Chile’s El Indio important focus for Barrick Gold

Last year’s takeover of Lac Minerals is expected to boost Barrick Gold’s (TSE) gold production to 3.1 million oz. this year, up from 2.3 million oz. in 1994 and 1.6 million oz. in 1993.

This hefty growth rate is expected to be maintained by a program aimed at exploring for new reserves near the company’s existing mining infrastructure. Much of this effort will be focused on the Chilean gold belt known as El Indio, a prolific gold, silver and copper district in the Andes Mountains. Through the Lac acquisition, Barrick became the largest property holder in the belt. Its land package covers 1,230 sq. km and encompasses two producing mines, El Indio and Tambo (scheduled to start production in March). A potential third mine, Nevada, has been identified, along with more recently discovered resources.

Barrick President Robert Smith told a group of Toronto mining analysts that the Indio belt has “great potential” for new discoveries. “The surface has barely been scratched,” he said. “It is a good thing we didn’t know (how prospective) the belt is . . . we might have paid too much.” This year, an extensive exploration effort will continue at El Indio complex, to include about 120,000 metres of drilling at a cost of $30 million. To date, reserves identified within the complex total 8.6 million oz. (267.5 million grams) gold.

At the end of 1994, Barrick reported gold reserves of 44 million oz. (1.4 billion grams), of which 37.6 million oz. (1.2 billion) are classified as proven and probable.

Net income for 1994 was US$250.5 million, compared with US$213.4 million for the previous year. Smith said this performance renders Barrick “the most profitable gold producer in the world in 1994.”