The unfinished Pascua Lama gold and silver mine high in the Andes on the Chilean-Argentine border continues to bring problems for Toronto-based Barrick Gold Corp. The multinational has announced a loss of $8.56 billion for the second quarter of this year, largely because of a $5.1 billion write-down of the mine’s value. The $8.5 billion project is stalled because of environmental concerns and legal actions in Chile. Suspension of construction at the mine coincided with a record 23% drop in international gold prices from April through June.
The company also faces a class action lawsuit in the US over Pascua Lama. The New York law firm of Labaton Sucharow LLP filed a suit in federal court for the Southern District of New York on Aug. 2 charging that Barrick made false and misleading statements about the project to investors who bought the company’s shares on the New York Stock Exchange from May 7, 2009 to May 23, 2013. Confidential witnesses who say they used to work for Barrick allege that the company knew about environmental issues and was aware that the costs would go far beyond the projections. Barrick denies the claims. (Labaton Sucharow press release, Aug. 2; Yahoo News, Aug. 5; Bloomberg News, Aug. 19)
From Weekly News Update on the Americas, August 18.