TORONTO (miningweekly.com) – Gold streaming firm Sandstorm Gold’s TSX-listed stock on Friday took a C$0.27, or 5.95%, hit after it announced that it would reconsider its investment position on Colossus Minerals’ Serra Pelada gold/platinum/palladium mine, in Brazil.

The TSX-listed shares of Colossus on Friday also slid C$0.085 apiece, or 34%, after it announced that it would need about $70-million more in capital to complete construction of the mine, after it last month reported that development delays at Serra Pelada had resulted in a change to the expected production start date at the mine and that additional capital would be needed.

Colossus announced that it had decided to cease underground development at Serra Pelada in order to reduce ongoing costs. The company intended to continue with the dewatering programme at the mine and start underground definition drilling in connection with preparing a National Instrument 43-101-compliant resource estimate for Serra Pelada.

It had appointed Roscoe Postle Associates to complete the resource estimate, which was expected by the end of December.

“Sandstorm will be reviewing its investment in the company for a partial or full impairment as there can be no assurance that adequate funding will be available for Colossus in the future,” Sandstorm said.

Colossus’ ability to raise additional funds and its future performance were mainly tied to the health of the financial markets and investor interest in the gold mining industry. Financial markets were currently volatile, and likely to remain so to the end of the year and through 2014, reflecting ongoing concerns about the stability of the global economy, sovereign debt levels, global growth prospects and many other factors that could impact the company's ability to raise the funds needed to execute on its business plans.

Despite the company’s previous successes in raising funds to pay for operations and building the Serra Pelada mine, Colossus said there could be no assurance that adequate or sufficient funding would be available in the future on terms acceptable to the company.

“These circumstances indicate the existence of a material uncertainty, which may cast significant doubt as to the ability of the company to continue as a going concern,” Colossus said.

The Serra Pelada Mine is a joint venture between Colossus and Cooperativa de Mineração dos Garimpeiros de Serra Pelada, located in the state of Pará.

Shares of Sandstorm on Friday closed at C$4.27 apiece, while those of Colossus closed at C$0.165 apiece.