Dallas, Texas 05/29/2014 (FINANCIALSTRENDS) – Barrick Gold Corporation (NYSE:ABX) has inked a deal with indigenous groups who had opposed its stalled Pascua Lama project. But the company will still have to l overcome many other obstacles before they can resume the development of this massive gold & silver deposit located in the Andes. This mountain- top project that lie on the border between Chile & Argentina had been put on indefinite hold while the company waits for improvement in the market conditions.
The new deal
Barrick Gold Corporation (NYSE:ABX)’s mismanagement of this Pascua Lama project pushed its costs up to $8.5B as the gold-market turned sour and compelled the company to stall the construction towards the end of 2013 just so that it be able to conserve cash. Though the company is a far cry from restarting the project, it said that it has now reached the initial agreement in 2014 April with the 15 Diaguita communities within Chile. The company said that it will now share technical & the environmental information about this Pascua Lama project with these indigenous groups and provide the funding for any kind of independent analysis.
Time for a change
Andy Lloyd, the Barrick spokesman said that they believe that the agreement will now form the basis of the new relationship with the Diaguita communities, one which is based on transparency and openness & trust. Also, earning that kind of trust will take a lot of time and will also need a lot of commitment and consistent engagement. This initial agreement is a very positive step for Barrick Gold Corporation (NYSE:ABX) & eventually, this might also make it much simpler for the company to build this mine. ABX has recorded almost $6B in write-downs that are related to the Pascua Lama project & it has also been hit by various lawsuits from the investors who have alleged that they had been misled by the company, about the project.