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Investing.com -- Shares of Adriatic Metals PLC (LSE:ADT1) fell 5.94% today after the company reported a significant cut in its production guidance for the fiscal year 2025 and an operational update that indicated higher than anticipated costs.
The downward revision of the forecast comes after the company faced operational challenges, including weather-related disruptions and power outages, which affected its fourth-quarter 2024 production.
Adriatic Metals announced that its silver equivalent production guidance for the fiscal year 2025 was set at 12-13 million ounces, which is approximately 15% below the midpoint of the Royal Bank of Canada’s estimates (RBCe) of 14.8 million ounces.
The company also reported that its full-year operational costs are expected to be around $120 million, translating to $185 per tonne at the midpoint, which is 5% higher than RBCe’s estimate of $175 per tonne. These setbacks have led to a delay in the anticipated ramp-up of operations to the second half of 2025.
According to an RBC analyst, "We expect a negative reaction to today’s results given the challenging end to 2024 and the downgrade of FY25 guidance and higher than expected costs."
The analyst also said that they continue to view Adriatic as an attractive investment opportunity and expect a re-rating to occur as the company moves from a development into a production company.
RBC rated Adriatic shares Outperform with a price target of 295p.
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