Barrick to push ahead with Pascua Lama, ‘no margin for error’

Barrick Gold stopped work at the project on the Chilean-Argentine border in October, after investing $5 billion in it.

Barrick Gold (TSX, NYSE:ABX), the world’s largest listed miner of the precious metal, said Wednesday it is confident its stalled Pascua Lama gold and silver project in South America will get built, but added it “does not have margin for error.”

Speaking to Chilean financial newspaper Diario Financiero (in Spanish), project executive Edmundo Flores said the gold giant is still looking for ways to take the project forward, despite the fact it may take years to get new permits and build the water system Chile’s top court indicated as main condition to let the miner resume construction.

The project, straddling the border with Argentina, has been halted for over a year over a mix of issues, including permitting problems, higher-than-expected costs and a sharp drop in gold prices. Pascua Lama has also faced the strong and organized opposition of the local indigenous communities, which pushed the company to officially mothball it in July.

Satellite view of the project area showing the Pascua-Lama open pit in red. (Wikimedia Commons)

The Canadian miner had already spent $5 billion on the project, which could have a final bill in excess of $8.5 billion after a series of cost overruns.

“The company has made significant changes. I think there’s definitely a way to move forward. It’s small, but it exists,” Flores was quoted as saying (in Spanish).

“We have to be careful, we can’t make mistakes… there is no room for error this time,” he added.

If built Pascua Lama is expected to produce around 850,000 ounces of gold and 35 million ounces of silver in its first five years.