Toronto-based gold mining company Barrick Gold Corp (TSE:ABX, Mkt cap 30.93B, Div/yield 0.04/0.60, EPS 0.75, Shares 1.17B) and its joint venture partner Antofagasta have won a dispute over a multibillion-dollar mining project in Pakistan.
Barrick said last week that an arbitration tribunal of the World Bank's International Center for Settlement of Investment Disputes (ICSID) had ruled in favour of Tethyan Copper Co. (TCC), a joint venture between Barrick and London-listed Antofagasta, in relation to the denial of a mining lease for the Reko Diq copper and gold reserve in the Balochistan province in southwestern Pakistan.
The two companies took the Pakistani government to the ICSID tribunal after they were denied a mining lease for the Reko Diq project in 2011.
According to Barrick, the tribunal rejected Pakistan's final defence against liability, and confirmed that the country had violated several provisions of its bilateral investment treaty with Australia, where TCC is incorporated.
Next, the tribunal will consider submissions from the parties before determining the size of the damages to be paid to TCC. A ruling on damages is expected in 2018.
A feasibility study by TCC showed that Reko Diq was one of the world's largest undeveloped copper and gold deposits, with a potential mine life of over 50 years.
It was expected to require an initial capital investment of more than $3bn, but estimates suggest the open pit mine project would yield 200,000 tons of copper and 250,000 ounces of gold a year, contained in 600,000 tons of concentrate, mining news website Mining.com reported.
"We are pleased with this decision and now the damages phase of the arbitration can begin," said Iván Arriagada, CEO of Antofagasta. "We expect that, at the conclusion of this phase, Tethyan will receive an award entitling it to the fair market value of the project at the time that the mining lease application was denied."
Barrick Gold Corp (TSE:ABX) is a Toronto based gold mining company. The Company is engaged in the production and sale of gold and copper, as well as related activities, such as exploration and mine development. The Company operates in segments: eight individual gold mines, Acacia and Pascua-Lama project. The remaining operating segments have been grouped into two other categories: its remaining gold mines and its two copper mines. The Company sells its production in the world market through the distribution channels: gold bullion is sold in the gold spot market; gold and copper concentrate is sold to independent smelting companies, and copper cathode is sold to various manufacturers and traders. The Company has 14 producing gold mines, located in Canada, the United States, Peru, Argentina, Australia, the Dominican Republic and Papua New Guinea. It also holds a 63.9% equity interest in Acacia Mining plc (Acacia) that owns gold mines and exploration properties in Africa.
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