Barrick to develop third mine at El Indio

Exploration at the Chilean project known as El Indio has uncovered a new gold deposit, and Barrick Gold (TSE) expects it will form part of what would be its third mine in South America.

The Pascua mine, previously known as the Nevada project, lies in the Chilean Andes, 30 miles north of the Indio mine, which last year produced more than 190,000 oz. gold at a cash operating cost of US$168 per oz.

According to Barrick President Robert Smith, the capital cost of constructing the Pascua open pit will be “somewhere north of US$300 million, of which about US$50 million will be pre-stripping costs.”

The Pascua comprises two deposits, the Esperanza and Quebrada de Pascua, which host minable reserves totalling 48.6 million tons grading 0.07 oz. gold per ton (equating to a reserve of about 3.4 million oz.)

Startup is projected for late 1998, with annual capacity forecast at 300,000-400,000 oz. at a cash operating cost of US$200 per oz.

The decision to proceed with development of the Pascua was made following the discovery of the Quebrada de Pascua, which hosts 1.2 million oz. and remains open in at least two directions.

At the Esperanza deposit, to the west, reserves have increased to 2.2 million oz. from the original estimate of 1.8 million oz.

Additional targets around the planned Pascua pit could potentially augment reserves further. One of the prime targets, situated northeast of the Quebrada de Pascua, is the Nevada Norte.

The proposed Pascua open-pit complex is more than 17,000 ft. above sea level. Mining will employ crawler-mounted blasthole drills, hydraulic shovels, and a fleet of front-end loaders and 136-ton-capacity haulage trucks.

Ore will undergo primary crushing, grinding, carbon-in-leach processing, carbon stripping, electrowinning, retorting and induction refining to form a gold dore.

Meanwhile, at Barrick’s cornerstone Goldstrike property in Nevada, the Betze-Post mine continues to provide the bulk of the horsepower and cash flow for the company’s international expansion.

By Dec. 31, 1995, the Betze-Poste had produced more than 3.1 million oz., and reserves stood at 43.3 million oz.

Production at the mine increased by 10% over the past year, and cash operating costs remained low at US$183 per oz.

Meanwhile, Barrick is preparing to bring the Meikle mine into production in 1996. The mine is also part of the Goldstrike operation.

In 1995, Barrick earned US$292.3 million (or US82 cents a share) on revenue of US$1.3 billion, compared with US$250.5 million (US80 cents a share) on US$936.1 million in the previous year. Cash flow increased by 34% to S$502 million over the past fiscal year.

Of the US$105 Barrick plans to spend on exploration in 1996, roughly US$42 million is earmarked for areas surrounding existing operations, including US$22 million for the El Indio area. According to Barrick’s newly appointed chief operating officer, John Carrington: “We won’t leave any stone unturned, and if we can squeeze another ounce of gold from the ground, we will.” The major expects to spend US$8.5-10 million in Canada, US$25 million in South America and the rest in Africa, Southeast Asia and elsewhere.