Barrick Gold’s (NYSE: ABX) Pascua Lama gold-silver project that straddles the border of Argentina and Chile would have negative cash costs at today’s silver prices, the Canadian company’s CEO Aaron Regent told reporters.

Pascua Lama is expected to produce an average of 750,000-800,000oz/y of gold and 35Moz/y silver in its first five years of operation. Total cash costs are put at US$20-50/oz gold assuming a silver price of US$12/oz, making it one of the lowest cost gold mines in the world, according to Barrick.

But at today’s silver price of around US$18/oz, “you get all your gold for free,” Regent said.

Pascua Lama, located in the Frontera district at an altitude of 3,800-5,200m and close to Barrick’s Veladero mine, has proven and probable reserves of 17.8Moz gold and 671Moz silver.

The mine is expected to have a life of 25 years, and capex is pegged at US$3bn. As of February, about 90% of the detailed engineering work had been completed and it is scheduled to enter production in the first quarter of 2013.

Asked if the company was surprised by the level of opposition to the mine, which has come under fire from environmentalists, local farmers and others, especially over water issues, Regent said Pascua Lama “highlights the challenges of our industry.”

The mine, in northern Chile’s region III and Argentina’s San Juan province, was originally due to come on line in 2002 at a capex of US$950mn, but was delayed first over low gold prices and then because of tax and permitting issues.

BNamericas will publish an interview with Aaron Regent in Mining Perspectives on April 16, for subscribers only.

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