Barrick updates Chilean, Argentine projects

Barrick Gold (ABX-T, ABX-N) has completed nearly 90% of the detailed engineering and procurement work at its Pascua-Lama gold mine project and says it is on track to start production in the first quarter of 2013.

The project, straddling the border between Chile and Argentina, remains in line with its pre-production capital budget of about US$3 billion and Barrick has committed more than 40% of the capital.

Roughly 6.8 million cubic metres of earth has been moved so far and the major earthworks for the mill and Merrill Crowe platforms should be finished shortly.

The major’s Barriales camp in Chile is almost complete, which means the workforce there can be increased to the permitted capacity, and initial occupancy of the Los Amarillos camp in Argentina is expected to start before the year-end.

In the first full five years of production, average annual gold production from Pascua-Lama should reach 750,000-800,000 oz. gold, Barrick forecasts.

About 10 km south of Pascua-Lama, Barrick’s open-pit Veladero gold mine in Argentina’s San Juan province outperformed the company’s expectations in the third quarter. The mine produced 360, 000 oz. gold at total cash costs of US$250 per oz. on higher grades from the Amable and Filo Federico pits, the company said in a news release.

Barrick expects Veladero, about 374 km northwest of the city of San Juan, will produce more than one million oz. gold this year. (Last year, the mine turned out 611,000 oz. gold at total cash costs of US$438 per oz.)

As of Dec. 31, 2009, Veladero’s reserves were estimated at 12 million oz. gold.

Elsewhere in Chile, at its Cerro Casale gold project in the Maricunga district of Region III, Barrick has done about 20% of the detailed engineering work and anticipates pre-production capital will come in at about US$4.2 billion (100% basis).

Barrick’s 75% share of average annual production is forecast to fall in the range of 750,000-825,000 oz. gold and 170-190 million lbs. copper in the first full five years of operation at total cash costs of about US$240-US$260 per oz.