Barrick Gold Corporation’s (ABX) Cortez Hills mine in Nevadareceived anapproval from the U.S. land regulators for the environmental assessment report removing operational restrictions.

Cortez Hills has been operating under a tailored injunction granted by the U.S. District Court since April 2010, subject to certain restrictions on ore transportation and dewatering pending completion of the SEIS, which was finalized in January. The Record of Decision removes these restrictions and enables the operation to immediately revert to its original scope.

The Cortez Hills project in Nevada recently started production and produced 0.21 million ounces at total cash costs of $329 per ounce. Cortez project production is anticipated to increase to 1.30–1.45 million ounces at total cash costs of $235–$265 per ounce in 2011.

In 2008, Barrick entered into a definitive purchase and sale agreement with Kennecott Explorations (Australia) Ltd., a subsidiary of Rio Tinto plc (“Rio Tinto”), to purchase its 40% interest in the Cortez Joint Venture in Nevada for a total cash consideration of $1.695 billion.

Earlier, Barrick acquired its 60% interest in Cortez through its acquisition of Placer Dome in March 2006. In 2007, the Joint Venture focused on advancing the Cortez Hills project and spent $88 million for open-pit mining equipment, project infrastructure engineering, installation of dewatering wells, and completion of an additional 439 meters of the underground exploration decline.

Barrick intends to be the world’s best gold company by engaged in finding, acquiring, developing and producing quality reserves in a safe, profitable and socially responsible manner. Hence, the company believes that Cortez mine will be an important contributor to economic development and job opportunities in rural Nevada.

Barrick faces stiff competition from AngloGold Ashanti Ltd. (AU), Newmont Mining Corp. (NEM) and Rio Tinto Limited.

We maintain our Neutral recommendation on Barrick. Currently, it carries a Zacks #3 Rank (Hold).

 
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