Barrick to invest $34 million to extend Veladero’s mine life

Barrick’s Veladero mine, Argentina. (Photo by Antonio Gritta | Wikimedia Commons)

Barrick Gold’s (TSX:ABX)(NYSE:GOLD) CEO, Mark Bristow, announced this weekend that the company is planning to invest $34 million in its Veladero operation in western Argentina with the idea of extending the mine’s life until 2028. 

In 2018, Barrick’s share of Veladero’s production was 278,000 ounces of gold while for 2019, the Canadian company expects to produce between 230,000 and 250,000 ounces of the yellow metal.

According to Bristow, Barrick is in the process of reviewing Veladero’s geological model and assessing the possibility of expanding its footprint.

Since December 2017, Veladero is managed by Minera Andina del Sol, a joint venture between Barrick Gold and China’s Shandong Gold Mining

At a press event in the capital city of the San Juan province, where the mine is located, Bristow said that the Canadian company he leads wants to bring Veladero back to its glorious years. He said that between 2005 and 2018, the operation produced 8.7 million ounces of gold, which sold for $10.6 billion and generated $2.5 billion in royalties for the South American country. The massive revenue was also used to pay $648 million in salaries and $5.7 billion in purchases to local contractors.

“Some of that value around the mines should go to the communities around the mine. We take some of that value and we use it to develop, with the leaders in the communities, infrastructure and businesses -economic activity that will be able to continue after the mine closes,” Bristow said.

The CEO of the world’s top bullion producer by volume also mentioned that the firm is investing in water plants to make sure that towns and villages around the mine have access to clean water.

Barrick’s environmental record at Veladero has been under scrutiny since 2015, following three cyanide spills that took place in the span of 18 months. Only by mid-2017 was the mine able to resume full operations, once authorities lifted the restrictions they had imposed on leaching.

Another site that has been a cause of controversy due to environmental concerns, the Pascua Lama gold, silver and copper project straddling the border between Chile and Argentina, was also mentioned by Bristow. He said that Barrick is looking for opportunities to de-risk the project while keeping it as an option for future development. At present, the pre-feasibility study for the development of the 21.3-million-ounce deposit is suspended. 

However, the executive said that Barrick owns and is actively exploring a 34,000-hectare land package that includes mining rights in the Indian gold belt, a gold-rich terrain that spans Argentina, Chile and Peru.

“We are committed to investing in new discoveries and that budget, as of today, is $34 million, and that’s up till the end of next year,” Bristow said.