All amounts expressed in U.S. dollars
Barrick Gold Corporation (NYSE:ABX)(TSX:ABX) (Barrick or the
“Company”) today provided an update on the status of its
Pascua-Lama project, located on the border between Argentina and
Chile.
As previously reported, on January 17, Chile’s
Superintendencia del Medio Ambiente (SMA) ordered the closure of
existing infrastructure on the Chilean side of the Pascua-Lama
project. The sanction is part of a re-evaluation process
ordered by the country’s Environmental Court in 2014 and relates to
historical compliance matters. Barrick is appealing the resolution
on a number of grounds, including on the basis that the sanction is
disproportionate to actual environmental impacts.
The resolution does not affect the Company’s
ongoing evaluation of an underground, block-caving operation at
Pascua-Lama, which would require additional permitting and
regulatory approvals in both Argentina and Chile, irrespective of
the recent SMA decision. In any underground scenario, Barrick would
also close site facilities and surface disturbance in Chile not
necessary for an underground mine.
In light of the SMA order to close surface
facilities in Chile, and current plans to evaluate an underground
mine, Barrick 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.1 As
a result, we expect to record an estimated pre-tax impairment of
$429 million at Pascua-Lama in the fourth quarter of 2017. Further
details will be included in Barrick’s year-end results release on
February 14, 2018.
A shift to an underground operation would
address a number of community concerns by significantly reducing
the overall environmental impacts of the project, as compared to an
open pit operation. In addition, an underground operation would be
less susceptible to weather-related production impacts during the
winter season.
The Company has formed a working group with
Shandong Gold to study a potential partnership at Pascua-Lama,
building on our existing joint venture at the nearby Veladero mine.
We will provide a further update on the Pascua-Lama project at the
Company’s February 22 Investor Day.
INVESTOR CONTACTDaniel
OhSenior Vice PresidentInvestor Engagement and
GovernanceTelephone: +1 416 307-7474Email: doh@barrick.com
MEDIA CONTACTAndy
Lloyd Senior Vice PresidentCommunicationsTelephone: +1 416
307-7414Email: alloyd@barrick.com
ENDNOTE
- Estimated in accordance with National Instrument 43-101 as
required by Canadian securities regulatory authorities. Estimates
are as of December 31, 2017. Pascua-Lama proven reserves of 29.3
million tonnes grading 1.94 g/t, representing 1.8 million ounces of
gold were moved to measured resources, and probable reserves of
248.6 million tonnes grading 1.53 g/t, representing 12.2 million
ounces of gold were moved to indicated resources. Resources have
been estimated based on an assumed gold price of $1,500 per ounce,
and an assumed silver price of $20.50 per ounce. Barrick’s normal
data verification procedures have been employed in connection with
the calculations. Verification procedures include industry-standard
quality control practices. While the terms “measured”, “indicated”
and “inferred” mineral resources are required pursuant to National
Instrument 43-101, the U.S. Securities and Exchange Commission does
not recognize such terms. Canadian standards differ significantly
from the requirements of the U.S. Securities and Exchange
Commission, and mineral resource information contained herein is
not comparable to similar information regarding mineral reserves
disclosed in accordance with the requirements of the U.S.
Securities and Exchange Commission. In addition, U.S. investors are
cautioned not to assume that any part or all of Barrick’s mineral
resources at Pascua-Lama constitute or will be converted into
reserves.
TECHNICAL INFORMATION
The scientific and technical information
contained in this press release has been reviewed and approved by
Rick Sims, Registered Member SME, Vice President, Reserves and
Resources of Barrick; Patrick Garretson, Registered Member SME,
Senior Director, Life of Mine Planning of Barrick; and Steven
Haggarty, P. Eng., Senior Director, Metallurgy of Barrick, each of
whom is a “Qualified Person” as defined in National Instrument
43-101 – Standards of Disclosure for Mineral Projects.
CAUTIONARY STATEMENT REGARDING
IMPAIRMENT CHARGE
Barrick cautions that, whether or not expressly
stated, all figures contained in this press release including the
impairment charge are preliminary and reflect our expectations as
of the date of this press release. The actual reported impairment
charge described in this press release is subject to management’s
final review as well as audit by the Company’s independent
accounting firm and may vary significantly from the Company’s
expectations because of a number of factors, including, without
limitation, additional or revised information and changes in
accounting standards or policies or in how those standards are
applied. Barrick will provide additional discussion and analysis
and other important information about the impairment charge when it
reports actual results on February 14, 2018.
