Fluor Corporation (FLR) recently received a series of follow–on contracts from Toronto-based Barrick Gold Corp. The contracts are for the Pascua-Lama mining project located on the Argentina/Chile border. A contract win of a gold project is one of these and its value is still undisclosed. The deal is included in the fourth quarter of 2012 backlog of Fluor.
As per the deal, Fluor will be responsible for the overall project management and construction management for the Pascua location on the Chile side of the site. The company will also take charge of construction management and construction of the Lama location on the Argentina side in a 50/50 joint venture with Argentinian contractor Techint. Among all the mining projects throughout the world Pascua-Lama project is said to be one of the most important and difficult.
The Pascua-Lama mine site spans across a region called Cordilera, on the border of Argentina and Chile, at an altitude of 3,800 to 5,200 meters on the Andes Mountains. When completed the mine is expected to produce an average of 800,000 - 850,000 ounces of gold and 35 million ounces of silver in its first full five years of operation.
The company recently completed the Pueblo Viejo project of Barrick Gold in the Dominican Republic successfully. The project involved a new processing facility for one of the largest undeveloped gold resources in the world and had the largest foreign investment in the nation’s history. It hopes to maintain a cordial relation with Barrick Gold and is confident of winning more such projects in the future. Fluor has the reputation of handling difficult mining projects.
Fluor serves a diverse set of industries worldwide, including oil and gas, chemical and petrochemicals, transportation, mining and metals, power, life sciences and manufacturing. It is also a primary service provider to the U.S. federal government.
Fluor currently has a Zacks Rank #3 (Hold) while some of its competitors such as Jacobs Engineering Group (JEC), Tyco International Ltd. (TYC), Clean Energy Fuels Corp. (CLNE) carry a Zacks Rank #2 (Buy).
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