Barrick Proposes Billion Dollar Investment in Pueblo Viejo

Barrick Gold (TSX:ABX,NYSE:GOLD) and another top gold producer want to show their commitment to working in the Dominican Republic (DR) by contributing a further US$1 billion to the expansion of the Pueblo Viejo mine.

Barrick CEO Mark Bristow stated on Monday (May 27) that the miner and its joint venture partner in the DR asset, Newmont Goldcorp (TSX:NGT,NYSE:NEM), hope to complete a feasibility study by next year that looks at expanding the operation’s processing plant and tailings capacity, as well as potentially extending the mine’s life to 2030 and beyond.

“We look forward to continue making a significant and growing contribution to our communities and other stakeholders and to unlocking the enormous value of its mineral potential while addressing the historical third-party environmental issues,” Bristow said.

According to Bristow, the joint venture partners have already invested US$5.2 billion into Pueblo Viejo over the past decade, equivalent to about 20 percent of total foreign direct investment in the DR.

In the last six years, the mine has accounted for 30 percent of the country’s exports and represents 2 percent of the DR’s total GDP.

If the US$1 billion plan goes forward, the miners will double their previous contribution to the DR.

“Some 96 percent of the mine’s employees are Dominicans and this has also had a significant impact on the lives of the more than 90,000 people in neighboring communities who have benefited from its community upliftment programs,” said Bristow.

Bristow added that the mine has helped shift and develop the local economy, as the miners have spent more than US$123 million with local contractors and suppliers since 2013.

The project entered the development stage in 2019, and production at Pueblo Viejo began in 2012. Currently, Barrick holds a 60 percent stake in the asset while Newmont holds 40 percent, which Newmont acquired when it merged with Goldcorp.

Barrick projects that the mine will produce between 550,000 and 600,000 ounces of gold in 2019.

As of 2:27 p.m. EDT on Tuesday (May 28), Barrick was at C$15.77 on the TSX. Newmont was at C$42.61.

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Securities Disclosure: I, Nicole Rashotte, hold no direct investment interest in any company mentioned in this article.