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Barrick taps two high-profile mining execs to revive troubled Pascua-Lama project

Published: 14:26 17 Apr 2013 EDT

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Barrick Gold Corp. (NYSE:ABX) (TSE:ABX) has reportedly appointed two well-known mining execs to management positions on the Toronto-based gold producer’s beleaguered Pascua-Lama mine project, in a shakeup designed to advance the stalled and notoriously troubled property.

Barrick, the world’s largest gold mining company, named Marcelo Awad, ex- head of Chile’s Antofagasta Minerals, to the postion of deputy director on the mining project that straddles the border between Chile and Argentina. The lion’s share of his role will pertain to advising the company on regulation and government relations.

The position of senior vice-president is to be filled by Eduardo Flores, ex-Goldcorp Inc. (TSE:G), who has already worked with Barrick on the Tethvan Copper Co. joint venture with Antofagasta on the development of a US$3.3 billion copper-gold deposit in Pakistan. In his new role, Flores will represent the company to local and national authorities.

These appointments are consistent with the miner’s stated aim of “taking all the necessary steps to advance in an appropriate fashion on the Chilean side” the open pit gold, silver and copper mining project, stymied by court orders and environmental questions.

Both roles are likely to be crucial to the future of the project Barrick calls its number one global priority. The two appointments come as part of an effort to meet regulatory requirements to restart activities the week after construction of the project was halted by a court-ordered work stoppage.

While the construction on the Argentinean side of the project was not affected, the development boded poorly for the property, already plagued by cost overruns at the high altitude site and resistance from local environmental groups. With roughly 80 per cent of the reserves located on the Chilean side of the border-straddling project, a go-ahead from the Chilean authorities is a pre-requisite to continue with the project.  

Last week’s work stop order – the second in six months – is one of several challenges being faced at the US$8.5 billion project. The most recent dispute could take several months to reach a resolution. An appeal to the Chilean Supreme Court is a likely potential outcome.

Perched in the Andes, the project has prompted an intense level of scrutiny and has even raised the spectre of the potential cancellation of the company’s licence to mine, in the name of protecting both the pristine nearby glaciers and in order to guard against the knock-on effect of possible pollution to the downstream water supply. 

Issues pertaining to dust from the open pit mine and drainage and water questions have industry observers fearing the project could be caught in legal limbo.

Flores has seen the consequences of environmental turmoil up close as the general manager of the Chilean El Morro copper-gold mine, which had its environmental permit struck down last year.

Once in production, the Pascua-Lama mine is expected to rank as one of the world’s largest and lowest cost mines, according to Barrick.

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