Barrick Gold Corporation – Page 53

Glaciers, protests and court cases slow Barrick in Pascua-Lama – by Catherine Solyom (Montreal Gazette – December 17, 2012)

December 18, 2012

http://www.montrealgazette.com/index.html

This series was made possible thanks to a Bourse Nord-Sud grant attributed by the Fédération professionnelle des journalistes du Québec and financed by the Canadian International Development Agency.

At the beginning of November, Barrick Gold’s CEO, Jamie Sokalsky, announced yet another jump in the estimated capital costs of the Pascua-Lama mine, from less than $1 billion in 1997, to $3 billion in 2009, to $8 billion in July, to $8.5 billion last month – with “first gold” extracted from the Andean mine closer to the end of 2014 than to the beginning.

But, Sokalsky assured shareholders once again, Pascua-Lama is the company’s “top priority.”

There are, however, a number of obstacles remaining on the bumpy road to Pascua-Lama, to the delight of some and the dismay of others, from legal wrangling in Chile over the deeds to the vast, frigid territory, to a Supreme Court of Argentina decision over whether any mining can take place there at all, given the presence of glaciers so close to the mine pit.

Capital costs, which may yet rise again when the company releases its year-end results in February might be the least of Barrick’s worries.

The seduction of gold in Pascua-Lama – by Catherine Solyom (Montreal Gazette – December 15, 2012)

December 18, 2012

http://www.montrealgazette.com/index.html

Who can resist it? Not Canadian giant Barrick, which is sinking $8.5 billion into a mine in the snow-capped Andes. Not Chile and Argentina, whose border is home to the massive project. Not a portion of the arid region’s residents who are benefiting from Barrick’s largesse. But with seduction comes risk, division and fear.

PASCUA-LAMA, ON THE BORDER OF CHILE AND ARGENTINA — Standing on a precipice 5,200 metres above sea level, the air is thin and the vistas are long.

Just breathing is difficult at this altitude, with a howling wind disturbing the utter majestic silence of the snow-capped Andes mountains, threatening to blow you over the edge. You’d think you were alone at the top of the world.

But what happens up here in Pascua-Lama, where Canadian mining giant Barrick Gold is developing the first open-pit gold mine to straddle two countries, will have a huge impact on the people living in the valleys below on both sides of the border – for better or for worse.

“Pascua-Lama is a third country in the Andes cordillera” – by Catherine Solyom (Montreal Gazette – December 15, 2012)

December 18, 2012

http://www.montrealgazette.com/index.html

This series was made possible thanks to a Bourse Nord-Sud grant attributed by the Fédération professionnelle des journalistes du Québec and financed by the Canadian International Development Agency

Barrick Gold’s Pascua-Lama mine project will have its own hospital, complete with operating room and X-ray facilities, an indoor sports centre, and housing for up to 10,000 people. It has its own customs and immigration office at one of the highest border crossings in the world, at an elevation of 3,700 metres.

And exclusive charter flights leave La Serena, Chile, and the country’s capital, Santiago, carrying engineers, mine workers and the occasional journalist, just barely clearing the tops of the jagged Andes mountains before landing on the Pascua-Lama airstrip.

It even has its own soccer team – probably a successful one, given the altitude at which the players train.

It is governed by a special tax treaty, which establishes how it will pay taxes and royalties to Chile and Argentina, and by the rules set down in the Bi-National Integrated Mining Treaty signed between the two countries in 1997.

Among other things, the mining treaty gives a company exclusive rights to use the water and other natural resources found within the territory, and suspends both countries’ constitutional prohibitions on economic activity or foreign property ownership near the border.

More than just costs are a concern at Barrick Gold’s $8.5B Pascua-Lama megamine – by Catherine Solyom (National Post – December 16, 2012)

December 16, 2012

The National Post is Canada’s second largest national paper.

Pascua-Lama, on the border of Chile and Argentina — Standing on a precipice 5,200 metres above sea level, the air is thin and the vistas are long.

Just breathing is difficult at this altitude, with a howling wind disturbing the utter, majestic silence of the snow-capped Andes mountains, threatening to blow you over the edge. You’d think you were alone at the top of the world.

After more than a decade of intense debate — often played out in front of the Canadian embassies in Santiago and Buenos Aires — the mine is set to open in 2014, and to produce 850,000 ounces of gold a year, as well as vast amounts of copper and silver.

Up to 10,000 people, many of them from the villages closest to the mine, will be employed during the construction phase and another 1,650 will operate the mine for at least the next 25 years.

Mining costs may be abating but labour worries persist (National Post – December 12, 2012)

December 12, 2012

The National Post is Canada’s second largest national paper.

It might be minimal, but miners appear to finally be feeling some cost relief.

Despite operating in a relatively healthy commodity-price environment, the past couple of years have been mostly miserable for mining executives, as soaring costs have crimped their margins and frustrated investors. Major projects have been called off or deferred because of low projected returns, and CEOs who couldn’t turn things around got fired. By mid-2012, it was clear that investors had lost all patience with under-performing companies.

