Barrick Reports Progress at Three Latin American Projects

In its first-quarter 2010 report, Barrick Gold provided the following updates on its Pueblo Viejo, Pascua-Lama and Cerro Casale gold development projects.

The Pueblo Viejo project in the Dominican Republic is advancing on schedule and in line with its $3-billion pre-production capital budget (100% basis), with overall construction nearly 20% complete and initial production anticipated in the fourth quarter of 2011. At the end of the first quarter, approximately two-thirds of the capital had been committed, and engineering and procurement by major EPCM contractors was over 90% complete. Significant long-lead-time items such as the autoclaves and oxygen plant were on schedule, site preparation earthworks were essentially complete, and about 57,300 m3 of concrete, or about 40% of the total, had been poured. Barrick’s 60% share of annual gold production in the first full five years of operation is expected to average 625,000 to 675,000 oz at total cash costs of $250 to $275/oz. Goldcorp holds the remaining 40% of the project.

Barrick also announced the signing of $1.035 billion (100%) in non-recourse project financing for Pueblo Viejo subsequent to the end of the first quarter. The lending syndicate comprises international financial institutions, including export credit agencies and commercial banks.

At Barrick’s Pascua-Lama project on the border of Chile and Argentina, detailed engineering was approximately 95% complete, and the project was on track to enter production in the first quarter of 2013. In Chile, the Barriales camp was about 50% complete, the crusher and workshop platforms had been cleared, mobilization of the tunneling contractor was moving ahead, and access to the portal had been established. On the Argentina side, modules for the Amarillos camp were being fabricated off site, and the early earthworks contractor had mobilized to site. The project remained in line with its pre-production capital budget of $2.8 billion to $3 billion, with approximately one-third of the capital committed. Average annual gold production is expected to be 750,000 to 800,000 oz in the first full five years of operation at total cash costs of $20 to $50/oz, assuming a silver price of $12/oz. For every $1/oz increase in the silver price, total cash costs for gold are expected to decrease by about $35/oz over this period.

At the Cerro Casale project in Chile, the selection process is under way for an EPCM contractor to advance basic engineering. Pre-production capital is expected to be about $4.2 billion (100% basis), and Barrick’s 75% share of average annual production is anticipated to be about 750,000 to 825,000 oz of gold and 170 million to 190 million lb of copper in the first full five years of operation at total cash costs of about $240 to $260/oz, assuming a copper price of $2.50/lb. A $0.25/lb change in the copper price would result in an approximate $50/oz impact on the expected total cash cost per ounce over this period. Kinross Gold holds the remaining 25% interest in the Cerro Casale project.

As featured in Womp 2010 Vol 05 -