The world’s largest gold miner just got bigger.
Toronto-based Barrick Gold Corp. on Tuesday announced commercial production at its majority-owned Pueblo Viejo mine in the Dominican Republic, adding in one move a new mine and a new country to its roster of global operations in North and South America, Africa and Australia.
The mine came online on time and on budget, and represents a small victory for Barrick at a time when it is wrestling with massive cost overruns and a one-year delay at Pascua-Lama, the gold and silver mine it is building between Chile and Argentina.
“We are pleased to have successfully completed Pueblo Viejo last year, in line with guidance, and now also to have reached commercial production,” said Barrick chief executive officer and president Jamie Sokalsky, who took the helm of the company about six months ago.
Pueblo Viejo, 60-per-cent owned by Barrick and 40-per-cent owned by Goldcorp Inc., Canada’s second-largest gold miner, will be operating at full capacity in the second half of the year, and will produce up to 650,000 ounces of gold this year.
Barrick’s share of annual production in the first five years of full operation is seen at between 625,000 ounces and 675,000 ounces on average.
“Pueblo Viejo is an important asset for Barrick,” TD Securities mining research analyst Greg Barnes noted in a report.
The mine cost $3.7-billion (U.S.) to build and will produce more than one million ounces of gold a year in total, making it one of the few new mines of that size in a time when world-class deposits in mine-friendly jurisdictions are increasingly scarce.
Pascua-Lama, a mine that will straddle the top of the Andes mountain range in South America, is set for first production to mid-2014, a year later than forecast. It will cost between $8-billion and $8.5-billion to build, or about 60 per cent more than budgeted.
Once in production, the mine will provide another big bump to Barrick’s output, with annual production in the first full five years of as much as 850,000 ounces of gold and 35 million ounces of silver.