Primero Mining Corp (NYSE:PPP), the penny stock trading under $1, recorded under weak session yesterday as some 1,000 unionized workers went on strike at the company’s San Dimas mine, halting milling and mining operations. Based on strike duration, it could have an adverse impact on the 2017 production. As a result, the firm has decided to defer announcing its 2017 cost and production forecasts.
About 1,000 workers of Primero started the strike at midnight. The union had been discussing a labor deal when the firm reversed the vital advances already accomplished and proposed beginning again from scratch. Primero reported that the employees struck after the company and union failed to reach a deal during collective bargaining discussions.
The company had started reducing jobs, counting servicers, at the San Dimas mine in an effort to enhance productivity and make the business profitable again. It intends to better align the mine’s interim bonus plan with its performance and shift workforces onto a more constant shift cycle to enhance productivity.
The San Dimas mine recorded gold production of 151,355 ounces while silver production amounted to 8.3 million ounces in 2015. Last year, Primero stated that it anticipates production capacity to increase to 215,000 ounces of gold annually.
RBC Capital Markets, the research group that also assesses best NASDAQ stocks, stated that they anticipate a negative reaction from company’s shares to the firm’s announcement. The strike was reported after the market’s close. In the last trading session, the stock price of Primero declined 0.37% to close at $0.882. After the recent decline, the market cap of firm stands at 167.71 million.
Primero is not looking for a decline in individual worker compensation, though the workforce at San Dimas counting contractors will be minimized, a process that has started outside of the CBA discussions.