Troubled gold giant Barrick Gold Corp. (TSE:ABX) (NYSE:ABX) announced late Thursday the resignations of three of its South American executives as it makes moves to unfreeze its stalled $8.5 billion flagship project, still subject to a work-stoppage order from a Chilean court.
President for Barrick South America, Guillermo Calo – who has held his post only since last July – exited the embattled miner, in company with general director of operations, Robert Mayne-Nicholls, and regional vice-president for corporate affairs, Rodrigo Jimenez.
The company announced the same day a shake-up for its troubled Pascua-Lama project with a view to satisfying Chilean regulatory requirements and thus restarting the project.
Pascua-Lama, a border-straddling project high in the Andes, has been hit with a series of difficulties including cost overruns, project delays and legal wrangles, the most recent of which saw construction on the Chilean side of the giant project halted by order of a local court over environmental concerns on the grounds it destroys pristine glaciers and damages water supply impacting various downstream communities.
The worst-case scenario could see the cancellation of the environmental permit for the Chilean side of the giant gold-silver project, which is also the side of the border-straddling project where the majority of the resource lies.
In a statement issued Thursday, Barrick reiterated its dedication to solving problems with the project, saying "The company is already taking all the possible steps to demonstrate its commitment, which includes updating engineering studies, elaborating performance plans and naming a new management team.”
"Pascua-Lama's main priority is to re-start construction activity with the approval of Chilean authorities."
The suspension of the construction order, which came April 10, was a major blow that sent stock in the gold producer sliding just ahead of the company’s main shareholder meeting for the year.
At the annual shareholders meeting held in Toronto on April 24, the gold giant hinted at the possibility of abandoning the project altogether, with chief executive Jamie Sokalsky saying the company could stop work on the unpopular gold-silver project notwithstanding the $8.5 billion already invested.
“We will not continue to spend capital if we do not have a strong indication of the required time frame to resolve these issues in short order. We are serious about disciplined capital allocation. That means we have to consider all options including the possibility of suspending the project.”
Barrick earlier this month tapped two high-profile mining executives to oversee the project, Marcelo Awad, the former chief executive of London-listed Chilean mining company Antofagasta PLC (LON:ANTO), and Eduardo Flores, ex-general manager of Goldcorp. Inc.'s (TSE:G) (NYSE:GG) El Morro project.
Stock in Barrick was trading down today, hitting an intra-day low of $18.30 per share from an open of $19.23.