In July, the company fired CEO Aaron Regent, and announced it would be hiring Fluor, the engineering firm which built its controversial Pueblo Viejo mine in the Dominican Republic, to take over the construction of Pascua-Lama.
Sokalsky, the new CEO, mentioned "external factors" also contributing to the soaring costs. Perhaps he was referring to the countless protests blocking access roads to Pascua-Lama that have held up construction crews, legal fees to represent Barrick in a number of ongoing court cases, or the consultants and academics it hired to prepare, as Jimenez put it, "thousands of pages" on the environmental impact of the project.
All of these costs are negligible, however, compared to what Pascua-Lama will bring once it is up and running, thanks to the incredibly low cost of producing gold at the mine, and the precious metal's high price on the market.
In fact Pascua-Lama will be one of the world's lowest-cost mines, because the sale of silver extracted as a by-product - about 665 million ounces - is expected to more than cover the cost of processing the gold. Barrick estimates that it will cost $25 to $50 to produce an ounce of gold, which closed at $1,697 on Friday. Compare that with the cost of producing an ounce of gold at Barrick's only mine in Canada, at Hemlo near Thunder Bay, Ont. In 2011, Hemlo produced 227,000 ounces of gold at $774 per ounce.
With a suitable compensation package, Barrick might be able to settle out of court with some of the various parties contesting the project, if Barrick's lawyers don't prevail.
One man, Jorge Lope-handia, now a dual Canadian/Chilean citizen, claimed he, not Barrick, holds the deeds to the most valuable parts of the Pascua-Lama territory. Another Canadian mining company, Mountainstar Gold Inc., based in Vancouver, is financing Lopehandia's ongoing suit against the Chilean government in a Santiago court, asking it to "extinguish" the Pascua Protocol signed with Barrick in 1994.