MAC: Mines and Communities

Barrick Gold Fined $9.3 Million for Argentina Cyanide Spill

Published by MAC on 2016-03-20
Source: The Associated Press, Seeking Alpha (2016-03-13)

Yet it is "not even a tickle" on the mine's budget

This is not the first fine for Barrick in Argentina.

In May 2013, Chile’s environmental regulator imposed a fine of over $16 million on the company, the highest ever in country’s history. In doing so he alluded to the “very serious” violations of its environmental permit, as well as a failure by the gold firm to accurately describe what it had done wrong. (See: http://www.mining.com/chile-imposes-16-million-in-fines-to-barrick-for-environmental-violations-at-pascua-lama-64050/)

For previous articles on MAC see: Argentina - Criminal complaint filed against Barrick over cyanide spill
&
Chilean Court halts Pascua Lama mine

Barrick Gold Fined $9.3 Million for Argentina Cyanide Spill

The Associated Press

11 March 2016

Authorities in Argentina fined Barrick Gold Corp. $9.3 million on Friday for a cyanide spill last year at the company's Veladero mine in the western province of San Juan.

The Canadian-owned company said a valve failed in a pipe carrying cyanide at the mine Sept. 13, causing a leak into nearby waters. An investigation determined about 35,300 cubic feet (1,000 cubic meters) of liquid cyanide solution spilled. Barrick said the amount did not pose a risk to humans.

But an Argentine judge investigating the spill suspended operations using cyanide at the mine until the cause could be determined, and local residents expressed fear that their water resources had been contaminated. The suspension was lifted days later.

On Friday, the Ministry of Mining in San Juan, about 745 miles (1,200 kilometers) west of Buenos Aires, announced the fine.

"With this we are protecting the development of mining activities in the province," Gov. Sergio Unac said.

Earlier in the week, Judge Pablo Oritja brought charges against nine current and former Barrick employees without ordering preventative detention.

"We recognize that we have disappointed many of our partners in San Juan province and we deeply regret this incident," Barrick President Kelvin Dushnisky said in a statement posted on the company's website.

The statement repeated the company's position that the spill posed no risk to people's health or the environment.

An assembly of residents of the nearby village of Jachal released a statement saying: "Our life and the water of our people are not worth the 145 million-peso ($9.3 million) fine given to Barrick." I

"Our goal is remediation, closure and a ban on open-pit mega-mining with toxic substances," it added.


Barrick Gold Fined: Not Even A Tickle On Veladero's Budget

http://seekingalpha.com/article/3957998-barrick-gold-fined-even-tickle-veladeros-budget

13 March 2016

Barrick Gold is fined 145.7M pesos ($9.82M) by Argentina's San Juan province for mining code breaches that led to a cyanide spill at the company's Veladero mine in September.

Financial impact of the fine on Veladero mine:

Just noise.

Barrick Gold is fined 145.7M pesos ($9.82M) by Argentina's San Juan province for mining code breaches that led to a cyanide spill at the company's Veladero mine in September.

Earlier this week, a judge accepted charges against nine current and former ABX employees in connection with the spill.

The leak was caused by a defective valve and prompted a court order that forced ABX to temporarily halt pumping the cyanide solution used in the leaching process.

"The safety of our employees, local communities and the environment has always been - and will continue to be - our highest priority," said Barrick President Kelvin Dushnisky. "Following the incident last September, we implemented a comprehensive action plan to strengthen controls and safeguards at the mine, while addressing the root causes of the solution release. These actions include intensified water monitoring, the addition of heating controls and pressure sensing equipment to manage freezing risks, new procedures related to leach pad operations and additional water management controls."

The tests conducted by the United Nations Office for Project Services and the United Nations Environment Programme in October 2015 showed that the spill had not contaminated local water supplies:

Initial results from samples taken from surface water five days after the spill "showed no deviation from measurements taken in June 2015," the report showed.

Felipe Saavedra, the mining minister in San Juan province where Veladero is located, said the results indicated "there was no proof of contamination."

Financial impact of the fine on Veladero mine:

Since the incident occurred in 2015 I compare the cost that the fine involves, on the economic results of the mine of 2015 and the outflow cash with the 2016 estimated inflow cash at Veladero mine.

Veladero produced 602,000 ounces of gold in 2015 at all-in sustaining costs of $946 per ounce. Proven and probable mineral reserves as of December 31, 2015, were 7.5 million ounces of gold.

Barrick reported US$569,492,000 AISC at Veladero mine in 2015.

The fine represents 1.7% of total AISC at Veladero mine in 2015.

Barrick expects to produce approximately 0.66m of ounces at a AISC of $865 at Veladero:

Assuming that Barrick will sell at least all of the gold it will produce in 2016 at $1,250.00 (an estimate) per ounce, the company will generate inflow cash of $825m (=$1,250.00 x an average of 0.66m of gold produced in 2016), the amount of $9.82m will represent approximately 1% of the inflow cash that the company has to cash out at Veladero because of the fine.


September cyanide spill at Argentina gold mine wasn't the first

Frik Els

http://www.mining.com/september-cyanide-spill-at-argentina-gold-mine-wasnt-the-first/

28 March 2016

Barrick Gold Corp was recently fined 145.7m pesos or $9.8m fine over a September cyanide spill at its Veladero mine in San Juan province, but it's been revealed that was not the first such incident at the mine.

Reuters reports that a local newspaper published a report by the environmental ministry not previously made public that outlined three cyanide leaks at the mine between 2011 and 2012. All three spills were contained by the mine's control system and duly reported to authorities according to a Barrick statement:

"The events described in the article were properly contained by our contingency systems in the operating area of the mine," the statement said. "They did not represent a potential risk to the environment."

Veladero, one of the largest gold mines in Argentina, produced 602,000 ounces last year. Proven and probable mineral reserves as of December 31, 2015, were 7.5 million ounces of gold. Gold production in 2016 is expected to be 630,000-690,000 ounces at all-in sustaining costs of $830-$900 per ounce according to the company's website.

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