TORONTO Jan 6 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
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
"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,
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
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)