SNC-Lavalin Group Inc. (SNC.TO) is shedding new light on the problematic mining contract that sent the company’s stock into a tailspin last month.

In a release Monday, SNC said it expects to reap “significant recoveries in the future” after agreeing to an arbitration process with the unnamed mining client.

"Management concluded that having the project claims fast-tracked into arbitration by an independent third party was the appropriate alternative, given the circumstances," SNC said in a release.

On Jan. 28, SNC disclosed "a serious problem" with a single project in its mining and metallurgy unit, contributing to a profit warning for the fourth-quarter and full-year that sent the company's stock down 27.8 per cent.

On Monday, SNC said the problems with the project in Latin America relate to "unexpected site conditions, greater than expected environmental and safety measures, and under-performance from sub-contractors."

While the Montreal-based engineering and construction firm said it believes the situation is "isolated," it warned on Monday its loss in mining and metallurgy will be larger than previously anticipated. Consequently, the firm now expects a 2018 full-year adjusted consolidated profit of $1.20-$1.35 per share, compared with its most recent forecast of $2.15-2.30 on Jan. 28.

SNC also said it expects full-year 2019 adjusted consolidated profit in a range of $3.00-$3.20 per share.

Against that backdrop, SNC disclosed Monday its lenders will temporarily provide some more breathing room on a key covenant, while pointing out it has no plan to issue stock.

Shares of SNC ended Monday trading down 7.38 per cent, or $2.71, at an even $34.00.