Canada-based Lundin Mining has scrapped plans to purchase a controlling stake in the Touro copper project in northern Spain.

Under an agreement signed with private investors in April 2012, the company had the option to purchase an 80% interest in the project before 1 October 2012 for an estimated price of €60m.

A detailed due diligence program showed that the project in the La Coruna province would not provide sufficient economic returns to meet the company’s investment criteria, Lundin said in a statement.

CEO Paul Conibear said, "Despite the diligent efforts of our team and the cooperation of the authorities, the local community and the owners of the project, we unfortunately are not able to progress with the Touro project."

By the close of Wednesday, the $2.8bn miner was trading down 3.4% at $4.79 on the Toronto big board.

Located in the La Coruña province of the Galicia region, the Touro project consists of 205 mining claims spread across 57.4km².

The copper-gold mineralisation of the project is characterised by strongly disseminated to semi-massive and rarely massive sulphides comprised of a simple, coarse-grained assemblage of pyrrhotite, an iron sulphide, and chalcopyrite, a copper-iron sulphide, locally associated with some gold.

Lundin Mining has operations in Portugal, Sweden, Spain and Ireland, producing copper, zinc, lead and nickel.