29Metals' (ASX:29M) decision to delay the restart of mining at its Xantho Extended orebody in Western Australia is painful but prudent given the frequency of production disruptions at the site, Jarden said in a Thursday note.
An ongoing geotechnical review has pinpointed a need for alternate level access development to mitigate interactions with higher-stress zones and cut the risk of further interference with production.
The equity research firm noted that Xantho Extended is a major source of high-grade polymetallic feed at the Golden Grove mine, as well as the zinc, gold and silver by-product credits that support the operation's cost structure.
Meanwhile, 29Metals' Capricorn Copper mine remains suspended and will need considerable additional funding to restart, "representing a further call on an already stretched balance sheet," Jarden said.
The equity research firm maintained an underweight rating on 29Metals and cut its price target on the company to AU$0.32 from AU$0.38.
"We seek greater operating consistency at Golden Grove, a credible pathway to restart Capricorn Copper, and positive [free cash flow] generation to become more constructive in our view," it said.