CAUTIONARY STATEMENT ON FORWARD-LOOKING
INFORMATION
Certain information contained in this press
release constitutes “forward-looking statements”. All statements,
other than statements of historical fact, are forward-looking
statements. The words “expect”, “plan”, “will”, “would”,
“intention”, “potential” and similar expressions identify
forward-looking statements. In particular, this press release
contains forward-looking statements including, without limitation,
with respect to the timing and results of the prefeasibility study
at Pascua-Lama.
Forward-looking statements are necessarily based
upon a number of estimates and assumptions that, while considered
reasonable by the Company as at the date of this press release in
light of management’s experience and perception of current
conditions and expected developments, are inherently subject to
significant business, economic and competitive uncertainties and
contingencies. Known and unknown factors could cause actual results
to differ materially from those projected in the forward-looking
statements and undue reliance should not be placed on such
statements and information. Such factors include, but are not
limited to: fluctuations in the spot and forward price of gold,
copper or certain other commodities (such as silver, diesel fuel,
natural gas and electricity); the speculative nature of mineral
exploration and development; changes in mineral production
performance, exploitation and exploration successes; diminishing
quantities or grades of reserves; increased costs, delays,
suspensions and technical challenges associated with the
construction of capital projects; operating or technical
difficulties in connection with mining or development activities,
including geotechnical challenges and disruptions in the
maintenance or provision of required infrastructure and information
technology systems; failure to comply with environmental and health
and safety laws and regulations; timing of receipt of, or failure
to comply with, necessary permits and approvals; uncertainty
whether the Pascua-Lama project will meet the Company’s capital
allocation objectives and internal hurdle rate; changes in national
and local government legislation, taxation, controls or regulations
and/or changes in the administration of laws, policies and
practices, expropriation or nationalization of property and
political or economic developments in Chile, Argentina and other
jurisdictions in which the Company or its affiliates do or may
carry on business in the future; lack of certainty with respect to
foreign legal systems, corruption and other factors that are
inconsistent with the rule of law; the outcome of the appeal of the
decision of Chile’s Superintendencia del Medio Ambiente; damage to
the Company’s reputation due to the actual or perceived occurrence
of any number of events, including negative publicity with respect
to the Company's handling of environmental matters or dealings with
community groups, whether true or not; the possibility that future
exploration results will not be consistent with the Company’s
expectations; risks that exploration data may be incomplete and
considerable additional work may be required to complete further
evaluation, including but not limited to drilling, engineering and
socioeconomic studies and investment; risk of loss due to acts of
war, terrorism, sabotage and civil disturbances; litigation;
contests over title to properties, particularly title to
undeveloped properties, or over access to water, power and other
required infrastructure; business opportunities that may be
presented to, or pursued by, the Company; and risks associated with
the fact that certain of the initiatives described in this press
release are still in the early stages and may not materialize. In
addition, there are risks and hazards associated with the business
of mineral exploration, development and mining, including
environmental hazards, industrial accidents, unusual or unexpected
formations, pressures, cave-ins, flooding and gold bullion, copper
cathode or gold or copper concentrate losses (and the risk of
inadequate insurance, or inability to obtain insurance, to cover
these risks).
Many of these uncertainties and contingencies
can affect our actual results and could cause actual results to
differ materially from those expressed or implied in any
forward-looking statements made by, or on behalf of, us. Readers
are cautioned that forward-looking statements are not guarantees of
future performance. All of the forward-looking statements made in
this press release are qualified by these cautionary statements.
Specific reference is made to the most recent Form 40-F/Annual
Information Form on file with the SEC and Canadian provincial
securities regulatory authorities for a more detailed discussion of
some of the factors underlying forward-looking statements and the
risks that may affect Barrick's ability to achieve the expectations
set forth in the forward-looking statements contained in this press
release.
We disclaim any intention or obligation to
update or revise any forward-looking statements whether as a result
of new information, future events or otherwise, except as required
by applicable law.
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