Dragon Mining has terminated the existing agreement on processing flotation concentrate from Endomines' Pampalo mine at the Svartliden leaching plant in Sweden.
Dragon Mining said that its Svartliden operations have experienced high levels of copper in the discharge water.
Even though these levels are low, they are still high enough that water must be cleaned to comply with the Svartliden environmental permit.
The Svartliden plant, which is a conventional comminution and carbon in leach circuit, has a design capacity of 300,000t per year.
The plant had processed 3,181,923t of ore and produced 380,335oz of gold by the end of September last year.
Additionally, 1,417t of external concentrates were processed producing 4,124oz of gold at the plant.
Dragon Mining management felt that the cost of cleaning the water is significant.
Endomines plans to hold discussions with other customers for the flotation concentrate.
Endomines CEO Markus Ekberg said: "The elevated levels of copper in our concentrate may partly be related to mining from the new mineralisations.
"The decision made by Dragon Mining is ill-timed as we have lately been processing ore from relatively high-grade areas in our processing plant.
"We presume, however, that Dragon Mining will comply with all termination clauses in our agreement, to allow us adequate time to reach an agreement with other customers."