Barrick Gold 2015

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the

ECONOMIC

review

CANADIAN EDITION

VOL. 1 • AUGUST 2015

BARRICK GOLD AUGUST 15 VOL 1 • ISSUE 2

EVOLUTION

BUSINESSMEDIA

I nspi re d by Ec onom ic Growth

THE FUTURE IS BRIGHT FOR THE DOMINICAN ECONOMY


BAR RICK GOLD

FROM FIELDS TO BEACHES AND NOW GOLD THE FUTURE IS BRIGHT FOR THE DOMINICAN ECONOMY

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By: Djamil Benmehidi - ER Magazine

s the 4million tourists who visit the country each year would undoubtedly agree, the Dominican Republic enjoys a much deserved reputation as a place of eternal summer – an island which is truly heaven on earth. However this Caribbean paradise is fast building a reputation which is entirely different in nature, and is based on economic merit rather than just good weather. Whereas in years gone by the Dominican Republic’s developing economy was once wholly reliant on its two traditional growth drivers, tourism and agriculture, since the 1970s the country has steadily developed a more diversified economic system. Whilst this dependency

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on tourism and agriculture still remains to some extent today, the country’s service and industrial sectors have undergone major growth and development in recent years and the contribution of both to the national economy is now considerable. In particular, international economists have hailed the strong growth of the Dominican Republic’s buoyant mining sector as a major catalyst for its impressive growth. The Dominican Republic’s re-emergence as a major international gold producer hasn’t gone unnoticed and it is now the hottest mining investment location in the Caribbean. Global mining giants such as Barrick Gold and Xtrata have increasingly turned their attention, not to

mention investment budgets towards the country as they search for the next major as-of-yet undiscovered gold deposit - a gold-rush of sorts, in other words, which has led a number of the world’s mining heavyweights to compete to find the next Pueblo Viejo. The Pueblo Viejo Gold Mine, located 100km northwest of the capital city of Santa Domingo, was once the Western Hemisphere’s largest gold mine in the early 1980s – a crown which has now been ceded to South Dakota’s Homestake Gold Mine in the US. This fact in itself is indicative of its world-class credentials. With 25.3million ounces of proven gold reserves, making it the second largest highsulphidation gold deposit in the


BA R R I C K GOLD

Northern Canada, with its rugged beauty and outstanding mineral potential, is Canada’s mining frontier. (Courtesy Aurora Geosciences Ltd.)

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BAR RICK GOLD

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BA R R I C K GOLD

world, Pueblo Viejo holds by far the richest gold deposit ever to be found in the immediate area. These are impressive stats, and the commercial potential of the project for its owners, the Pueblo Viejo Dominicana Corporation (PVDC), a joint venture formed by Pueblo Viejo’s owners, Barrick Gold and Goldcorp, is immense. However for all the site’s worldclass potential, the task of developing Pueblo Viejo has been, to say the least, an arduous and costly one, and capital construction costs of a colossal $4billion were incurred by Barrick before Pueblo Viejo first entered production. The mine and its two major gold-bearing oxide deposits, Monte Negro and Moore, had originally been developed and owned by the state-owned mining company, Rosario Dominicana, which first began mining operations at the site in 1975. Over the course of its operational life, Pueblo Viejo produced more than 5million ounces of gold and 22million ounces of silver up until 1991, when low commodity prices and inadequate ore processing facilities forced production to grind to a halt. By the time the Dominican government first invited for tenders 10 years later to redevelop and resume production at the then abandoned mine, the dilapidated site had fallen into a state of ruinous disrepair. A 33-year contract was originally awarded to the Canadian-based Placer Dome Inc., which was then subsequently acquired by Barrick Gold. A series of complex negotiations then took place on how best to go about the remedial development and construction of the mine – a process which delayed the project until 2009. It was only then that Barrick Gold

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HEAVY HAUL

TRANSPORTATION

EPSA-LABCO was awarded the bid to engineer and manage the construction process of providing roadway clearances and adequate structural support over 125 kilometers and 27 bridges, four (4) autoclaves with 1050+ tons each, and 120+ equipment parts for industrial machinery of oversized dimension and weights

