UK small caps lose 0.3 percent, outperforming the mid-caps the blue chips, which are down 0.8 and 0.6 percent respectively.
Avocet Mining tumbles 43.2 percent after revealing that its soleoperating mine might hold less economically extractable gold than it previouslythought, meaning it may need to raise new equity to buy back part of its hedgebook.
The stock traded over 17 times its average 90-day volume by 1045 GMT.
"They have a smaller mine with a shorter mine life but the same hedge andoverhead requirements, hitting viability as a stand alone business," Kate Craig,analyst at Liberum, says in a note.
"The magnitude production downgrade is clearly disappointing... However,until the finalised reserve and mine plan and quantum of hedge buy back areannounced we have very little visibility on forecasts or valuation," the notesays, maintaining a "Hold" rating on the stock.
The need to raise capital hit another small cap, with Talvivaara losing 4.2 percent. It is seeking to raise 260 million euros ($349million) through a rights issue to keep its nickel mine running, after a costlywaste water leak last year strained its finances.
Although the rights issue is endorsed by the company's top investors, stocksdipped on fears of dilution of existing shares.
Reuters messaging rm://alistair.smout.thomsonreuters.com@reuters.net