Barrick invests $550m to expand Peruvian mines

Barrick Gold (TSX:ABX) will spend half a billion dollars to expand two of its mines in Peru, Bloomberg reports.

Toronto-based Barrick, the world’s largest gold miner, says it will invest $550 million to expand operations at its Alto Chicama and Pierina mines by 2013.

Quoting the company’s country manager Darrell Wagner, Bloomberg states that the investment will serve to extend the minelives of both mines by four years, with production dropping as reserves are depleted:

(Barrick) is adding processing facilities and water treatment plants to tap lower-grade ore which became profitable after prices doubled over the past two years, Wagner said. Alto Chicama will produce 740,000 ounces this year and Pierina will produce 160,000 ounces, down from 850,000 ounces and 200,000 ounces in 2010, respectively.

Miners are increasingly tapping existing orebodies as gold ore grades deterioriate, and while the high price of the yellow metal, with the promise of good returns continue to make exploration profitable.