FP says Barrick pays price of building Pascua by itself
2012-11-02 09:16 ET - In the News
The Financial Post reports in its Friday edition that while Jamie Sokalsky maintains Barrick Gold is getting its Pascua-Lama debacle under control, investors are not buying it. The Post's Peter Koven writes shares of the world's biggest gold miner dropped 9.5 per cent Thursday as it warned of even more cost escalation at Pascua-Lama, a giant project straddling the border of Argentina and Chile. The latest increase brings the estimated bill for Pascua-Lama up to as much as $8.5-billion, a staggering number for a project that was supposed to cost just $3-billion when it was approved in 2009 (all figures U.S.). Mr. Sokalsky took over from Aaron Regent in June, and quickly stated that fixing the project is his top priority. On Thursday, he said Barrick has completed an "enormous" amount of work toward that goal. Mr. Koven figures Barrick made a huge mistake by trying to build Pascua on its own instead of hiring a contractor, and has begun to correct that by transferring management duties to engineering outfit Fluor Corp. Barrick also hired nearly 2,000 skilled workers in the third quarter and shook up its own management at the site. Meanwhile, Barrick's projected returns on Pascua have become weaker.
I wonder if those 2000 skilled workers are still on the books of abx or have they lost their jobs or will they soon be hired by Brent and MSX?
Thoughts
AI
