Photo by: Bloomberg
TORONTO (miningweekly.com) – The world’s most prolific gold producer Barrick Gold this weekend announced a new joint venture (JV) with Saudi Arabian Mining Company (Ma'aden) to operate the Jabal Sayid copper mine, located 120 km south-east of Medina, in Saudi Arabia.
The Canadian gold producer on Sunday said Ma’aden would buy a 50% stake in the project for $210-million, a move that was expected to result in first output from the long-delayed mine in late 2015.
The significant copper project has been subject to major delays owing to compliance issues with the country’s safety and security standards.
The company acquired the project as part of its C$7.5-billion acquisition of Equinox in 2011. The Saudi government in 2012 notified Barrick that the $400-million project did not comply with the required safety and security measures, resulting in the company being restricted from using explosives at the mine.
According to Barrick, Equinox originally designed the safety and security system to Western Australian standards, which differ to Saudi Arabia standards, preventing operations to start last year.
"This JV will enable the Jabal Sayid project to move forward with the benefit of Ma'aden's extensive experience in the Saudi Arabian mining sector, combined with Barrick's technical and operating expertise. Once in production, Jabal Sayid will be a high-quality, low-cost underground copper mine capable of generating substantial free cash flow, while providing benefits for local communities through training, employment and economic development,” Barrick president and CEO Jamie Sokalsky said.
Barrick reported an impairment charge of $644-million on the project in the first quarter.
The project was expected to produce 100-million to 130-million pounds of copper in its first five years of production. The mine was expected to operate for up to 15 years on the basis of 1.4-billion pounds of copper in proven and probable reserves as at December 31, 2013.