Talvivaara Mining Co. (TLV1V) fell for the ninth day in Helsinki trading after DNB ASA (DNB) cut its recommendation on the stock, citing short-term risks to production and the cash outlook of the Finnish nickel miner.
Talvivaara shares slid as much as 11 percent to 9.82 euro cents, a record low. The stock fell 9.6 percent at 12:32 p.m. in the Finnish capital with trading volume at 163 percent of the three-month daily average. The shares have lost 25 percent during the last nine days. A decline at close today would mark Talvivaara’s longest losing streak since it first sold shares in May 2009.
DNB today reduced its recommendation on the shares to hold from buy and cut a 12-month price estimate to 12 cents from 35 cents. Talvivaara’s average 12-month price estimate fell to record 21 cents, according to data compiled by Bloomberg.
“If our nickel price recovery scenario proves too optimistic, Talvivaara might face a cash shortage in 2014,” Sampsa Karhunen and Alexander Tallberg, analysts at DNB in London, said in a note to clients. “Furthermore, production –- still suffering from lower grades due to excess water –- seems very vulnerable.”
The odds of a bankruptcy at Talvivaara in the medium term have increased, Exane BNP Paribas said in a note to clients.
Talvivaara has suffered from excess water at its Sotkamo open-pit mine and halted production for 11 days in November due to a waste-water leak. It withdrew the full-year output target of 18,000 tons of nickel on July 19 after producing 1,776 tons in the second quarter, citing a maintenance stoppage and low metal grades caused by excess water.
Talvivaara said second-half production will improve significantly from the first six months of the year. It reports second-quarter earnings on Aug. 15.
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