LATIN AMERICA — Major firms up mining plans for Pierina — Peruvian gold project will help build `tomorrow’s Barrick’

Beginning in late 1999, Barrick Gold (ABX-T) hopes to be producing gold at an annual rate of 500,000 oz. from the Pierina project in the northern Peruvian province of Ancash.

The major acquired Pierina — along with 47 early-stage gold and copper properties in Peru — last September as part of its takeover of Arequipa Resources. Since then, Barrick has drilled more than 225 holes in a program exceeding 35,000 metres. The program added 6.5 million oz. to the reserve base, and the deposit is still open in two directions and at depth.

The major hopes to start building a mine early in 1998. The operation is expected to produce at an average annual rate of 500,000 oz. over a mine life of at least 10 years. Processing would most likely be carried out in a low-cost oxide mill combined with a heap-leach operation at an average rate of 15,000 tonnes per day.

Capital costs are estimated to range from US$200 million to $250 million, while operating costs are projected to fall below US$100 per oz. in the early years. A substantial silver credit is associated with the gold.

Barrick notes that a zone of high-grade gold mineralization has been outlined near the northern end of the deposit. Dubbed “Payback Hill,” this area has gold grades exceeding 8 grams per tonne, with no overburden.

The property lies in the Cordillera Negra, which hosts structurally controlled gold, silver, lead, zinc and copper mineralization in the Calipuy volcanics. A 70-km-long belt of hydrothermal alteration is associated with the known deposits and correlates to the northwest-Trending Rio Santa fault.

The area of the deposit is underlain by basal andesitic lavas and overlying rhyodacitic pumice and lithic tuffs, which also belong to the Tertiary Calipuy group.

About 70% of the deposit either outcrops or is within a few metres of surface. Gold mineralization is characterized by vuggy silica alteration hosted in the rhyodacitic pumice tuff, with lesser amounts in the overlying lithic tuff and underlying andesite. This is flanked by immediate quartz- alunite and argillic alteration. Pierina also has significant amounts of silver mineralization, with the highest grades (to 300 grams per tonne) localized at the northern end of the deposit.

Mostly oxide

Mineralization in the pumice tuff occurs over intervals exceeding 260 metres.

Current reserves and resources are in an area measuring 300 metres wide by 1,000 metres long and which is still open to the east, south and at depth.

More than 95% of the known mineralization is oxide, though a sulphide feeder zone has been intersected in the south-central portion of the deposit.

Pierina is one of two mine projects being worked by Barrick in South America.

An open-pit mine is being developed at the Pascua project, 48 km north of the company’s El Indio mine complex in northern Chile. Pascua will be Barrick’s third mine at El Indio.

Since acquiring El Indio as a result of its 1994 takeover of Lac Minerals, Barrick has increased reserves at Pascua more than five-fold, to 10 million oz. from 1.8 million oz. This figure does not include 6.7 million oz.

classified as resources at Pascua, and Barrick notes that the deposit is still open at depth and to the east.

Pascua is being designed as a 18,000-Tonne-per-day operation, with annual production, beginning in the year 2000, projected at 400,000 oz. Barrick has an 80% interest in the property, with the remainder held by Chilean partners.

The company turned out 3.1 million oz. last year from its worldwide operations (about the same as in 1995), and this year’s production target is more than 3 million oz. The cash cost is expected to be lower than the US$193 per oz. achieved last year.

Barrick is continuing to explore its extensive land holdings at El Indio.

This work has focused on the northeast extensions to known mineralized structures, and ongoing exploration for high-grade extensions at the existing mines.

This year’s “in-mine” exploration program will include more than 20,000 metres of diamond drilling for follow-up work on both extensions and high-grade programs. Ongoing work also will test the potential to find deposits similar to Pascua along the El Indio belt.