TORONTO — On May 7, 2009, Barrick Gold announced that it will proceed with development of its Pascua-Lama project that spans the border of Chile and Argentina. The company originally announced plans to begin mining in 2003, but the complicated nature of the bi-national negotiations and extensive environmental undertakings delayed the start of construction. The first gold pour is now planned for early 2013.
The Pascua-Lama deposit lies across the border of Chile and Argentina, which necessitated the first ever bi-national protocol for mining activity and taxation. First, questions about the movement of people and equipment in the pit (and across the border) had to be answered. Then, a tax treaty had to be negotiated to ensure Barrick was not subject to double taxation. Loading and haulage is not subject to withholding tax and will not loose value-added tax credits. The underlying principles of the agreement allow the remainder of the mining costs to be apportioned in each country based on the material moved in each one. About 75% of the pit will be in Chile.
This is a project worth waiting for. It is going to be huge. The project contains approximately 18 million oz of gold and 718 million oz of silver in reserves. Preproduction capital costs are estimated t US$2.8 billion to US$3.0 billion. For the first five years of operation, Pascua-Lama will produce between 750,000 and 800,000 oz of gold annually and 35 million oz of silver annually.
Cash costs will be rock-bottom: US$20 to US$50/oz of gold.
The Pascua-Lama project is located just 10 km from Barrick’s Veladero gold mine (see CMJ June 2005). Senior VP capital projects George Potter described the project. The mine will be a 300,000-t/d conventional truck-and-shovel operation. The strip ratio is anticipated to be <3:1 The crusher will sit in Chile, and crushed ore will be conveyed through a 4-km tunnel to the processing plant in Argentina.
The deposit contains two ores, a non-refractory type and a refractory sulphide type. The plant will have three milling lines, each with a capacity of 15,000 t/d. In year three of operation, one of the lines will be converted to treat sulphide ore at a rate of 10,000 t/d. The mill will employ conventional flotation and Merrill-Crowe recovery. It will produce doré bars and a gold-silver concentrate. Recoveries are expected to be 85% for gold and 81% for silver.
Engineering is 75% complete, according to Potter, and US$500-million-worth of long lead time equipment has been ordered. Construction is to begin in Q3 this year.
Mine life will be more than 25 years, and there is much more to look forward to in the Frontera District along the border. Barrick has a 2,600-km2 land position in the region. Total gold reserves contain as many as 30 million oz, and there is probably another 5.4 million oz in resources. Contained silver is estimated to be 944 million oz.
When the Pascua-Lama development opens up the Frontera District, Barrick will be literally and figuratively sitting on a gold mine — with the promise of more to come.
Additional information and photos from the Pascua-Lama project are posted at www.Barrick.com.