According to Reuters, Barrick Gold Corporation (ABX - Free Report) is laying off around 1,500 workers on the Argentine side of its suspended Pascua-Lama gold mine project. Currently, it employs roughly 5,000 workers there.
As such, the Argentine side of Pascua-Lama will be operating with 3,500 workers in 2014. Rescheduling of all the operations in Argentina has been done as the company is prioritizing works on the Chilean side.
The Pascua-Lama mine is located at the Chile-Argentina border. It is one of the world’s largest gold and silver resources with nearly 18 million ounces of proven and probable gold reserves, 676 million ounces of silver contained within the gold reserves, and an estimated mine life of 25 years.
In Oct 2013, Barrick temporarily suspended construction activities at the Pascua-Lama mine, barring the requisite activities for environmental protection and regulatory compliance. Barrick also stopped construction activities temporarily to conserve cash outlays after gold prices slumped. Moreover, the company lowered its capital cost guidance for 2014 and expects it to be up to $1 billion.
Barrick halted work in such a manner so as to allow efficient and effective re-start when conditions permit. The decision to re-start will depend on certain factors like improved project economics, outlook for metal prices, and reduced uncertainty regarding legal and other regulatory requirements.
Earlier this year, Chile's environmental regulator prevented construction on the Chilean side of the project. In addition, the regulator imposed preliminary injunction citing "serious violations" of its environmental permit in April 2013.
The injunction was issued after the four indigenous communities complained that the project is threatening their water supply and polluting glaciers. The project was charged with ‘environmental irregularities’ during the construction of the world’s highest-altitude gold and silver mine.
Currently, Barrick carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the gold mining industry include Golden Star Resources, Ltd. (GSS - Free Report) , Pretium Resources Inc. (PVG - Free Report) and AngloGold Ashanti Ltd. (AU - Free Report) . While Golden Star Resources has a Zacks Rank #1 (Strong Buy), both Pretium Resources and AngloGold Ashanti hold a Zacks Rank #2 (Buy).