Barrick Gold To Take $429 Million Charge At Pascua-Lama
(Kitco News) - Barrick Gold Corp. (NYSE, TSX: ABX) says it will take a pre-tax $429 million impairment charge for the fourth quarter due to a reclassification of reserves at its Pascua-Lama project located on the border between Argentina and Chile.
Last month, Chile’s Superintendencia del Medio Ambiente ordered the closure of existing infrastructure on the Chilean side of the project as part of a re-evaluation process ordered by the country’s Environmental Court. Barrick is appealing the resolution.
Nevertheless, Barrick said late Tuesday that the company is reclassifying Pascua-Lama’s proven and probable gold reserves of approximately 14 million ounces, which are based on an open-pit mine plan, as measured and indicated resources.
“As a result, we expect to record an estimated pre-tax impairment of $429 million at Pascua-Lama in the fourth quarter of 2017,” Barrick said.
The company is scheduled to issue its next earnings report on Feb. 14.
Barrick said the Chilean issue does not affect an ongoing evaluation of an underground, block-caving operation at Pascua-Lama. This would require additional permitting and regulatory approvals in both Argentina and Chile. Underground mining would address a number of community concerns by reducing the environmental impact, compared to an open-pit operation, Barrick said. Also, the company said an underground operation would be less susceptible to weather-related impacts during winter.
“In any underground scenario, Barrick would also close site facilities and surface disturbance in Chile not necessary for an underground mine,” the company said.
Barrick said it has formed a working group with Shandong Gold to study a potential partnership at Pascua-Lama, building on an existing joint venture at the nearby Veladero mine.