Barrick Gold To Take $429 Million Charge At Pascua-Lama
(Kitco News) - BarrickGold Corp. (NYSE, TSX: ABX) says it will take a pre-tax $429 million impairmentcharge for the fourth quarter due to a reclassification of reserves at its Pascua-Lama project located on the border between Argentina and Chile.
Last month, Chile’s Superintendencia del Medio Ambiente orderedthe closure of existing infrastructure on the Chilean side of the project as partof a re-evaluation process ordered by the country’s Environmental Court. Barrickis appealing the resolution.
Nevertheless, Barrick said late Tuesday that the company isreclassifying Pascua-Lama’s proven and probable gold reserves of approximately14 million ounces, which are based on an open-pit mine plan, as measured andindicated resources.
“As a result, we expect to record an estimated pre-taximpairment of $429 million at Pascua-Lama in the fourth quarter of 2017,”Barrick said.
The company is scheduled to issue its next earnings report onFeb. 14.
Barrick said the Chilean issue does not affect an ongoingevaluation of an underground, block-caving operation at Pascua-Lama. This wouldrequire additional permitting and regulatory approvals in both Argentina andChile. Underground mining would address a number of community concerns byreducing the environmental impact, compared to an open-pit operation, Barricksaid. Also, the company said an underground operation would be less susceptibleto weather-related impacts during winter.
“In any underground scenario, Barrick would also close sitefacilities and surface disturbance in Chile not necessary for an undergroundmine,” the company said.
Barrick said it has formed a working group with Shandong Gold tostudy a potential partnership at Pascua-Lama, building on an existing jointventure at the nearby Veladero mine.
By Allen SykoraFor Kitco News
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