Barrick Gold brings in new director to regain strength in Latin America
Canada’s Barrick Gold (TSX, NYSE:ABX) has decided to strengthen its position in Latin America, a market where it has experienced a series of challenges in the past three years, by hiring a new director with decades of mining experience in the region.
The world’s largest producer of the precious metal by output said the appointment of Pablo Marcet, who worked for 15 years for BHP Billiton and was president of Northern Orion Resources' South American operations before Yamana Gold acquired that company, reflects how important Latin America is for Barrick's long-term growth strategy.
"Mr. Marcet's deep operational and geopolitical experience in Latin America will be a vital asset as the company evaluates new investments in the region," it said in a statement.
Barrick has faced a string of challenges in the area in the past three years, particularly in Chile and Argentina, due mostly to environmental issues.
The Toronto-based miner has faced a string of challenges in the area, particularly in Chile and Argentina, due mostly to environmental issues.
It all began in 2013, when a Chilean court ordered the company to halt construction of its vast $8.5 billion Pascua-Lama gold, silver and copper project, which straddles the border with Argentina. Authorities charged Barrick with “very serious” violations to the country’s conservational laws, imposing a $16 million fine, Chile’s largest-ever. And while such penalty was later revoked, the company shelved the project later that year citing massive cost overruns and nose-diving bullion prices.
In May this year, Barrick agreed to pay $140 million to resolve a US class-action lawsuit that accused it of distorting facts related to the mothballed project.
Things in Argentina, a country that historically supported Pascua-Lama and Barrick, took a turn for the worse late last year, after a cyanide spill at Barrick’s Veladero mine in the San Juan province, which cost Barrick a $9.8 million fine.
Barely a year later, the gold producer had to halt operations at the mine again, after a fresh spill that happened on Sep. 8, when a pipe carrying process solution in the heap leach area was struck by a large block of ice, causing a leak.
Around that time, Barrick hired a new executive to lead the Argentine side of the halted Pascua-Lama project, revealing that it was planning to develop a “modest, scalable starter project” at Lama (the Argentine side), using underground mining methods.
Despite the hiccups, the company has gone ahead with more projects in the region, home to several of Barrick's biggest gold projects. These include the recent Alturas discovery, Cerro Casale and the highly prospective El Indio belt, all of them in Chile.
Barrick, which expects to produce at least 4.5 million ounces of gold a year through 2020, is also expanding to other countries in the region. In February, it announced it would spend $640 million to extend the life of it Lagunas Norte mine, in Peru, by about nine years.
The company also holds a 60% stake in Dominican Republic’s pueblo Viejo mine, a joint venture with fellow Canadian Goldcorp.