Feb 10 - 16, 1997 Volume 82 Number 50 - 0 comments

Pierina adds ounces for Barrick

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By: Stuart McDougall

Ongoing drilling at two South American projects has increased the gold reserves of Barrick Gold (ABX-T) to more than 50 million oz. The gold giant recently announced that its gold inventory rose to 51 million oz. from 36.5 million oz. reported a year earlier, representing an increase of 40%. In addition, the company reported a gold resource of 25 million oz.
Barrick attributes the increases to development work at the Pascua mine in Chile and advanced-stage exploration drilling at the Pierina project in Peru.
At Pascua, the company proved up an additional 8.1 million oz. last year, bringing total reserves there to 10 million oz. In addition, a resource of 6.7 million oz. was identified.
Further increases are possible, as surface drilling indicates the mineralized zone remains open to the south, east and west. Preliminary drilling from an underground drift indicates the zone is open at depth.
At the Pierina project, which the senior company acquired in September 1996 through the takeover of former owner Arequipa Resources, reserves stand at 6.5 million oz. In an aggressive drill campaign near the end of 1996, the company sunk an additional 201 holes. That program also identified a resource of 760,000 oz., and confirmed that the zone remains open to the east and south.
That resource figure, according to Barrick, is not representative of the project's true potential, since initial drilling concentrated on quantifying reserves rather than property-wide exploration.
The company expects to bring the Pierina mine into production in 1999 at the rate of 500,000 oz. gold per year. Costs are projected to remain below $100 per oz., owing to a substantial silver byproduct. Commercial production at Pascua is expected to begin in 2000 at a rate of 400,000 oz. per year.

Apr 26 - May 2, 1999 Volume 85 Number 9 - 0 comments

LATIN AMERICA -- Pierina to be world's lowest-cost producer

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Peru's mining industry will get a major shot in the arm this spring when Barrick Gold (ABX-T) officially opens its Pierina mine in the department of Ancash, 185 miles north of Lima. The valley-fill, heap-leach operation is expected to produce more than 800,000 oz. this year at a total cash cost of less than US$50 per oz., making it the lowest-cost major gold mine in the world. At the end of 1998, reserves at Pierina stood at 7.2 million contained ounces.
During a meeting with mining analysts earlier this year, John Carrington, Barrick's chief operating officer, praised his team for building Pierina "in record time and below budget."
Barrick acquired the Pierina property in the summer of 1996 by acquiring Arequipa Resources for US$790 million. At that time, the junior company founded by Catherine McLeod-Seltzer and geologist David Lowell had drilled only nine holes into the property.
In just over two years, Barrick brought the exploration project into production at a cost of US$260 million. Production began last fall, and by year-end the open-pit mine had turned out 56,860 oz. gold at a cash operating cost of US$48 per oz.
"We're also investing our time and money into building strong, lasting partnerships with the surrounding communities," Carrington said. "We've built roads and water systems, and improved educational and health care facilities -- all part of this long-term commitment."
By June of this year, Barrick expects to increase its daily mining rate to 64,000 from 44,000 tons. The company is still expanding the mining fleet at Pierina, and once this is completed, in 2001, mining should reach the maximum rate of 83,000 tons per day.
Ore and waste are mined in 30-ft. benches, and the life-of-mine stripping ratio is 1.3-to-1 waste-to-ore. Ore is transported by nine 150-ton, high-altitude haulage trucks, which are tracked by satellite to ensure proper routing of material. A conveyor then transports the crushed ore to the heap-lead pads.
The average grade of ore placed on the leach pad was 0.25 oz. last year, owing to a high-grade starter zone. However, the grade will drop to 0.11 oz. gold this year. Recoveries to date from the Merrill-Crowe process plant have averaged 80% for gold, and 23% for silver, which leaches at a slower rate.
Most of the mineralized zone is stratiform and hosted by a gently dipping unit of felsic tuffs, with some ore occurring within and on the borders of breccia dykes that are associated with a felsic porphyry intrusion underlying part of the deposit. The mineralization is of the high-sulphidation type, with ore mostly associated with a porous vuggy-silica altered rock surrounded by a zone of quartz-alunite-clay alteration.
More than 95% of the known mineralization is oxide, though a sulphide feeder zone has been intersected in the south-central portion of the deposit and will be tested in a deep exploration program this summer. Barrick continues to explore elsewhere at Pierina, as well as on nearby properties acquired as part of the Arequipa transaction.

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