Barrick Gold Corporation (ABX) announced that Copiapo Court of Appeals issued a ruling that the company must build water management system at the Pascua-Lama project before restarting construction activities in Chile.
The ruling states that the water management system must comply with the project's environmental permit to the satisfaction of Chile's Superintendence of the Environment (SMA). The ruling relates to a constitutional rights protection action filed in September 2012 on behalf of four indigenous communities.
In May 2013, on the basis of a resolution adopted by SMA, a fine of about $16 million was imposed on Barrick for not meeting the environmental control measures at its Pascua-Lama project. Barrick did not abide by the environmental standards, which eventually led the Chilean government to halt the construction on the Chilean side of the project.
Barrick stated that it has submitted a plan, subject to an approval by regulators in Chile, to construct a water management system in compliance with permit conditions. The system is expected to be online by the end of 2014.
Barrick halted construction work at the Pascua-Lama mine in Chile after a Chilean court issued a preliminary injunction citing environmental concerns. Barrick’s Pascua-Lama mine overlaps the border of Chile and Argentina and the court ruled in favor of the indigenous communities who complained that the project threatens their water supply.
The Pascua-Lama project is expected to be one of the world’s largest and lowest cost mines in the coming years. The mine’s expected annual gold production in the first five years is 800,000 to 850,000 ounces.
Barrick currently retains a Zacks Rank #3 (Hold).
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