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Canadian miner Barrick Gold (TSX, NYSE: ABX), the world's largest producer of the precious metal, continues to explore opportunities in order to move its troubled US$8.5bn Pascua Lama project forward, including strategic partnerships and royalty agreements.
While discussing its 2013 financial and production results, CFO Ammar Al-Joundi said that suspending development of Pascua Lama "was not an easy decision to do by any means, but it was the right thing to do."
"The suspension will allow for us to catch our breath, regroup and rethink how to better develop the project," Al-Joundi said.
The decision to suspend the project, located on the border of Chile and Argentina, was announced in October last year, following a string of legal cases filed against Pascua Lama related to environmental and water issues on the Chilean side of the border.
Al-Joundi said that a decision to restart development will depend on a number of factors, including "improved project economics and reduced uncertainty related to legal and regulatory requirements."
"Subject to these improved conditions, the remaining development will proceed in distinct stages, each with specific work programs and budgets, in order to facilitate better execution and improved cost control."
The executive said ramp-down of Pascua Lama is on schedule to be completed by mid-2014, and will be largely done at the end of the first quarter.
Barrick said in its results that it expects to have US$300mn in costs related to the project in 2014. CEO Jamie Sokalsky said that a large portion of that amount "is front weighted to the first half, because we're still demobilizing workforce in Argentina."
Asked during the conference call what the cost of care and maintenance of Pascua Lama will be once demobilization is completed, Sokalsky said initial estimates put it at US$10-15mn per month.
Average annual production at Pascua Lama is expected to be 750,000-800,000oz of gold in the first full five years of operation, plus 35Moz/y of silver.