Toronto-based Barrick Gold has come to an initial agreement with the local indigenous people of Chile that could remove the blocks against re-starting the suspended Pascua-Lama gold and silver project.
Construction work on the project started in 2006 but was stopped in October 2013, as part of Barrick’s debt reduction programme, as well as resistance from local Diaguita indigenous communities and environmental groups.
Diaguita laywer Lorenzo Soto was quoted by Reuters as saying that the new memorandum of understanding between 15 of the 18 communities and Barrick is an initial step towards bringing the two sides together.
"A new phase in the way that large-scale mining is done in Chile has begun," Soto said.
Barrick commented that: "Although Pascua-Lama is suspended today, our aim is to obtain the permits to re-start construction."
The move by Barrick comes a week after it met with officials of the Chilean mining industry to discuss the re-opening of the Pascua Lama project.
As per the memorandum of understanding, negotiations between the company and communities will last for six months, during which time Barrick will provide project details to the community for discussion with experts.
Barrick also assured that it will not start construction work until the dialogue phase has been completed.
If the dialogue phase is successfully completed and the mine reaches production stage, it is expected to produce around 800,000oz to 850,000oz of gold and 35 million ounces of silver in the first five years of its 25-year life.
Barrick has already spent $5bn on Pascua Lama and the final investment could be more than $8.5bn. The company will spend $300m this year on putting the project in to a dormant state.