Barrick says LatAm plans unaffected by gold price
By Tiffany Woods
SANTIAGO, Feb 27 (Reuters) - Canada's Barrick Gold Corp (NYSE:ABX - news; ABX.TO - news) is going full steam
ahead with two upcoming projects in Peru and Chile as well as with exploration despite depressed gold prices, a company
official said on Friday.
Vincent Borg, vice president of corporate communications, said Barrick's streamlined approach to mining makes this
possible.
''We're focused as opposed to looking at borderline, grassroots properties. Our focus is low-cost, high-quality
production,'' Borg said.
Barrick's No. 1 priority is getting its Pierina gold deposit in central Peru on line, which is expected to happen in
November, Borg said. The open-pit mine would produce 750,000 ounces of gold a year at an operating cost of $50 per
ounce, he said.
Reserves have increased to 7.2 million ounces of gold from 6.5 million, and it has resources of 900,000 ounces, he said.
Its second priority is exploring its Pascua project, which lies in northern Chile but has a property called Lama that spills
over into Argentina, he said.
Barrick's main concern with the deposit is ''getting its hands around'' the growing ore body and making the
corresponding modifications in construction plans, Borg said.
Barrick increased its proven and estimated reserves to 11.2 million ounces of gold from 10 million ounces, he said. The
deposit has another six million ounces of geological resources, he said.
''It's a nice dilemma to have to keep adjusting your engineering,'' Borg said.
Barrick has doubled Pascua's production estimate to 800,000 ounces of gold equivalent a year and forecasts cash costs of
$190 per ounce, he said.
Construction on the road to the deposit is underway and expected to be completed in August, Borg said, adding that
Barrick will submit the environmental impact study in the third quarter.
Barrick's 1998 global exploration budget is $72 million, which will be centered in North and South America. The firm
expects to produce three million ounces of gold this year with average cash costs to be $170 per ounce this year.
It sees output at 3.5 million ounces of gold in 1999 with cash costs falling to $150 an ounce, he said.
Barrick's stability now is a result of an aggressive cost-slashing program announced last September. Faced with lower
gold prices, the company said it would close five high-cost mines including its Tambo/El Indio gold complex in northern
Chile.
El Indio is to close at the end of this year, and Tambo will halt at the end of 1999 unless gold rebounds or a $7 million
exploration study currently underway there proves attractive, Borg said, adding that the results of the study will be known
in April. |
