Issue at Pueblo Viejo
On November 23, 2015, Barrick Gold (ABX) announced that two of the three electric motors in the oxygen plant at its Pueblo Viejo mine failed unexpectedly on November 19. The ore at the Pueblo Viejo mine is mainly refractory. It requires pre-treatment for effective gold recovery. Due to the ore’s nature, the oxygen plant is vital for the ongoing operations at the mine. The absence of the oxygen plant would hamper the operations. The company is investigating the cause of the failure. Meanwhile, the facility will operate at a reduced capacity.
According to Barrick Gold, the motors have been shipped to the US for repair. It also expects reduced production at the operation until mid-January 2016.
Stakes in Pueblo Viejo
The Pueblo Viejo mine is an open-pit mining operation located in the central part of the Dominican Republic in the Caribbean. It’s operated by the PVDC (Pueblo Viejo Dominicana Corporation)—a joint venture between Barrick Gold with 60% and Goldcorp (GG) with 40%. Pueblo Viejo is one of Barrick’s core operating mines.
Royal Gold (RGLD) has a gold and silver streaming agreement for the Pueblo Viejo mine. The stream involves production linked to Barrick’s 60% interest in the mine. To learn more, read the gold and silver streaming agreement.
In the next part of this series, we’ll discuss how this development would impact the three companies involved in the mine.