Mountainstar Gold Inc (fka MSX)

[Newclearday]

At the beginning of November, Barrick Gold's CEO, Jamie Sokalsky, announced yet another jump in the estimated capital costs of the Pascua-Lama mine, from less than $1 billion in 1997, to $3 billion in 2009, to $8 billion in July, to $8.5 billion last month - with "first gold" extracted from the Andean mine closer to the end of 2014 than to the beginning.

But, Sokalsky assured shareholders once again, Pascua-Lama is the company's "top priority."

There are, however, a number of obstacles remaining on the bumpy road to Pascua-Lama, to the delight of some and the dismay of others, from legal wrangling in Chile over the deeds to the vast, frigid territory, to a Supreme Court of Argentina decision over whether any mining can take place there at all, given the presence of glaciers so close to the mine pit.

Capital costs, which may yet rise again when the company releases its year-end results in February might be the least of Barrick's worries.

Lucio Cuenca, the director of the Latin American Observatory of Environmental Conflicts (OLCA), a non-governmental organization, has been following the ups and downs of Pascua-Lama, in the courts and in Barrick's boardroom, for the last decade.

"How can there be such a huge miscalculation of costs by one of the top mining companies in the world?" Cuenca asked from his office in central Santiago. "Either they are lying, or they stand to make so much money they don't really care how much they have to invest."

Rod Jimenez, Barrick's vice-president of corporate affairs in South America, said the cost overruns and delays were due to Barrick's trying to build the mine "in-house" between two countries at high altitude and under incredibly inhospitable conditions.

"We underestimated the complexity of the engineering involved and the enormous amount of work," Jimenez said.

http://www.montrealgazette.com/touch/story.html?id=7703080