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Commodities & Metals

Barrick Gold, Silver Wheaton Shares Halted: Chile Blocks Project, Fines Miner $16 Million

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By Paul Ausick Updated Published
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Gold and Silver
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Shares of Barrick Gold Corp. (NYSE: ABX) and Silver Wheaton Corp. (NYSE: SLW) were halted shortly after noon today following a Chilean court ruling that blocks further work at Barrick’s Pascua-Lima mine. The project had been suspended in April to give the court time to consider claims by indigenous communities that environmental damage had fouled water supplies and nearby glaciers and pastures.

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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About the Author Paul Ausick →

Paul Ausick has been writing for a673b.bigscoots-temp.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.

He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.

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