The staged development of the Pakistani project is expected to streamline returns, manage upfront capital, lower execution risk, and drive production and cash flows in the long run
The Reko Diq copper-gold project in Balochistan. (Credit: Barrick Gold Corporation)
Barrick Gold has unveiled plans to develop the Reko Diq project in Balochistan, Pakistan in two phases, starting with a nearly 40 million tonne per annum (mtpa) plant.
The plant’s capacity could be increased by two-folds within five years, said Barrick Gold’s president and chief executive Mark Bristow during an investor call.
Last month, Barrick Gold had reached an agreement on a framework related to the project with the Pakistani and the Balochistani governments.
By carrying out a staged development, the Canada-based gold miner is expected to optimise returns, manage upfront capital, reduce execution risk, and drive production and cash flows in the long run.
The open pit copper-gold porphyry asset is likely to begin production in five to six years’ time, if everything goes as per plan, said the miner’s chief executive.
Barrick Gold will be the operator of the Reko Diq project with a stake of 50%. It will be partnered in the project by Pakistani state-owned enterprises (25%) and the government of Balochistan (25%).
After finalising the underlying agreements, legalisation and closing, Barrick Gold will update the 2010 feasibility study.
Bristow said: “Reko Diq’s fundamentals have not changed materially since then. Subject to the updated feasibility, it is still envisaged as a conventional open pit and milling operation producing a high-quality copper-gold concentrate.”
He further added that Reko Diq will be a multi-generational mine that will have a life of at least 40 years. The mine plan will focus on four porphyry deposits within the land package and on the additional deposits in the exploration licence area, which offer future upside potential.
In 2011, the copper-gold porphyry project was suspended due to a row over the legality of its licensing process. The project has been revived with the Pakistan government agreeing to an out-of-court deal with Barrick Gold and to waive penalties of $11bn, reported Dawn.