Alto Chicama construction start-up slated for 1H04

Toronto-based Barrick Gold (NYSE: ABX) plans to start construction of its US$340mn Alto Chicama gold mine in northwest Peru's La Libertad department in the first half of 2004 once environmental permitting has been approved, company spokesperson Vince Borg told BNamericas. The project's environmental impact study (EIS) review process began last quarter and the legally required public hearings on the EIS were completed in November, said Borg. The mine, one of the most important discoveries of the last decade, is scheduled to start production in late 2005, he said. With current reserves of 7.2Moz gold, Alto Chicama is earmarked to produce an average 540,000oz/y at US$135/oz using open-pit mining methods, a conventional heap leach operation and a Merrill Crowe closed-loop recovery plant. Work to upgrade 70km of access road to the town of Otuzco, which links to Trujillo port, began in the third quarter of this year and is expected to be complete in April 2004 at a cost of US$13mn, according to Barrick's September 2003 update on the project. The construction schedule envisages starting work on the heap leach and plant facilities in the second quarter of 2004, with pre-stripping kicking off in 1Q05. According to the schedule, the first gold pour will occur in 3Q05. Barrick won the Alto Chicama concession from the Peruvian state in an undisputed tender bid in January 2001, when the property was first touted as a coal prospect with "potential gold anomalies," BNamericas reported at the time. Barrick's initial spending commitment was US$1mn on exploration in the first year and 2.51% royalties to the state on net sales should a mine materialize. Alto Chicama's initial discovery of 3.5Moz gold was announced in April 2002. To date, some 130,000m has been drilled on the property.