Canada-based copper producer Capstone Mining has suspended work on its Santo Domingo project in Chile and will cut capital expenditures by $20mn more than previously planned because of weak copper prices.
"A number of factors, including uncertainty over the future direction of copper prices and our financing capacity for the project, make capital preservation a priority," Capstone's chief executive Darren Pylot said.
"The most prudent course of action" in the current environment is to put the project "on hold," he said late yesterday, "while maintaining the optionality for future development when conditions improve."
Vancouver-based Capstone will halt all development work at the Santo Domingo project and downsize its two Chile offices, affecting 23 of 31 employees, it said. The previously announced 2015 budget of $19.4mn will be cut by $2.4mn, including severance costs, on the basis of Capstone's 70pc ownership in the project. Korea Resources holds the remaining stake.
Capital spending at its three operating mines, Pinto Valley in Arizona, Cozamin in Mexico and Minto in western Canada, will be cut by $17.9mn, or 13pc, from the initial budget of $136.8mn, to $118.9mn.
Overall production guidance remains unchanged, at 90,000t of copper for the year. Overall cost guidance was reduced to $1.95-2.05/lb from $2-2.10/lb.
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