TORONTO (Reuters) - Shares of Indonesia-focused mining company Kalimantan Gold Corp Ltd KLG.V dropped on Thursday after it said a subsidiary of U.S. miner Freeport-McMoRan Copper & Gold Inc (FCX.N) was withdrawing from a joint venture.
The joint venture had been formed in April 2011 to explore a copper project in Kalimantan, Indonesia. Kalimantan said Freeport’s decision was “not based on the geological prospectivity of the project.”
Freeport had funded some $33 million worth of exploration work at the property. TSX Venture-listed Kalimantan said some Indonesian groups have shown interest in the project, and that it would look into the possibility of other partnerships.
With rising capital costs and volatile commodity prices weighing on cash flow, major miners have slashed their exploration budgets over the last year.
Kalimantan shares KLG.L dropped 24 percent to 135 pence on AIM, the London Stock Exchange’s junior market.
Reporting by Allison Martell; Editing by Jeffrey Hodgson and Bernadette Baum