A second straight day of cost superlatives for Argentina real estate. First McDonald’s makes front page news in Buenos Aires, and now the world’s largest gold producer hits a San Juan speed bump with its Pascua-Lama megamine.
Barrick Gold made the announcement during yesterday’s quarterly earnings call. The mine, originally scheduled to commence production in 2013 will now begin in mid-2014. Argentine inflation and project management were two of the reasons cited by management for the delay.
According to Mineweb’s Dorothy Kossich, the Pascua-Lama project was originally scheduled to cost US$3 billion in 2009. That estimate rose to US$5 billion by the beginning of this year and with yesterday’s revision the price tag just surged another US$3 billion to US$8 billion.
Despite the short-term setback, Barrick management would probably remind shareholders to keep their eye on the gold and silver-plated prize at the end of the shaft. Pascua-Lama has proven reserves of 17.9 million ounces of gold and 676 million ounces of silver. When production begins, the company anticipates annual gold production of 850,000 ounces and annual silver production of 35 million ounces a year for 25 years.
In addition to the mine, Barrick Gold is investing in renewable energy and community development in surrounding towns in both Argentina and Chile. A newly-built wind farm will provide the mine’s energy, recycled water will supply the mine’s water needs and the company’s blog details job creation and community investment on both sides of the Andes. (Full Story in Spanish)
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