Gold miner Centamin has suffered a 25pc fall in output in the last quarter after running into “challenges” at its giant Sukari mine in Egypt.
The company produced 92,800 ounces of gold in the three months to June 30, down from 124,000 in the same period last year.
Centamin’s shares tumbled 5.8pc in morning trade to 110.90p, making it the biggest faller in the FTSE All-Share Index, despite the miner insisting that it was on track to hit its guidance of 505-515,000 ounces this year, which it revised down just six weeks ago.
The stock plunged 18pc on May 25 after it warned investors it would produce less gold this year.
Centamin attributed the drop in output to lower-quality ore at its open-pit mine, where it is digging a “transitional” zone before hitting a richer seam.
Output from its underground mine also struggled after the breakdown of a crucial drilling rig.
"We have experienced several challenges this year, resulting in the revision of our full-year guidance in May,” said Andrew Pardey, chief executive.
“I am pleased to report progress throughout June in the open pit, where mining has begun to access improved grades… Our focus now remains firmly on delivering the underground operations back in line with forecasts and returning Sukari's production profile to a steady state."
Centamin’s sole asset is Sukari, one of the few working mines in Egypt. It is looking to expand operations at the site and also has gold exploration programmes in Burkina Faso and Côte d’Ivoire.
Analysts at Berenberg noted the second-quarter update fell short of market expectations but that the “softness” in the share price may be a buying opportunity for investors. “The group is still clearly looking for things to improve in the second half of the year,” they said.
Investec analysts said the quarter was “weak as forewarned but perhaps even weaker than consensus had expected”, with a “marked turnaround in performance” due later this year.
Centamin will publish its interim results on Aug 2.