Barrick Reports Go-Ahead of Pascua-Lama

 

TORONTO, ON - Barrick Gold Corporation reported that its Pascua-Lama project is proceeding to construction. The Company has finalized the project's economic parameters, received key construction permits, satisfactorily resolved key outstanding fiscal matters with the governments of Chile and Argentina, and is engaged in discussions for project financing.

"We are building Pascua-Lama - one of the world's best undeveloped gold mining projects," said Aaron Regent, President and Chief Executive Officer. "Our focus over the last few months has been on resolving outstanding cross border permitting and tax matters, improving the capital and operating costs and project economics and advancing discussions with global financial institutions to provide project financing. We have made considerable progress on all these fronts which has culminated in our go-ahead decision today. The combination of the project's attractive economics, significant production at low cash costs, and support by the governments of Chile and Argentina for this environmentally responsible project will generate enduring and substantial benefits for all concerned - including employment opportunities, economic and social development for the people of Atacama, Chile, and San Juan province in Argentina."

Pascua-Lama's pre-production construction estimate is $2.8-$3.0 billion(1), with expected average annual production of about 750,000-800,000 ounces of gold and 35 million ounces of silver in the first full five years. The anticipated total cash costs are $20-$50 per ounce(2) - which would make Pascua-Lama one of the lowest cost gold producing mines in the world.

Other key parameters include:

- Currently estimated operating mine life of 25-plus years with average annual production of about 600,000-700,000 ounces of gold and 20-25 million ounces of silver at a total cash cost of $200-$250 per ounce;

- Open pit design with ore processing by wet grind milling and conventional gold recovery methods;

- Approximately 300,000 tonnes per day (tpd) mining operation with a strip ratio of less than 3:1;

- 45,000 tpd processing throughput;

- Average expected recovery rate of 85 percent for gold and 81 percent for silver; and

- Power to be sourced from Chile under a power purchase agreement.

The long-life, low cash cost project has 17.8 million ounces of proven and probable gold reserves and 4.7 million ounces of measured and indicated gold resources as at year end 2008; the gold reserves contain 718 million ounces of silver.(3) (The reserves are based on a long term gold price assumption of $725 for reserves and $850 for resources.) Approximately 75 percent of the ore body lies in Chile and 25 percent on the Argentine side of the border.

Development of Pascua-Lama, combined with production from Barrick's nearby Veladero mine will further increase gold production in the highly prospective Frontera district.

The company’s address is 161 Bay Street, Suite 3700, Toronto M5J 2S1, (416) 861-9911, fax: (416) 861-2492.