Mountainstar Gold Inc (fka MSX)

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Barrick Seeks ‘Precious’ Gains in Sales Spanning Mines to Trucks

It’s not quite a fire sale, but Barrick Gold Corp.’s divestment strategy extends all the way from entire mines to trucks and generators.

With miners globally grappling to offset gold’s slide to five-year lows, Barrick has been selling equipment at its shuttered Pascua Lama project in the Andes Mountains while the site is under the care and maintenance status.

“Relatively speaking, it doesn’t move the needle, but it’s all part of the process of being tidy and disciplined,” Co-President Kelvin Dushnisky said in a telephone interview from Toronto Thursday. “Wherever we can find money -- we’re considering every dollar precious.”

In the past year, Barrick has undertaken sweeping measures to cope with slumping prices that are squeezing margins. On Wednesday, it announced plans to sell stakes in Nevada and Montana mines, lower dividends and a streaming deal with Royal Gold Inc. So far this year, it has sold $2.45 billion in assets, including a 50 percent stake in the Porgera mine in Papua New Guinea to Zijin Mining Group Co. Ltd.

It would be “years” before Pascua Lama can be started, assuming gold prices even make it viable, Dushnisky said.

The giant project straddling the Chile-Argentina border has been shut since 2013, when a court accepted an injunction filed by indigenous groups over environmental concerns.
Partner Option

Options for Pascua Lama, should it get off the ground, could include taking on partners, Dushnisky said. Asked if China’s Zijin would make sense, he replied: “It could.”

“Certainly Zijin’s a company that has great experience in terms of construction, contracting,” Dushnisky said. “So that’s something that could be of interest to them. We certainly wouldn’t rule that out.”

Last week, Barrick said it agreed to sell half its stake in Chilean copper mine Zaldivar to Antofagasta Plc. Asked if Antofagasta could be a potential Pascua Lama partner too, Dushnisky said there have been no discussions between the two companies on that front.

“If it makes sense to bring in more than one partner we would consider that too,” he said. “We won’t be in a position where we need to make that decision for some way down the road.”

For now, Barrick is working “aggressively” to bring down the holding costs of Pascua Lama, and to figure out how to build it in the most cost-effective way. Market conditions will determine whether the mine makes sense even if regulatory hurdles are cleared, Dushnisky said.

In April, Chile’s environmental enforcement agency, known as the SMA, reopened a sanction process against Pascua Lama at the behest of a court. The review may lead to an increase in fines from the $16 million originally handed down. Barrick has written down the value of the project by about $6 billion.

http://www.bloomberg.com/news/articles/2015-08-06/barrick-seeks-precious-gains-in-sales-spanning-mines-to-trucks