Even so, the miners are feeling a bit more optimistic as 2013 approaches. While there are few firm numbers to back it up, anecdotal evidence suggests that cost inflation in the mining sector is beginning to slow down and come under control.

As projects got delayed over the past year and companies slashed their capital spending budgets, the incredibly tight markets for inputs such as equipment and consumables began to ease, experts said. They should soften even more over the next two or three years as the pipeline of projects gets thinner due to the deferrals. Many of the largest projects in the world are on hold, including the absolute biggest: BHP Billiton Ltd.’s US$28-billion Olympic Dam expansion in Australia.

First Nations prepare for the mining boom – by Ian Ross (Northern Ontario Business – December 6, 2012)

December 6, 2012

Established in 1980, Northern Ontario Business provides Canadians and international investors with relevant, current and insightful editorial content and business news information about Ontario’s vibrant and resource-rich North. Ian Ross is the editor of Northern Ontario Business ianross@nob.on.ca.

Charlotte Tookenay is the new face of the mining industry. The mother of two teenagers, a graduate of the Mining Essentials training program for Aboriginal people run through Confederation College, is part of an industry push to employ more First Nations people to replenish its workforce ranks.

At the Nishnawbe Aski Development Fund’s Mining Ready Summit in Thunder Bay in October, she presented the 200 delegates with a video montage of photographs during her 12-week time in the program last summer.

Tookenay graduated from the program last June and landed a job with Barrick Gold at its Hemlo complex, not far from her home community, the Pic Mobert First Nation on the north shore of Lake Superior.

She was spurred into making a career change out of sheer necessity. “Mobert has so little employment and job opportunities,” said Tookenay, who worked on highway construction jobs and as a Native language teacher.

Troubled Pascua Lama gold project experiences yet another setback – by Dorothy Kosich (November 12, 2012)

November 12, 2012

http://www.mineweb.com/

Chile’s mine health and safety regulator has requested a number of studies be presented for its consideration before it will allow the resumption of pre-stripping activities at Barrick’s Pascua Lama.

RENO (MINEWEB) – The costs and delays at the troubled Pascua Lama project–which already contributed to the dismissal of former Barrick CEO Aaron Regent–continue to mount as Chilean authorities halted construction work at portions of the project due to concerns about the health of workers at the site.

However, in a statement issued Sunday, Barrick said the order “only affects activities related to pre-stripping in Chile.” “Major construction activities on the Chilean side of the project, including work on the ore tunnel, the crusher and the camp will continue uninterrupted,” Barrick said in a news release. “Construction activities in Argentina are not impacted.”

“At this time, pre-stripping is not a critical path item in the construction schedule and a temporary halt is not anticipated to impact the overall project schedule or cost estimates,” the company said.

The Chilean newspaper La Tercera reported that safety inspectors from Chile’s National Geology and Mining Service (Sernageomin) visited Pascua Lama on October 24 and found there was an excess of fine particulates in suspension in the air.

Barrick now eclipsed by Goldcorp for title of largest market cap – by Peter Koven (National Post – November 6, 2012)

November 8, 2012

The National Post is Canada’s second largest national paper.

Barrick Gold Corp. is by far the world’s largest gold producer. It has the most mines and the most reserves. But it is no longer No. 1 where it matters most.

In recent days, Barrick has been eclipsed by Goldcorp Inc. for the title of largest market capitalization in the gold sector. It is an embarrassing development for Barrick, and comes shortly after the company went through a CEO change and reported massive cost escalation at its key growth project.

Goldcorp enjoys a premium valuation that Barrick can only dream of right now. Pawel Rajszel, an analyst at Veritas Investment Research, calculated that Goldcorp trades at 10.7 times forward cash flows, compared to 5.3 times for Barrick. Mackie Research Capital analyst Barry Allan has Goldcorp trading right at net asset value, while Barrick is at a 20% discount.

Their relative valuations prove that production is only a small part of the story when investors compare senior gold miners.

Barrick is aiming to churn out 7.3 to 7.8 million ounces of gold this year, more than triple Goldcorp’s guidance (2.35 to 2.45 million). However, Goldcorp has the better growth profile. While Barrick plans to have a production base of at least eight million ounces by 2015, Goldcorp hopes to reach 4.2 million ounces by 2016, nearly double the current level. And since Goldcorp has much less production, each mine that comes onstream has a greater impact on its earnings and cash flows.

The invisible gold rush – by Sean Phipps (The McGill Daily – November 5, 2012)

November 5, 2012

http://www.mcgilldaily.com/

Sean Phipps is a U2 Latin American Studies and Environment student. He can be reached at sean.phipps@mail.mcgill.ca.

Canadian imperialism and the gold mining boom

As I write this the price of gold is $1,776.80 an ounce, the highest it’s ever been, up from $1,023.50 in 2008 and $282.40 in 1999. Global economic instability has fueled this dramatic spike, and along with it a massive increase in gold production, an expansion that some have termed “an invisible gold rush.”

In Canada we – or at least some of us – directly benefit from this expansion. 75 per cent of the world’s mining companies (in both production and exploration) are Canadian registered, and several of the industry’s biggest players such as Barrick, Goldcorp, and Kinross are Canadian. And, with a government increasingly working to reflect the needs and interests of the extractive industry, these companies have emerged as key dictators of our country’s economic and foreign policy.

