Barrick outlines US$640mn Peru mine expansion

Canadian miner Barrick Gold, which expects gold production to fall for a sixth straight year in 2016, said it may invest up to US$2bn in four mining projects including its Lagunas Norte mine in Peru.

Potential investments include a US$640mn project to tap refractory ore beneath a layer of oxides in the main pit at Lagunas Norte, in La Libertad region, the Toronto-based company said in a statement.

The project, which would start construction in 2020 and come online in late 2021, seeks to produce 240,000oz at a cost of US$625/oz by installing a 6,000t/d grinding, flotation and carbon-in-leach processing circuit, Barrick said. A prefeasibility study added 2.1Moz in proven and probable reserves, it said.

Detailed engineering and permitting for the project, where Barrick seeks to amend the original environmental impact assessment, is expected to take four years, plus another two years of commissioning, it said.

The project would extend the life of Lagunas Norte, started up in 2005, by another nine years, according to the company. Barrick closed down its Peruvian Pierina mine last year. The processing facility could "unlock other potential refractory ore sources" in the area around the mine, Barrick said.

Lagunas Norte, which produced 560,000oz of gold and 32,926kg silver in 2015 at a cost of US$509/oz gold, is expected to see production drop to 410,000-450,000oz this year, while costs will rise to an estimated US$570-640/oz, according to the company.

Barrick, which also has operations in Chile, Argentina and the Dominican Republic, has set a US$1,200/oz gold price for the Lagunas Norte project and potential expansions at its operations in Nevada.

"We are focused on continually strengthening the economics of our projects as we incorporate further design improvements identified through detailed engineering and by the potential addition of new reserves and resources," Barrick said in the statement. "These are dynamic projects that continue to evolve."

Barrick, which produced 6.12Moz gold and 511Mlb copper in 2015, set production guidance this year at 5-5.5Moz gold. Capex will range from US$1.35bn-1.65bn this year.

Peru, the world's fifth largest gold exporter, produced 4.66Moz gold last year, according to the energy and mines ministry (MEM).

***

UPCOMING BNAMERICAS EVENTS

5TH Mexico Infrastructure Summit

Click here to see the agenda and speakers

4TH Mexico Oil & Gas Summit

Click here to see the agenda and speakers