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Barrick $ABX.T Outlines Benefits of the #copper – #gold Pakistan Mine

Barrick Gold Corp. [ABX-TSX, GOLD-NYSE] President and CEO Mark Bristow on Tuesday outlined the potential…

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This article was originally published by Resource World

Barrick Gold $GOLD President and CEO Mark Bristow on Tuesday outlined the potential benefits of the Reko Diq copper-gold project in Pakistan.

Reko Diq is a partnership between the company, the Balochistan provincial government and Pakistan state-owned enterprises.

Barrick believes Reko Diq to be a tier one copper-gold asset that meets its investment criteria (greater than 15% IRR at US$2.75 per pound copper and US$1,300 an ounce gold) and sees the project fitting into its development pipeline, along with the Donlin Gold Project in Alaska.

Benefit details have emerged after Barrick recently announced terms of a framework deal that sets the stage for development of the Reko Diq project. The definitive agreements underlying the framework agreement are being finalized by teams from Barrick and Pakistan.

Once this has been completed and the necessary legalization steps have been taken, Barrick will update the original feasibility study, a process expected to take two years. Construction of the first phase will follow, with the first production of copper and gold expected in 2027 to 2028.

Meanwhile, Barrick is seeking leading project financing partners for the project that allows for project risks while potentially improving returns, the company said.

Bristow said the project would create substantial value for the province through multiple generations. Speaking after a meeting with Balochistan chief minister Abdul Quddus Bizenjo, Bristow said that in the negotiations Barrick and the Government of Pakistan had worked to ensure that Balochistan will receive a substantial share of the benefits generated by Reko Diq.

“Balochistan’s shareholding in Reko Diq will be fully funded by its partners and the federal government, which means that the province will reap the dividends, royalties and other benefits of its 25% ownership without having to contribute financially to the construction and operation of the mine,’’ Bristow said.  “It’s equally important that Balochistan and its people should see these benefits quickly,’’ he said.

“Even before construction starts, once the legalization process has been completed, we will implement a range of social development programs, supported by an upfront commitment to the improvement of healthcare, education, vocational training, food security, and the provision of potable water.’’

Bristow went on to say that social contributions are currently estimated to amount to around $70 million over the construction period, including upfront commitments of up to $3 million in the first year following closing and up to $7 million in year two.

In addition, Bristow said Reko Diq will advance royalties to the Government of Balochistan of up to $5 million in the first year following closing, up to $7.5 million in the second and up  to $10 million per year thereafter until commercial production starts, subject to a cumulative $50 million of advance payments.

Barrick shares advanced on the news, rising 0.44% or $0.09 to $20.64 on volume of 1.7 million. The shares are currently trading in a 52-week range of  $33.50 and $20.06.

 

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