Win for Barrick's giant South America gold project
Plans by Barrick Gold (TSX, NYSE:ABX) to revive its Pascua Lama project straddling the border between Argentina and Chile received a boost on Wednesday after Chilean authorities rejected an attempt by local communities to block changes to environmental monitoring at the site.
The ministerial resolution can be appealed within 30 days and Reuters reports the Huasco Valley community which brought the challenge vowed to continue to fight to close down the project:
"The modifications in question related to the water monitoring system … and had been approved by Chile's environmental regulators some time ago," a Barrick spokesman said, adding the company would give a more detailed update with its year-end results in February.
In September, Toronto-based Barrick put a new executive in charge on the Argentine side (the Lama portion) as it looks to rework plans for the mothballed gold, silver and copper project.
Barrick, the globe's top gold producer, said it would develop a “modest, scalable starter project” on the Argentine side using underground mining methods. If successful, Barrick said it could use cash flow from Lama to fund additional development on both sides of the border over time.
Barrick will give a more detailed update with its year-end results in February
"Just as the Goldstrike mine was completed in stages over time, we see significant benefits to approaching Pascua-Lama in the same way,” President Kelvin Dushnisky said at the time.
Argentina has been an enthusiastic supporter of the project – while only around a fifth of the deposit is located in that country, many of the above-ground facilities will be built on that side of the border.
The giant project high in the Andes has been shuttered since 2013, when a Chilean court ordered the company to halt construction over environmental concerns. Later that year, Barrick shelved the open cut project citing massive cost overruns – projected costs had ballooned to over $8 billion with billions already spent.
In March this year, the firm began a “drastic revision” of Pascua Lama and in May, it agreed to pay $140 million to resolve a US class-action lawsuit that accused Barrick of distorting facts related to the project.
Pascua-Lama was set generate about 800,000 to 850,000 ounces of gold and 35 million ounces of silver per year in the first full five years of its 25-year life.