Fortescue Ltd (ASX: FMG) shares are on the slide on Thursday.

In morning trade, the iron ore giant's shares are down 1% to $15.83.

Why are Fortescue shares falling?

Investors have been selling the company's shares after it released an update on the staged ramp up of its Iron Bridge magnetite operation.

According to the release, following an optimisation assessment of the dry plant in the ore processing facility, Fortescue anticipates Iron Bridge shipments of 10 to 12 million tonnes (Mt) in FY 2026.

After which, it expects the operation to achieve an annualised production rate of 16Mt to 20Mt in the second half of FY 2027 (both on a 100% basis).

The company then notes that achieving Iron Bridge's nameplate capacity of 22Mt per annum is now targeted in FY 2028, with further process optimisation anticipated.

This is significantly behind schedule, with management previously targeting nameplate capacity by September of this year.

FY 2025 guidance update

In the immediate term, the company believes Iron Bridge is on track to safely and successfully achieve its FY 2025 market guidance for shipments and operating costs.

It also highlights that it remains an important operation for Fortescue, increasing production and shipping capacity, while complementing and enhancing its existing product portfolio.

What is driving this?

Management explained that a number of initiatives have helped Iron Bridge overcome premature erosion, which is impacting its ramp up. It said:

Consistent with Fortescue's track record of capital discipline, the focus on unlocking capability at Iron Bridge is through embedding operational learnings and implementing innovative solutions. In line with this approach, the assessment of the dry plant focused on optimising the performance of the air classification circuit and downstream aerobelt conveyors.

Workstreams included in-house redesign of the air classification units and installation of upgraded ceramic liners to address premature erosion. Iron Bridge's ore processing and production rate have improved as a result of these initiatives.

Should you invest?

The team at Goldman Sachs continues to believe that Fortescue shares are fully valued at current levels.

A recent note reveals that its analysts have retained their neutral rating and $15.60 price target on its shares. It said:

FMG is trading at ~0.9x NAV; however, still at a premium to RIO & BHP on our estimates; BHP at ~0.7x NAV and RIO at ~0.6x NAV, ~5.6x NTM EV/EBITDA (vs. BHP/RIO on ~4.7x/4.4x), and ~4% FCF vs. BHP/RIO on ~4%/-2%.

Fortescue shares are down 40% since this time last year.