Barrick faces new setback, more pressure

By Brent Jang
The Globe and Mail 

Barrick Gold’s Pascua-Lama project

Barrick Gold Corp. has gained some breathing room with its decision to delay development of its Pascua-Lama project, but the company faces pressure to shrink its global mining operations amid tumbling metal prices.

Barrick says first production from the South American gold and silver venture will be postponed by more than 18 months, as the Canadian company forecasts taking a writedown of up to $5.5-billion (U.S.) on the project.

Toronto-based Barrick said it has opted to vastly scale back capital spending this year and in 2014 on the project, which is located in the Andes mountains and straddles the border between Chile and Argentina.

While construction of the $8.5-billion project has suffered another setback, the venture remains strategically important to the world’s largest gold producer, analysts say.

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Barrick may suspend Andes mine project

By Pav Jordan
The Globe and Mail

Barrick Gold Corp. is considering options that include suspending its key Pascua-Lama gold project in the Southern Andes in light of regulatory complications and uncertain commodities prices.

A court ordered construction halted earlier this month on the Chilean part of the $8.5-billion project, which is set between Chile and Argentina and is already billions of dollars over budget and facing delays of at least a year.

The Chilean court order on April 9 was followed by a sudden plunge in gold prices and news that Moody’s Investor’s Service had placed Barrick’s senior unsecured rating on review for a possible downgrade. Barrick’s share price has plunged in the aftermath to near record lows.

“The company will continue to evaluate all alternatives, in light of the uncertainties associated with the legal and regulatory actions, and the current commodity price environment, including the possibility of suspending the project,” Barrick said in a first-quarter earnings report where it also announced $500 million in cost cuts to be implemented over the course of the year.

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Goldrock reports costs of $703 an ounce

By Deborah Bacal
Proactive Investors

Lindero project is located 250 km due west of the city of Salta, northwestern Argentina

Goldrock Mines Corp. has moved one step closer to its goal of becoming a gold producer by unveiling results of a feasibility study for its Lindero project in Argentina, which the company says boast “modest capital requirements” and attractive cash costs.

The study, completed by a trio of consulting firms, shows an after-tax net present value, at a 5 per cent discount rate, of US$215 million, and an after-tax internal rate of return (IRR) of 33.4 per cent, using a gold price of $1,400 an ounce. The financials indicate average annual after tax operating cash flow of $57.4 million.

Capital costs were pegged at US$155.4 million, inclusive of 3 months of working capital, with additional sustaining capital of $2.67 million. The payback period was projected at just two years.

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Chile court suspends Barrick project

Project plagued by soaring costs, public opposition

Chilean demonstration against Barrick’s Pascua Lama mining project

Reuters

A Chilean court has suspended the construction of Barrick Gold Corp’s $8.5 billion Pascua-Lama gold and silver mine after indigenous communities said the project was destroying glaciers and harming water supply.

The northern appeals court of Copiapo will analyze the communities’ complaints of “environmental irregularities” against Barrick’s project, which is already plagued by soaring costs and stiff opposition from environmental groups.

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Brent Cook: How to turn rock into money

Brent Cook

What if the shockingly low valuations of some junior mining companies are really all they’re worth? As the market shakes off years of exuberance, Brent Cook, co-editor of the Exploration Insights newsletter, searches for the truly undervalued — finds as rare as gold itself. In this interview with Brian Sylvester of The Gold Report, Cook talks about high-margin deposits that the rest of the market can’t see.

The Gold ReportBrent, 2012 was difficult for many gold investors, and you paint a pretty bleak picture for certain junior mining companies in 2013 as well.

Brent Cook: We’ve actually had two pretty tough years on the TSX Venture Exchange. It is off about 30% from its peak in 2012 and around 20% for the year. That comes on top of a 35% decline in 2011. I do think much of the froth is washed out and we will see some opportunities in 2013.

During the most recent boom years, 2009 and 2010, roughly $11 billion ($11B) was raised on the Venture Exchange. Most of that has been spent without much success. Going by John Kaiser’s database of about 1,800 Venture Exchange listed companies, there are around 600 that now have less than $200,000 in the bank and a full 62% of the 1,800 companies have a median working capital of only $1.1 million ($1.1M) or less. These companies are trading at less than $0.20/share, which means that unless things improve dramatically in the next year, many of these companies are going out of business or will push excessive dilution on current shareholders just to stay alive. The Venture Exchange will truly be the land of the walking dead.

This coming year will be a cleaning-out process that in the long run is good for the sector.

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Barrick’s clean capitalism: Mixed results

By Catherine Solyom
The Montreal Gazette

Houses for the homeless, wireless Internet for remote villages, new computers for the local school, kite-sailing competitions, a centre for the disabled.

These are a few of the things Barrick Gold has helped finance during the last few years in communities living near its controversial Pascua-Lama mine, under construction in the Andes mountains on the Chile-Argentina border, as part of its commitment to corporate social responsibility (CSR), or as it is called in Spanish, “mineria responsable.”

If these programs sound like they are beyond the normal purview of a Canadian gold mining giant, that’s because they are. Barrick often works with local non-governmental organizations (NGOs) who are better acquainted with health and social problems in their own communities. The NGOs share their expertise; Barrick puts up the money.

It’s hard to be against CSR, now part of the playbook of most Canadian mining companies wherever they have set up shop around the world.

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Patagonia pours doré at Argentina mine

By Henry Lazenby
Mining Weekly 

TORONTO — TSX- and Aim-listed Patagonia Gold has migrated to the rank of a junior producer as it starts gold production at its Lomada de Leiva project, in the province of Santa Cruz, Argentina.

The company said on Monday it had poured the first 23.02 kg doré bar after commissioning the gold room production facility, located at its La Bajada property.

The final payable gold content would be established by assay and refining by Johnson Matthey, in Canada.

A total of 1040 kg of loaded carbon from the Lomada heap-leach trial, with a grade of 16 800 g/t gold was eluted, using the recently completed elution plant, before electrowinning and smelting.

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