Malaga halts output at Peruvian tungsten mine

Malaga, the Canadian junior miner, announced on Monday that it had suspended production at its Peru-based Pasto Bueno tungsten project and had placed it on care and maintenance following a power disruption. The company said an energy transmission line was accidentally severed and several transmission poles were damaged. Production had continued using diesel generators but this had resulted in significantly higher operating costs and negative cash flow.

The junior miner said it would take about a month to repair the line. Malaga also said the Pasto Bueno property had been generating less-than-expected cash, owing to a decrease in the production of tungsten as a result of lower grades and a reduction in the tungsten price. Investors haven’t liked the news and shares at the miner were 33% down on Monday.