Coeur d'Alene Mines (CDE: sentiment, chart, options) is down more than 7% at midday after J.P. Morgan analyst John Bridges downgraded the stock from "overweight" to "neutral." The bearish note came as CDE walked away from an alternative waste-disposal plan for its proposed Kensington Mine in Alaska. CDE's original plan, which called for tailings from the mine to be deposited in the Lower Slate Lake, prompted a lawsuit by 3 environmental groups. After an unfavorable ruling by the 9th Circuit Court of Appeals, the matter is now awaiting judgment by the U.S. Supreme Court.

Now that CDE is no longer pursuing permits for its alternative plan -- which involved processing the tailings into a paste for deposit along the Lynn Canal -- Bridges noted that "the development of the Kensington project will now be fully dependent on a favorable decision on the case from the Supreme Court." According to the analysts' estimates, the project is responsible for about 23% of CDE's net asset value.

Today's decline extends the stock's slump under resistance from its 10-week moving average. This trendline has smacked the shares lower since March, and effectively capped CDE's rally earlier this week.