Amid projected capital expenditure reductions up to $1.8 billion, Barrick Gold Corp. officials expect to begin construction by Q4 2014 at their Pascua-Lama project after submitting water management plans to Chilean regulators. Production by the world’s top gold miner at the asset that straddles Chile and Argentina in the Andes mountains is expected by Q3 2016.
Within this timeframe, and given slackening metal prices, Barrick officials said they will seek facility construction re-sequencing in Argentina, in lieu of previous Q3 2014 production estimates. In its first five years, the Canadian company forecasts up to 850,000 gold oz of annual production.
Although the changes will result in staffing reductions over construction extensions “the change in expenditures will not affect the mine’s significance,” said CEO Jamie Sokalsky. “When complete, Pascua-Lama will be one of the world’s great, low-cost gold mines. In light of the environment we are facing today—and taking into consideration construction delays—the company is advancing the project in a prudent manner.”
Current capital expenditures by 2014 now total between $1.5 billion and $1.8 billion, with a 2013 reduction of $700 million to $800 million to $1.8 billion to $2 billion, respectively. Expenditures at the site for 2014, meanwhile, are slated to be reduced by $8 million to $1 billion.
In its Q1 2013 report, Barrick suggested a renewed assessment for long-term gold and silver and is accordingly reviewing other assets for possible impairment by Q3 2013, pending potentially significant, unfinalized analyses.
“This mine has significant and strategic value for shareholders and the project’s host jurisdictions,” Sokalsky added. “We continue to work with the governments of both countries to ensure Pascua-Lama is on the path to deliver value for all our stakeholders.” Barrick also awaits a ruling by Chile’s Copiapo Court of Appeals regarding a Q4 2012 suit by local indigenous communities seeking a construction injunction.