Barrick Gold Corp. [ABX-TSX; GOLD-NYSE] is proposing an expansion of the processing plant and tailings capacity at its Pueblo Viejo gold mine in the Dominican Republic, a move that is expected to require capital expenditures of at least US$1 billion.
The expansion may extend the operation’s life to beyond 2030 and keep production over 800,000 ounces annually beyond 2022. A pre-feasibility for the plant expansion and additional tailings capacity is expected in the second half of 2019, followed by a full feasibility study in 2020.
Barrick Gold President and CEO Mark Bristow said the proposed investment was further evidence of the joint venture partners’ long-term commitment to the social and economic development of the Dominican Republic.
Barrick shares eased 0.94% or 15 cents to $15.78 on volume of 1.9 million Tuesday May 28. The shares trade in a 52-week range of $12.54 and $19.49.
Barrick holds a 60% interest in Pueblo Viejo, which is located approximately 100 km northwest of the capital city of Santo Domingo. The other 40% is owned by its joint venture partner Newmont Goldcorp [NGT-TSX; NEM-NYSE].
Development of the project started in 2009 and the first production occurred in 2012.
The mine is expected to produce between 550,000 and 600,000 ounces this year at an all-in-sustaining cost of US$610-US$650 an ounce.
In 2018, it produced 581,000 ounces of gold at an all-in-sustaining cost of US$623 an ounce.
Bristow noted that the joint venture partners have already invested US$5.2 billion in Pueblo Viejo, which represents almost 20% of the total foreign direct investment in the Dominican Republic over the past 10 years. Direct cash taxes paid by the mine amounted to US$1.6 billion, which represents 57% of the cash distributions compared to 43% earned by the joint venture partners.
Since 2013, the mine has accounted for 30% of the country’s exports, and generated a net added value of US$5.7 billion and a total net added value of US$8.5 billion, equal to 2% of the Dominican gross domestic product.
“Some 96% of the mine’s employees are Dominicans and this has also had a significant impact on the lives of more than 90,000 people in the neighbouring communities who have benefited from its community upliftment programs,” Bristow said.
“It has also promoted the development of the local economy, spending more than $123 million with local contractors and suppliers over the past six years,” he said.
Pueblo Viejo consists of two open pits, Moore and Monte Negro, and is mined by conventional truck and shovel methods. The processing plant has a design capacity of 24,000 tonnes per day and the average processing rate in 2017 was 21,875 tonnes per day.
The earliest records of Spanish mine workings at Pueblo Viejo date back to 1505.