MAC: Mines and Communities

Chile Miner Raises Claim Vs. Barrick Gold Project*

Published by MAC on 2006-06-21
Source: Reuters ()

CHILE/ARGENTINA/PASCUA LAMA

Chile miner raises claim vs. Barrick gold project*

21st June 2006

SANTIAGO, Chile (Reuters) - A Chilean court has upheld a small miner's claims to lands on the giant Pascua Lama gold project, soon to be put into development by No. 1 gold miner Barrick Gold Corp. of Canada.

After extended environmental permitting, Barrick hopes to begin construction on the $1.5 billion gold project straddling the Andes with Argentina in the fourth quarter, but it may have to face off against the new legal claim first.

The Santiago court said on Wednesday it reversed a 1997 contract in which a unit of Barrick Gold bought an 8,600 hectare plot of land at Pascua Lama from miner Rodolfo Villar Garcia for 10,000 pesos, or some $20.

Villar says he was cheated by Barrick, but the Canadian company maintains it has counterclaims to the same lands.

"The decision today is appealable. It involves overlapping claims and we have claims in the same area," Barrick spokesman Vince Borg told Reuters by telephone from Toronto.

"The claims are not where the ore body is and nor will they affect the development of the mine," he added.

A lawyer for Villar disagreed, saying his client had the rights to the lands, and added that Barrick could not go ahead with the project without Villar's claims.

"My client says he was cheated by the miner," said Villar's lawyer, Hernan Montealegre.

"The tribunal has ordered the return of those properties and without them the project cannot be exploited or developed," he told Reuters.

Barrick has 10 days to appeal the ruling.

Pascua Lama has proven and probable reserves of 18.349 million ounces of gold. Barrick has 27 operating mines, in North America, South America, Australia and Africa.

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