CANADIAN MINING PERSPECTIVES: Barricks project pipeline offers multiple metal opportunities

Only two years ago CMJ profiled BARRICK GOLDs development projects (see CMJ June 2005), among them six new gold mi...
Only two years ago CMJ profiled BARRICK GOLDs development projects (see CMJ June 2005), among them six new gold minesCowal, Tulawaka, Ruby Hill (East Archimedes), Veladero, Lagunas Norte and Pascua-Lama. Together they had a capital cost of roughly US$2.8 billion. Today five of them are pouring gold; the exception is Pascua-Lama.

Barricks project pipeline is again packed with possibilities thanks to its takeover of Placer Dome. And Barrick is branching into copper, PGEs and nickel.

The PASCUA-LAMA gold project straddles the Chile-Argentina border, high in the Andes Mountains. This will be an open pit and 45,000-t/d mill producing 750,000 to 775,000 oz of gold and 35 million oz of silver during each of the first five years of production. The capital cost of the project has ballooned to well above US$2 billion, but operating costs for the first five years have been trimmed nearly in half to US$40-50/oz of gold. Barrick received environmental approval from both countries governments last year, on the condition that it not try to move a glacier on the Chilean side of the border. Proven and probable reserves contain 17 million oz of gold, 689 million oz of silver and 565 million lb of copper.

The CORTEZ HILLS gold property in Nevada is part of the Cortez joint venture with Kennecott Explorations of Australia (40%). The 2007 plan calls for 60,000 m of drilling, detailed re-engineering and procuring a mining equipment fleet. After an expenditure of up to $500 million, Cortez Hills will produce about 425,000-440,000 oz of gold annually at a total cash cost of US$290-300/oz during the first 10 years of its operation. Proven and probable reserves contain 11.2 million oz of gold. Ore will be treated at the nearby Cortez Pipeline mill.

The BUZAWAGI copper-gold property in Tanzania has proven and probable reserves of 2.64 million oz of gold and 118 million lb of copper. Permitting and detailed engineering should be completed this year, and then construction of a 240,000-250,000 oz/y producer would take two years. Capital costs are estimated at US$400 million, and total cash costs will probably be US$280-290/oz.

The PUEBLO VIEJO gold project in the Dominican Republic is a joint venture of Barrick and Goldcorp (60%). Gold resources are 18.1 million oz, but the deposit also has recoverable amounts of zinc, copper and silver. The environmental impact statement (EIS) needs to be updated in regard to recovering metals other than gold, and basic engineering will be conducted this year. It would take a capital investment of US$2.1-2.3 billion to build a 20-year mine and mill that could produce 575,000-600,000 oz of gold annually at a cash cost of US$285-295/oz.

The DONLIN CREEK gold project in Alaska has reached the feasibility study phase. It is operated by Barrick (30% and an option to earn up to 70%), and NovaGold (70%) is the partner. This year US$87 million will be invested to complete the feasibility study and conduct 70,000 m of infill and in-pit drilling. Measured and indicated resources contain an estimated 19.8 million oz of gold.

In Pakistan the REKO DIQ copper-gold project is a partnership of Barrick (37.5%), Antofagasta (37.5%) and Baluchistan Development Authority (25%). The project is at the scoping study stage, but is thought to contain over 21 million oz of gold and nearly 27 billion lb of copper.

The SEDIBELO PGM project lies in the Bushveld Complex, where 80% of the worlds platinum resources are found, in South Africa. It is a 50:50 joint venture between Barrick and the Bakgatla Ba-Kgafela Community. Barrick plans to spend US$26 million on exploration and finishing a pre-feasibility study this year. The Sedibelo deposit contains 9.1 million oz platinum and 3.2 million oz of palladium.

In northwest Russia is the FEDEROVA PGM project containing perhaps 7.1 million oz of platinum and 4.7 million oz of palladium. Drilling and work on a pre-feasibility study will cost US$30 million this year. The project is a 50:50 joint venture with CJCS/CEM, but Barrick has a right to earn up to 79% interest.

In a move away from gold, Barrick is half-owner of the KABANGA nickel sulphide deposit in Tanzania. The other half is owned by the operator, Xstrata. Barrick says the deposit is reminiscent of Voiseys Bay in Labrador. The measured and indicted resource is 97 million t at 2.37% Ni, and there is an inferred resource of 36.3 million t at 2.8% Ni. Xstrata has committed an additional US$95 million to the project and plans to complete a full feasibility study by the end of 2008.

It looks like Barrick will have the financial resources, as well, to advance the nine projects now in its pipeline. The company released figures for another record-setting year. For 2006, net income was US$1.51 billion and operating cash flow was US$2.12 billion. The company produced 8.64 million oz of gold and 367 million lb of copper. And the most telling number is 123 million ozthe gold contained in reserves at the end of 2006the highest level in the industry.


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