The low copper price has convinced Stratex (LON:STI) not to invest further funds into the Muratdere gold copper site in Turkey, it said on Monday.
The firm had been required to invest around US$1.28mln into partner Lodos to maintain its 30% interest to the end of 2016.
As it is the firm's stake is now reduced to 14.87%.
Stratex chairman Christopher Hall said: "The decision not to invest further funds in the project and to accept dilution is the right decision for this market, when capital needs to be used efficiently."
Since the time of an encouraging feasibility study last March, prices of copper and gold have declined from US$5,580/t and US$1,290/oz, respectively, he pointed out, resulting in less favourable projected returns.
"It is our estimate that the project IRR [internal rate of return] at today's metal prices has been reduced from 29% to c.14%, which is not an attractive basis for investment by Stratex."
Hall added: "There is no point in Stratex contributing anything, however small, unless we can be confident of seeing the project through either to completion or at least to the point where it can be monetised at a profit."
Stratex did say, however, it would continue to assess the supply-demand scenario for copper and may consider supporting future work.
Since listing in 2006, Stratex has discovered more than 2.2 million ounces of gold and 7.09 million ounces of silver, as well as 186,000 tonnes of copper.