Aug 10 (Reuters) - Shares of Jaguar Mining Inc (JAG.TO) (JAG.N) plunged to a 16-month low Tuesday, a day after the gold miner cut its 2010 gold production outlook for the second time in less than four months.
The company, which operates the Turmalina, Paciencia and Caete mines in Brazil, now expects the mines to produce 163,000-168,000 ounces of gold in the year, down about 19 percent from its earlier view.
These mines were expected to produce 208,500 ounces of gold in the year, according to Reuters data.
Jaguar Mining does not expect to have the new development and sequencing in-place needed to increase the tonnage at Turmalina, its largest mine, to meet its previous targets, Chief Executive Daniel Titcomb said in a statement on Monday.
Shares of the company fell 22 percent to a low of C$6.49 in afternoon trade on the Toronto Stock Exchange.
Jaguar Mining also now expects to produce gold at 3.53 grams per ton (g/t) at Turmalina and 3.36 g/t at Paciencia, its second largest mine, while earlier expectations were at 5 g/t and 4 g/t, respectively.
“This shortfall will create a serious credibility gap in the minds of investors,” said Steven Green, analyst at TD Newcrest in a note to client.
“Based on our forecasts, we believe the company will have burned through its current cash balances and may require additional financing by the end of 2010.”
Jaguar Mining posted a second-quarter loss on Monday, hurt by lower production and higher costs. [ID:nSGE6780CY] (Reporting by Abhiram Nandakumar in Bangalore; Editing by Vyas Mohan)