Barrick delays Reko Diq project on security concerns

Barrick Mining (TSX: ABX, NYSE: B) said Thursday it will slow development of the Reko Diq project in Pakistan’s Balochistan province and extend the review period, citing security concerns in the Middle East.

The decision, first reported by the Financial Times on Thursday, adds further uncertainty to the buildout of what is considered to be one of the world’s largest undeveloped copper-gold projects.

Barrick shares fell 3.6% to $37.56 Thursday in late afternoon trading in New York. That gave the company a market capitalization of about $65 billion.

The delay follows preliminary findings from a review announced by Barrick last month to examine all aspects of the project, including capital allocation. The review will now be extended for 12 months from July amid a recent escalation in security issues caused by the Iran conflict, Barrick said Thursday.

Barrick, which has been developing the project in partnership with the governments of Pakistan and Balochistan for years, initially planned for the project to come online in 2028, subject to financing. Its first stage alone is projected to cost more than $5.6 billion.

Once operational, the mine is forecast to generate over $70 billion in free cash flow and $90 billion in operating cash flow across a 37-year lifespan.

The extended timeline will allow the miner to further assess potential risks and refine its delivery strategy for the project, the Toronto-based miner said.

Barrick has viewed Reko Diq as a key pillar of its strategy to become a Tier 1 producer of the metal. The deposit holds an estimated 15 million tonnes in copper reserves.