TORONTO (miningweekly.com) – The TSX-listed stock of Perth-based miner Mirabela Nickel on Thursday lost 40% in value after the company announced that one of its two customers would close its smelting facilities from November.

The miner reported that Votorantim Metais intended to close their smelting facilities owing to the adverse nickel market conditions.

Votorantim expected that the concentrate sales agreement with Mirabela would terminate at the end of November, while Mirabela said it would run until the end of 2014.

Mirabela said it was taking legal advice regarding its contract with Votorantim and its position regarding its debt funding agreements.

It added that it had a challenging short-term production outlook with the openpit mine being out of sequence after a nitrate supply disruption.

This might result in the company missing its full-year nickel output target of 17 000 t, the lower end of the current production guidance.

Meanwhile, Mirabela said it was unable, at this early stage in its planning cycle, to quantify its capital budget for 2014, but expected capital requirements to be materially higher than in 2013.

It said the nickel market conditions remained challenging, with London Metals Exchange prices trading below the company's cash flow break-even position after overheads, financing and capital costs.

Mirabela also noted a recent change in market analyst opinions regarding the likelihood of a recovery of nickel prices in early 2014, on the back of an expected ban of Indonesian nickel ore exports to China, with the market analysts now considering the possibility of continued weak nickel prices for 2014.

As a result of this, Mirabela said there was an increased risk to its business, raising the spectre of defaulting on its debt repayment obligations.

Given this heightened risk profile, and the fact that nickel prices were forecast to trade below the company's break-even position in 2014, Mirabela said it would explore opportunities for new strategic, financing and offtake alternatives.

Mirabela on Wednesday said it planned to voluntarily delist from the TSX owing to the limited trading volume of its shares. It would maintain its listing on the ASX.

The company posted a gross loss for the first half of the year of $11-million, compared with the $17.5-million loss in the previous corresponding period, while the net loss for the six months to June reached $68.9-million, compared with the net loss of $60.6-million in the corresponding period of 2012.

Mirabela owns the world-class Santa Rita nickel sulphide mine, in Brazil.

The stock closed at C$0.03 apiece on Thursday, having lost 90% of its value since the start of the year.