Turquoise Hill Resources Ltd. (TSE:TRQ), the Canadian mineral exploration company focused on the Asia Pacific region, dropped in morning trading after warning that full-year production at Rio Tinto Group's Oyu Tolgoi copper and gold mine in Mongolia may be lower than previously forecast.
Turquoise shares fell 1.3 percent to C$3.77 at 9:45 a.m. in Toronto, stretching losses in the past six months to 21 percent.
Turquoise Hill, which owns a majority interest in Oyu Tolgoi and is controlled by Rio, said in a statement today that the mine is now expected to produce between 135,000 and 160,000 tonnes of copper in concentrates and 600,000 to 700,000 ounces of gold in concentrates in 2014.
The Vancouver, British Colombia–based company had previously said the mine was targeting between 150,000 and 175,000 tonnes of copper in concentrates and 700,000 to 750,000 ounces of gold in concentrates.
Turquoise said technical problems hit first-quarter production at the property. Rake blades in the mine's tailings thickeners failed, and also that some "debottlenecking" projects were put off to preserve cash, it said.
Oyu Tolgoi, which began operating last year, is the largest single investment in the history of Mongolia,
Rio Tinto owns 50.8 percent of Turquoise, which in turn holds a 66 percent interest in Oyu Tolgoi. Rio operates the mine.
Turquoise Hill also said today that it swung to profit in the fourth quarter. Net income was $138.4 million, or 11 cents per share, compared with a net loss of $145.0 million, or 11 cents per share, a year earlier. Revenue increased to $84 million from $1.3 million.
Analysts on average were expecting per-share loss of 13 cents on revenue of $135.8 million.
The stock has a "strong buy," a "buy", three "hold" and 2 "underperform" recommendations from analysts.