Canadian gold mining company Barrick Gold Corp. (Barrick) has provided an update on the status of its Pascua-Lama project, located on the border between Argentina and Chile.
As previously reported, on 17 January, Chile’s Superintendencia del Medio Ambiente (SMA) ordered the closure of existing infrastructure on the Chilean side of the Pascua-Lama project. The sanction is part of a re-evaluation process ordered by Chile’s Environmental Court in 2014 and relates to historical compliance matters. The gold mining giant is currently appealing the resolution on a number of grounds, including on the basis that the sanction is disproportionate to actual environmental impacts.
According to Barrick, the resolution does not affect the company’s ongoing evaluation of an underground, block-caving operation at Pascua-Lama, which would require additional permitting and regulatory approvals in both Argentina and Chile, irrespective of the recent SMA decision. In any underground scenario, Barrick would also close site facilities and surface disturbance in Chile not necessary for an underground mine.
In light of the SMA order to close surface facilities in Chile, and current plans to evaluate an underground mine, Barrick is reclassifying Pascua-Lama’s proven and probable gold reserves of approximately 14 million oz, which are based on an opencast mine plan, as measured and indicated resources.
As a result, the company expects to record an estimated pre-tax impairment of US$429 million at Pascua-Lama in 4Q17.
According to the company, a shift to an underground operation would address a number of community concerns by significantly reducing the overall environmental impacts of the project, as compared to an opencast operation. An underground operation would also be less susceptible to weather-related production impacts during the winter season.