Barrick to focus on scaled-back Pascua-Lama project in Argentina

Jaguar Mining

01/09/2016 17:51

By Susan Taylor 
    TORONTO, Sept 1 (Reuters) - Barrick Gold Corp  ABX.TO , the 
world's largest gold miner, said Thursday it has brought back a 
former executive to advance a scaled-back development plan for 
its suspended Pascua-Lama project that will first focus on 
Argentina. 
    The gold and silver project, which straddles the border of 
Argentina and Chile in the Andes Mountains, was put on hold in 
2013 due to environmental issues, political opposition, labor 
unrest and development costs that ballooned to $8.5 billion. 
    George Bee, who has 16 years experience at Barrick and was 
most recently Chief Executive at Jaguar Mining  JAG.TO , will 
work on a modest 'starter' option for a phased development plan, 
the company said.  
    Gold miners are increasingly doing "bite-sized" developments 
that carry less risk of budget disasters and fewer of the 
political and environmental disputes that have derailed 
mega-mines in recent years.  urn:newsml:reuters.com:*:nL1N0YQ2JK 
    Recent evaluation work indicates that a scalable underground 
mine plan at Lama may be the best option for a phased approach, 
Barrick said. 
    If successful, cash flow from Argentine operations could 
fund additional development "over time" on both sides of the 
border. Barrick said its Chilean unit was working to resolve 
legal, regulatory and permitting issues there. 
    Later, Bee will develop an integrated development plan for 
Barrick's Frontera district on the El Indio belt. 
    "We view the announcement as a positive for the shares as we 
believe that a phased development plan for Pascua-Lama would 
have the greatest potential to create shareholder value," RBC 
Capital Markets analyst Stephen Walker said in a note to 
clients. 
    "It would also provide sufficient technical and economic 
information to maximize an earn-in contribution by any potential 
JV (joint venture) partner." 
    Bee, named senior vice president for Lama and Frontera 
District development, was involved in Barrick's phased 
development of the Goldstrike mine in Nevada, the construction 
of the Pierina mine in Peru and development of the Veladero mine 
and Argentina. 
    "Just as the Goldstrike mine was completed in stages over 
time, we see significant benefits to approaching Pascua-Lama in 
the same way," Barrick President Kelvin Dushnisky said in a 
statement. 
    Shares in Toronto-based Barrick were up 5 percent at C$23.40 
on the Toronto Stock Exchange at mid-session. 
 
 (Reporting by Susan Taylor; Editing by David Gregorio) 
 ((susan.taylor1@thomsonreuters.com; +1 416 941 8083; Reuters 
Messaging: susan.taylor1.thomsonreuters.com@reuters.net)) 
 
Keywords: BARRICK GOLD MINE/DEVELOPMENT