Barrick Gold chairman Peter Munk speaks at the company's annual general meeting in Toronto on May 2, 2012.CHRIS YOUNG/The Canadian Press
The Supreme Court of Pakistan's decision to block Barrick Gold Corp.'s development of a major copper and gold mine is barely making the miner's investors blink.
While the decision comes with big ramifications for international expropriation rules, Barrick's investors long ago wrote off most, if not all, of the project's value. The stock's off just 1.4 per cent Monday, and the miner's shares more or less fell with the broader market when the mining lease for the Reko Diq copper-gold project was first rejected in November, 2011.
In part, Barrick's investors were protected because the miner held only a 35-per-cent stake in the project, sharing ownership with Chilean copper producer Antofagasta PLC. (The remaining stake was held by a Pakistani government.)
But the root of the indifference is the fact that the project wasn't very far along. Although an initial feasibility study was completed, the owners spent only $220-million on the project since 2006, and when the mining lease was first rejected, Barrick noted that its investment had a carrying value of just $121-million.
So while the owners would have dumped billions of dollars into its development, making the project Pakistan's largest single foreign direct investment, according to Dow Jones, there just wasn't very much sunk into it.
According to the initial feasibility study, Reko Diq measured and indicated estimates come in around 9.5 million ounces of gold and 11.7 billion pounds of copper.
At Barrick, management's eyes remain set on the Pueblo Viejo and Pascua Lama projects, the latter of which recently saw costs soar.
Tim Kiladze