TORONTO, Jan 6 (Reuters) - Canada’s Eldorado Gold Corp said on Friday it has indefinitely shelved expansion plans for its Kisladag mine in Turkey and deferred a decision on developing a project in Brazil, citing lower gold prices.
Eldorado, which also operates in Serbia, Romania, Brazil and China, said that 2017 capital expenditures are now estimated at $425 million, well below a September forecast of $500 million to $580 million.
The reduction primarily reflects the suspended development of the Tocantinzinho project in Brazil and Kisladag, along with a rejigged spending schedule at Skouries in Greece.
Shares of Eldorado, which lowered the gold price it used in forecasting to $1,150 an ounce from $1,300 in September, fell 1.5 percent in early trade on the Toronto Stock Exchange to $4.70.
“While the deferral of the Kisladag expansion and Tocantinzinho project reflect the company’s focus on free cash flow under a lower gold price assumption, some investors may look at the lower production negatively depending on their gold price outlook,” RBC Capital Markets analyst Dan Rollins said in a note to clients.
Production and costs for 2017 matched RBC forecasts, Rollins added.
The company, which recently named a new CEO to take over in April, targets 2017 gold production of 365,000-400,000 ounces, down from a September forecast of 375,000 to 420,000 ounces.
The Vancouver-based company plans sustaining capital of $45 million at Kisladag, below the previous target of $50 million -$60 million. In September, Eldorado said it planned to spend $63 million over the next two years at Kisladag, expanding production to 310,000 to 320,000 ounces of gold through 2020.
The mine is expected to produce 230,000 to 245,000 ounces of gold in 2017 and then 285,000 ounces in 2018 and 2019, Eldorado said. Analyst Rollins expected output of 315,000 ounces in 2018-2019.
Eldorado also said it will cut 2017 capital spending at Tocantinzinho to $35 million from a previous estimate of $95 million to $105 million.
It will defer a decision on construction until all permits are secured and then consider gold prices, along with progress at priority developments, it said. Previously, Eldorado said that pending board approval, construction would start in 2017 with development capital costs pegged at $464 million.
All figures in U.S. dollars (Reporting by Susan Taylor; Editing by Dan Grebler)