Consulting Engineers. Since 1985

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heavy haul transportation of equipment and industrial parts for a large gold mine project in the Dominican Republic was recently successfully undertaken for Pueblo Viejo Dominicana Corporation, in which Barrick Gold Corporation, the operator, holds 60% and Goldcorp holds the remaining 40%. EPSA-LABCO, Consulting Engineers, a local firm, was awarded the bid to engineer and manage the construction process of providing roadway clearances Untitled-1 1

and adequate structural support over 125 kilometers and 27 bridges, four (4) autoclaves with 1050+ tons each, and 120+ equipment parts for industrial machinery of oversized dimension and weights. Each transport exceeds by as much as 10 times the official country codes for standard vehicles loadings on bridges and roads. After completing the design, the Ministries of the Environment and Public Works issued the corresponding permit licenses. The engineering design was based on the concept of “bridging the bridges”. Steel ramps were placed on metallic provisional supports which were constructed over different types of foundations depending on the soil strata found from detailed geotech-

nical investigations. Design validation was verified by monitoring and controlling stresses and deformations using strain gauges placed at critical locations during the passing of each 1,050-ton autoclave. The measured values were below the values required by the maximum allowable official country codes.

Office Santo Domingo Socorro Sanchez #57 Phone: (809) 221-3772 Fax: (809) 221-9369 E-mail gerencia@epsalabco.com

www.epsalabco.com

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BA R R I C K GOLD

and Goldcorp’s PVDC, as part of a 60/40 joint venture partnership, finally began the multi-billion dollar task of constructing the new Pueblo Viejo Mine. Feasibility studies, environmental and social impact assessments, and associated infrastructure studies were carried out at Barrick Gold’s request to assess the scale of the task which awaited them – suffice to say they made for grim reading. To move Pueblo Viejo forward to where it is today, it soon became clear that before building work on the mine itself could even begin, Barrick Gold and Goldcorp would have to take on an environmental rehabilitation project of an almost unprecedented scale. Following the sudden shutdown of a former mine in the area in 1999, environmental assessments revealed that soil and water on the mine site and the surrounding area had been contaminated with heavy metal concentrations, sediment, and acid rock drainage – a hazardous legacy left behind by the old open mine pits, waste rock piles, and abandoned plant facilities. Upon assembling a team comprised of Barrick Gold employees, hazardous materials experts, and locally hired employees, a large clean-up

operation began which removed approximately 130,000 cubic metres of contaminated soil, alongside the implementation of a Bioremediation project – a process which used microorganisms to restore 100,000 cubic metres of soil that had previously been heavily contaminated with hydrocarbons. As one might expect, this mammoth environmental rehabilitation project didn’t come cheap for Barrick, who offered to cover the full cost and implement an extensive reforestation campaign – a move which earned the mining giant many plaudits, and saved the Dominican government a $75million clean-up bill. The rest, as they say, is history. Shortly after the environmental rehabilitation of Pueblo Viejo, Barrick Gold turned its attention to the next challenge and set about build work on the mine itself, and all necessary accompanying transport and power generation infrastructure. When in August 2012 it was proudly announced that the site had finally begun gold production, safely and on time, the then-CEO of Barrick Gold, Jamie Sokalsky, was understandably delighted. He announced: “Pueblo Viejo is a world-class asset, one of only a handful of

mines that will produce more than 1million ounces of gold a year. We expect it to be a major contributor of low-cost production to Barrick for decades to come.” Only 5 months later in August 2013, commercial gold production began in earnest – nearly 4 years on from the day that work began on the mine site clean-up and mine construction in 2009, and $4billion in capital costs later, Pueblo Viejo was operational. With commercial production successfully achieved and after spending the first year of its life operating at half capacity, today, Pueblo Viejo is now operating at full-steam. High gold prices, which have continued to hover at over $1,000 per ounce, have proved serendipitous for Barrick Gold and Pueblo Viejo’s host country, not to mention its 12,000 direct and indirect employees – already, the Pueblo Viejo mine alone boasts revenues of $1billion annually, almost as much as the Dominican tourism industry earns in its entirety. Indeed the future looks bright for Pueblo Viejo, and both Barrick and the local communities it serves will only continue to benefit from this world-class asset over the course of its 25-year mine-life.

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