As a country, we are increasingly tied to gold. It is with this in mind that I chose to look at the long and often brutal history of gold mining, the way in which we have viewed gold over time, and to help piece together our strange relationship with this mineral.

Why gold? What has led us to value it above all other substances? Looking at a sample in the display cases in the Redpath Museum, it is hard to deny its beauty. However, gold’s real power has always been symbolic, for gold is wealth itself.

Production, labour, cost issues weigh down the world’s top gold miners – by Lawrence Williams (Mineweb.com – November 2, 2012)

November 2, 2012

http://www.mineweb.com/

With the exception of Goldcorp, third quarter results from the big five global gold miners are looking pretty dire.

LONDON (MINEWEB) – This doesn’t look like being a good quarter for the world’s top five gold miners, with only Goldcorp the exception. Both Barrick and Newmont have published figures for the quarter which will have seriously disappointed analysts, while South Africa’s two top producers have of course been suffering badly from the wave of worker dissent in their main country of production which followed on from the platinum mine strikes and the Marikana massacre.

Let’s consider the major miners individually:

Barrick Gold, the world’s largest gold miner, not only saw third quarter earnings fall by 55% compared with a year ago – but also had to report yet another increased capital cost estimate for its massive Pascua Lama project straddling the Argentinean/Chilean border. The project cost now stands at an enormous $8-$8.5 billion, effectively $1billion more than the previous figures only re-estimated a quarter earlier, and getting on for three times the original cost estimate of only three years ago.

This does not bode well for the final project capital cost – indeed the company intimated in its quarterly announcement that even these figures were not necessarily final – and the history of cost pressures suggests that any further adjustments are more likely to be up than down.

Costs rise again for Barrick’s Andes mine – by Pav Jordan (Globe and Mail – November 2, 2012)

November 2, 2012

Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

The Andean gold project that is key to driving future growth at Barrick Gold Corp. just got more expensive to build, and the company is still not done looking at costs.

The Toronto-based miner said the Pascua-Lama project, set in the mountains between Chile and Argentina, will now cost as much as $8.5-billion (U.S.) to develop. That’s higher than the shocking $8-billion price tag Barrick issued for the project in July, and more than double a $3-billion forecast when a construction decision was reached in 2009.

“You would expect that when they increased it by such a large amount a few months ago they would have been cautious so that they wouldn’t need to come back and disappoint us once again,” said George Topping, an analyst with Stifel Nicolaus who described the rise as “galling.”

Investors seemed to agree, driving the stock down more than 8 per cent on the Toronto Stock Exchange after Barrick announced the further cost overrun and said third-quarter profit fell by more than 50 per cent. Cash costs edged higher and the company sold less gold at lower prices. Shares of other gold miners also fell, dragged down by falling prices for the metal.

Tanzania’s president says critics misrepresent impact of development – by Michael Posner (Globe and Mail – October 11, 2012)

October 11, 2012

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

“There is so much distortion,” complains Jakaya Kikwete. “It’s ridiculous. You see important newspapers writing nonsense.” In an exclusive interview with The Globe and Mail last week, the 62-year-old Tanzanian President – in Canada on an official state visit – says critics are misrepresenting a planned, 480-kilometre highway that will partly traverse Serengeti National Park.

Environmentalists allege the road is designed to bring oil from landlocked Uganda to Tanzanian ports and will imperil the habitats and migratory patterns of wildebeest, zebra and other wildlife. Not so, maintains Mr. Kikwete, holding court at Rideau Hall, residence of Canada’s Governor-General.

“We are building 11,000 kilometres of new roads,” he explains. “The only people left out are the people living in these remote communities. So it’s a development need, not a need to bring oil from Uganda. Second, we are not building a tarmac road through the Serengeti. [And] these people live 80 kilometres away from the Serengeti, I don’t see a risk to wildlife when you build 80 kilometres [away].”

Rebounding gold miners ‘have got religion’ – by Pav Jordan (Globe and Mail – October 4, 2012)

October 4, 2012

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite

Buoyed by a new mantra of cost discipline, Canadian gold miners are starting to catch the wave of booming bullion prices after a summer of woe.

From major producers like Barrick Gold Corp., Goldcorp Inc. and Kinross Gold Corp. to junior explorers, gold mining stocks are booming, propelled by a shift in the industry to restrain spending and focus on profits and cash flow, rather than pursue reckless strategies that favoured growth at any cost.

The spot price of gold danced around $1,779 (U.S.) an ounce on Wednesday, or about seven times where it was a decade ago, when central banks were bailing out of the metal. Today, banks are piling back into gold to hedge their U.S. dollar reserves as forecasts for gold prices climb above $2,000 an ounce. And gold stock prices are beginning to catch fire.

Drastic shifts in corporate strategies are helping gold companies and their shares, repairing a disconnect between their valuations and the price of the metal. Risk-weary investors had favoured exchange-traded funds (ETFs) for exposure to gold, rather than shares of the miners themselves.