Barrick Gold Corporation (ABX) is relieved after the Supreme Court of Chile issued a ruling which uphold the environmental approval for the Pascua-Lama project in Chile.
The ruling says that Barrick will have to complete the project’s water management system according to its environmental permit to the satisfaction of Chile's Superintendence of the Environment (SMA), as previously decided by the Copiapo Court of Appeals. Barrick can resume the construction work in Chile once the SMA permissions are met.
The decision given by the Supreme Court brings an end to the constitutional challenge filed by four indigenous communities against the Pascua-Lama project in September 2012.
Barrick plans to complete the new system by the end of 2014 to satisfy Chilean regulatory authorities. However, completion of these works depends on the regulatory approval of specific permit applications.
Barrick halted construction work at the Pascua-Lama mine in Chile after a Chilean court issued a preliminary injunction on Apr 10, 2013 citing environmental concerns. The injunction was issued after the four indigenous communities complained that the project is threatening their water supply and polluting glaciers. The mine was charged with ‘environmental irregularities’ while constructing the world’s highest-altitude gold and silver mine.
The Pascua-Lama mine is located at the Chile–Argentina border. It is one of the world’s largest gold and silver resources with nearly 18 million ounces of proven and probable gold reserves, 676 million ounces of silver contained within the gold reserves, and an anticipated mine life of 25 years.
Pascua-Lama’s expected annual gold and silver production in the first five years is 800,000 to 850,000 ounces and 35 million ounces, respectively. Construction activities in Argentina, where the majority of Pascua-Lama's critical infrastructure is located, were not affected by the suspension of the Pascua-Lama project in Chile.
Barrick, which currently retains a Zacks Rank #3 (Hold), will release its third-quarter 2013 results on Oct 31 before the opening bell.