Barrick Gold Gets Approval for Massive $3 Billion Mine in South America

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Researched by Industrial Info Resources (Sugar Land, Texas)--Barrick Gold Corporation (NYSE:ABX) (Toronto, Ontario) has announced that its Pascua-Lama gold and silver project is proceeding to the construction stage. The company made this decision after obtaining final construction permits and resolving key fiscal matters with the governments of Chile and Argentina. For details, see November 25, 2008 article - Cross-Border Tax Dispute Holds Up Gold and Silver Project in South America.

"We are building Pascua-Lama, one of the world's best undeveloped gold mining projects," said Aaron Regent, President and Chief Executive Officer of Barrick Gold. "Our focus over the last few months has been on resolving outstanding cross border permitting and tax matters, improving the capital and operating costs and project economics and advancing discussions with global financial institutions to provide project financing. We have made considerable progress on all these fronts which has culminated in our go-ahead decision." Pascua Lama will require a pre-production investment of $2.8 billion to $3 billion. Once operational, annual production is expected to reach between 750,000 and 800,000 ounces of gold, 35 million ounces of silver, and 4,800 tons of copper in the first five years.

Spanning the border of Argentina and Chile, Pascua Lama is being developed as part of the application of the Mining Integration Treaty and Associated Protocols between the countries, becoming the world's first bi-national mining project. About 80% of the deposit is in the northern Chilean region of Atacama about 120 kilometers south of the city of Vallenar, and the remainder is in the northwestern Argentine province of San Juan about 280 kilometers north of the province's capital, San Juan. A large part of the open pit will be in Chilean territory, as well as the mine equipment maintenance complex and other facilities. A smaller portion of the open pit will be in Argentine territory, as well as a processing plant, a tailings pond, a construction camp for about 4,000 people and an operation camp for 1,000 people. Fluor Chile S.A. (Santiago), a subsidiary of Fluor Corporation (NYSE:FLR) (Irving, Texas), was awarded an engineering, procurement and construction management contract for the project. Construction is expected to start in September 2009, with commissioning set for the fourth quarter of 2012 and commercial production planned for early 2013.

Barrick's South American operations consist of: the Pierina and Lagunas Norte gold mines in Peru; the Veladero gold mine in Argentina; the Zaldivar copper mine in Chile; Cerro Casale project in Chile; and the Pascua-Lama project. According to the company, this region hosts 50.5 million ounces of gold, or 36% of the company's overall proven and probable gold reserves.

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