Dundee Precious Metals stock in mini meltdown after told to cut smelter feed
"We have spent over $40 million on the smelter in the two years we have owned it and are aware of the challenges that continue to exist there," Chief Executive Jonathan Goodman said in a statement.
Dundee Precious Metals (TSX:DPM) shed 5% on Wednesday on almost double usual trading volumes, after announcing that Namibian environment officials ordered its smelter feed cut by 50%.
By late afternoon the Canadian miner was trading down 10.5% at $7.69 on the Toronto big board, up from a low of $7.05 hit shortly after the open. The mining sector was generally flat on the day with the TSX S&P Global Mining index up 0.4%
Around 1 million shares in the $963.3 million company had changed hands compared to the daily average of 584,000. Dundee is down 6.4% year to date.
“We have spent over $40 million on the smelter in the two years we have owned it and are aware of the challenges that continue to exist there,” Chief Executive Jonathan Goodman said in a statement.
The company, which holds interests in a number of developing gold properties in Bulgaria, Serbia and northern Canada, has also been told to advance the installation of the sulphuric acid plant to 2013 from 2014.
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That had to hurt. But Dundee is not alone in having surprises like that sprung on them. I hope the environmental decision was well founded and not unexpected. A 50 percent cut that comes as a surprise does not speak well of the local government. But it’s not untypical for the precious metals industry.