Barrick Gold Corporation
) has announced the start of commercial production at the Pueblo
Viejo gold mine in the Dominican Republic. Construction of the
Pueblo Viejo mine, in which Barrick holds a 60% stake, involved
capital cost of about $3.7 billion.
) owns the remaining 40% stake in the mine.
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During its construction phase, the project created more than
11,000 direct jobs and is expected to generate about 2,000 direct
jobs and nearly 10,000 indirect jobs during its mine life of
about 25 years with Dominicans accounting for nearly 90% of the
Barrick's 60% share of the 2013 output is expected to be in the
range of 500,000-650,000 ounces. For the first full five years of
operation, Barrick's share is expected to be in the range of
On the other hand, Goldcorp expects its share of gold production
from Pueblo Viejo in 2013 to be in the range of 330,000 to
435,000 ounces. In its first full five years of operation,
Goldcorp's share of annual gold production is forecast to be
between 415,000 and 450,000 ounces.
The mine is expected to come into full capacity by the second
half of 2013. Pueblo Viejo is one of the largest gold assets in
the world, and is poised to become a world-class operation.
Barrick, with a number of world class mines under its
jurisdiction, is an unhedged producer of gold and enjoys
significant leverage to gold prices.
We currently have a long-term Underperform recommendation on
Barrick Gold. The company, which competes with
AngloGold Ashanti Ltd.
Newmont Mining Corp.
), maintains a Zacks Rank #3 (Hold).
Goldcorp is one of the world's fastest growing senior gold
producers. We currently have a long-term Neutral recommendation
on the stock. The company carries a short-term Zacks Rank #5 Rank