Barrick’s 'world-class asset' begins production

The long-awaited debut of Barrick’s Pueblo Viejo, one of the largest gold deposits in the world, has finally arrived with the mine producing its first commercial gold, announced Barrick on Tuesday.

The $3.8 billion Barrick Gold mine (40%-owned by Goldcorp), located 100 km from the capital Santo Domingo, holds 25 million ounces of proven and probable reserves worth about $40 billion.

"Bringing this mine successfully into production on schedule, within capital guidance and with an excellent safety record is the result of tremendous efforts from across the company," said Jamie Sokalsky, President and Chief Executive Officer of Barrick.

"Pueblo Viejo is a world-class asset, one of only a handful of mines that will produce more than one million ounces of gold per year. We expect it to be a major contributor of low cost production to Barrick for decades to come," he added.

The next step for Pueblo Viejo is the remaining plant commissioning activities, with commercial production anticipated in the fourth quarter of 2012. Barrick's stake of 2012 production from Pueblo Viejo is expected to be 100,000-125,000 ounces at total cash costs of $400-$500 per ounce.

In its first full five years of operation, Barrick's share of production is anticipated to be 625,000-675,000 ounces at total cash costs of $300-$350 per ounce.

The Dominican Republic has attracted a lot of attention from miners recently and according to data published by the country’s geology society (Sodogeo) in June, the Caribbean nation is sitting on nearly $58 billion of unexplored reserves of minerals and metals.

Based on the entity’s calculations, the underground treasure trove comprises about 27 million ounces of gold, 168 million ounces of silver, 652 million pounds of copper, 6 billion pounds of zinc and 25 million pounds of nickel.

Given that the geological society pegs total reserves in the country at 27 million ounces there doesn't seem to be much gold on the islands beyond Pueblo Viejo.

Read more on “Dominican Republic: Sandy beaches, turquoise water and $58 billion waiting to be extracted“ >> >>

Image: A section of the ore ball mill arrives on site during construction of Pueblo Viejo mine. Courtesy of Barrick Gold.