ARGENTINE-CHILEAN border BARRICK GOLD expects to start construction this year on its Pascua-Lama gold-silver project, company CEO Greg Wilkins said this week. The property straddles the Argentine-Chilean border at an elevation of over 5,000 metres.
"We are putting the final touches on the engineering studies and will present it to the board for approval in the second quarter," said Wilkins during a webcast media briefing.
Wilkins also said the project’s economics were "robust" at current metal prices, emphasizing the "tremendous impact" that the 40% increase in silver prices over the last eight months had on the project’s large silver content. Pascua-Lama contains proven and probable reserves of about 17 million oz of gold and 580 million oz of silver.
Located seven kilometres from Barrick’s Veladero gold project, which is currently under construction in northwest Argentina’s province of San Juan, Pascua-Lama is expected to produce 800,000 oz of gold each year starting in 2008. Capital cost is estimated at US$1.18 billion.
According to Wilkins, Barrick regards Veladero as a "stepping stone" to moving Pascua Lama forward. "Veladero is the start of a very long-term, large-scale project," said Wilkins. "Together with Pascua-Lama, it will form one giant long-life mine."
Veladero is forecast to produce 525,000-550,000 oz of gold annually from an open pit mine and heap leach at total cash costs of US$155-$165/oz over the first 10 years. Construction began at the end of last year and the first gold pour is expected in the fourth quarter of 2005. The cost of the Veladero development is US$460 million.
Wilkins said that Barrick’s exploration budget for 2004 was US$110 million, and that he was "optimistic" that exploration would more than replace production this year.
Check out Barrick’s website at www.barrick.com.