Barrick Gold announced on April 10, 2013, that construction work on the Chilean side of its cross-border Chile/Argentina Pascua-Lama gold-silver project had been suspended while the company worked to address environmental and other regulatory requirements to the satisfaction of Chilean authorities. In the interim, activities deemed necessary for environmental protection were continuing as authorized.
Construction activities were not affected in Argentina, where the majority of Pascua-Lama’s critical infrastructure is located, including the processing plant and tailings storage facility. Barrick said it was too early to assess the impact, if any, on the project’s overall capital budget and schedule.
Prior to the announcement, Barrick was targeting first gold production from the Pascua-Lama project in the second half of 2014.
Suspension of construction on the Chilean side of the project was based on a court order calling for the suspension. The court was responding to claims of indigenous communities and environmental groups that the project was causing environmental damage to glaciers and water supplies.
News reports from a number of sources, including Reuters, suggested the suspension could last for several months, and possibly up to a year.
In its year-end 2012 Pascua-Lama project update, dated February 14, 2013, Barrick noted that the project is based on resource of nearly 18 million oz of proven and probable gold reserves, with 676 million oz of silver contained within the gold reserves. Mine life is estimated at 25 years. The project is expected to produce an average of 800,000 to 850,000 oz/y of gold and 35 million oz/y of silver during its first five full years of operation at all-in sustaining cash costs of $50 to $200/oz of gold and total cash costs of $0 to negative $150/oz, including by-product credits.
Total capital cost to develop the Pascua-Lama project was estimated to be in the range of $8 billion to $8.5 billion.
As of December 31, 2012, approximately $4.2 billion had been spent on Pascua-Lama project development, and construction was approximately 40% complete. The 4-km-long tunnel that will convey ore from Chile to Argentina was approximately 70% complete. In Argentina, construction of the processing plant was advancing, with 60% of structural steel erected; and in Chile, construction of the primary crusher began in January 2013.
