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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