In addition to the halt to construction, Barrick has been ordered to pay a fine of $16 million for admitting that it had failed to build systems to contain contaminated water associated with the project. The company said in its press release announcing first quarter results that it is evaluating “all alternatives” for the Pascua-Lima mine, including a shutdown of the project.
Silver Wheaton has a contract with Barrick for delivery of 170 to 200 million ounces of silver from Pascua-Lima’s silver resources, which have been estimated at 676 million ounces. If Barrick cannot meet its contract terms with Silver Wheaton, the mining company may be forced to purchase silver in the futures market in order to meet its contract price of $3.90 an ounce.
This is horrible news for Barrick. Shares were off just 0.5%, at $19.75, before the stock was halted.
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