundin expects that all four motors will need to be removed and undergo “extensive” repair. While the firm has two spare motors for the mill, only one is on site, while the other is still undergoing rehabilitation.
The result, is that full processing rates for the mill are not expected for an extended period of time, with no formal timeline being provided. A timeline for resumption of any processing at the mine was also not provided. As such, guidance for 2020 production at the Chapada mine has been pulled. Previously, the company had expected to produce 51,000 to 56,000 tonnes of copper, and 85,000 to 90,000 ounces of gold over the course of the full fiscal year.
In the interim, planned maintenance is to be pulled forward, while mining at Chapada is being focused on waste removal and development activities. Additionally, Lundin will be determining whether business interruption insurance currently held for the site is applicable.
Lundin Mining last traded at $7.70 on the TSX.
Information for this briefing was found via Sedar and Lundin Mining. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.