Barrick Gold reaches deal on Pascua-Lama

By Luis Andres Henao
The Associated Press

Barrick Gold said Wednesday that it has reached a preliminary deal with a Chilean indigenous group that it hopes will eventually open the way to restarting its Pascua-Lama mine high in the Andes.

The world’s biggest gold producer said the memorandum of understanding was worked out with 15 Diaguita communities, which are just downstream from the mine straddling the Argentina-Chile border.

The Diaguitas have complained that Pascua-Lama threatens their water supply and pollutes nearby glaciers. In May 2013, Chile’s environmental regulator blocked work at Pascua-Lama, citing “very serious” violations of its work permit. Then in October, Barrick announced it would suspend construction of the $8.5 billion (U.S.) mine.

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Barrick Gold talking to new Chile minister to restart Pascua-Lama

By Frik Els
MINING.com

pascua160Top gold miner Barrick Gold has met with officials from Chile’s mining ministry last week in an effort to restart construction of its troubled Pascua Lama project in South America.

Barrick Gold stopped construction of Pascua Lama in October as part of its debt-reduction program and after fierce opposition from local communities and environmental groups.

The Toronto-based miner has already spent $5 billion on the project which straddles the Chilean-Argentinian border which could have a final bill in excess of $8.5 billion after a series of cost overruns.

Chile’s new mines minister Aurora Williams, who was appointed in March after President Michele Bachelet assumed power told Reuters in her first interview with a foreign news organization:

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Barrick faces more legal troubles in Chile

By Clare Clancy
The Canadian Press

Barrick Gold is facing yet another class-action lawsuit from a group of investors as the Canadian mining giant struggles to adjust to faltering metal prices.

The lawsuit filed by a New York law firm focuses on one of Barrick’s South American mines.

The suit alleges Barrick violated federal securities laws by making false and misleading statements, and by concealing information related to the cost and development schedule for its Pascua-Lama project.

The project sits on the border of Argentina and Chile and is described on Barrick’s website as “one of the world’s largest gold and silver resources.”

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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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Gold decline uncovers miners’ debt woes

Barrick said it is postponing production at its Pascua Lama mine in Chile, where costs have ballooned to $8.5 billion from $5 billion.

By Alistair MacDonald
Wall Street Journal 

The recent plunge in the price of gold is exposing the large debt loads that big gold miners, such as Barrick Gold Corp., took on during the boom years.

Gold miners are scrambling to cut costs, sell assets and shore up finances, as credit-rating services talk of debt downgrades that threaten to add to the already increasing costs of future borrowing.

In the second quarter, the price of gold posted its largest quarterly decline since the start of modern gold trading. Gold fell 23% in the period to close at $1,223.80 a troy ounce on Friday. Already, the price of gold doesn’t cover the overall costs of many gold miners. Plummeting share prices have made financing the shortfall through equity markets hard.

“If prices below $1,300 are sustained for more than two quarters, without significant changes to spending, I would expect we could see ratings downgrades,” said Donald Marleau, an analyst at Standard & Poor’s Ratings Services.

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Chile halts troubled Barrick Gold project

By Fiona MacDonald
Proactive Investors

Construction on Barrick Gold Corp.’s beleaguered Pascua-Lama project has been halted by order of the Chilean government environmental regulator Friday, according to a statement on the agency’s website, the newest delay in the development of the trouble-plagued mine.

In addition, the mining giant was slapped with a fine of 8 billion pesos, about US$16 million, the maximum amount available under Chilean law, for violating terms stipulated in the environmental approval it was granted in 2006, according to a statement posted on the website of the Chilean environmental regulator.

The ruling, which follows a four-month investigation, will bring construction work on the site to a halt until the company puts in place the systems for containing contaminated water it previously agreed to implement.

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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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Barrick Gold hits glacier in Chile

Investors must heed growing sector risks

By Emmett Kodesh
Seeking Alpha

Barrick Gold (ABX), the world’s largest gold producer, has had a series of cost over-runs and delays in developing its mine at Pascua Lama on the border of Chile and Argentina. The issues in Chile climaxed this past week with an injunction barring inquiry about effects on a local glacier and neighboring communities. This latest and potentially very costly setback follows other problems Barrick has had with investments in developing nations. After reviewing these problems I will detail the current situation at Pascua Lama and discuss how it illumines the investment climate for miners and basic materials. This in turn affects your choices about sector allocation and global diversification.

On January 7, Pakistan’s High Court voided a lease Barrick held equally with its Chilean partner Antofagasta Minerals to develop a copper and gold mine at Reko Diq in Baluchistan in southwestern Pakistan. This project was expected to yield 600,000 tons of copper and 250,000 ounces of gold / year but work stopped in 2011 after the local government refused to renew the consortium’s mining lease. BHP Billiton (BHP) had the initial 1993 lease but left the field to Barrick because of resource nationalism issues which seem to be growing by the month.

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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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Kinross to shut down Chilean gold mine

By Cecilia Jamasmie
MINING.com

Canadian Kinross Gold Corporation plans to suspend operations at its La Coipa gold and silver mine in northern Chile in the second half of 2013, and has announced a “partial suspension,” to its workforce reports local newspaper El Nortero (in Spanish).

According to unionized employees at Compañía Minera Mantos de Oro, Kinross’s subsidiary in Chile, the firm had announced the closure would happen later this year, but last week’s meeting surprised quite a few. Now workers are calling for a general assembly to be held Tuesday and Wednesday this week, where they’ll decide what to do about Kinross notification.

However,  the mining company’s communications officer, Steve Mitchell, told MINING.com this is not the first time the union has heard of the company’s plans. And that, in fact, Kinross announced this decision when releasing its Q4 results in 2012.

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