Latest delay at Barrick's Pascua Lama could extend for 'weeks'

Construction of Barrick Gold's Pascua-Lama project straddling the border between Argentina and Chile is once again facing delays.

Santiago-based La Tercera, citing Chilean Mining Minister Hernan de Solminihac, reports the suspension of construction work due to health and environmental concerns may last for weeks.

Barrick (TSX: ABX) is working on removing overburden at the site high in the Andes and had already stopped work in the area on 27 October when it detected high levels of dust, even before the Chilean mining regulator ordered it to do so.

The company maintains the halt of pre-stripping is not expected to impact costs or the building schedule for Pascua Lama.

Construction in other sections of the project including the ore tunnel, the crusher and the camp is continuing and Barrrick says work on the Argentinian side of the project is not affected.

Barrick, the globe's top gold producer, has already sunk $2.8 billion into the ambitious project and in July announced a 50-60% cost blow-out for the mine that sent its shares skidding.

In June the company got rid of its CEO and in its latest set of results projected costs had escalated by a further $500 million and the final bill is now likely to reach $8.5 billion.

The miner has delayed start-up of the mine to mid-2014 saying "the challenges of building a project of this scale and complexity were greater than we anticipated".

The project has drawn strong opposition, particularly over water use and the impact on glaciers.

In early October, a Chilean appeals court accepted to consider a request for an injunction against the company and its project, filed by a group of northern natives in conjunction with the local government’s environmental evaluation committee.

The same month Chile’s Supreme Court struck down the planned 2,100-megawatt, $5 billion Castilla thermoelectric power plant project, citing environmental concerns. Pascua Lama mine was to be supplied with power from that project.

Pascua Lama will be one of the highest altitude mines in the world at between 3,800 and 5,200 meters above sea level. The average temperature through the year is 0°C.

Pascua Lama is set produce 800,000 – 850,000 ounces of gold and 35 million ounces of silver in the first full five years of its 25 year life.

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