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JUNE 2014 • E&MJ; 5 www.e-mj.com NEWS-LEADING DEVELOPMENTS Nick Holland, CEO of Gold Fields, said, "These latest incidents have expe- dited a recently commenced and com- prehensive review of all safety protocols, procedures and standards across the mine, because if we cannot mine safely, we will not mine. We will act decisively to address any weaknesses identified by the review." Holland explained that a new man- agement team, appointed at the begin- ning of this year, had concluded a com- prehensive review of all safety protocols, procedures and standards, in line with the team's mandate to improve the mechanized mining culture at the mine, with specific emphasis on introducing international best practice standards on equipment availability and utiliza- tion, as well as the mechanized mining skills of employees. The safety review indicated that approximately 1,000 m of legacy ground support in some of the ramps serving pro- duction areas in the older part of the mine are below the best practice stan- dards at the company's other mines and present a safety risk. At this stage of the build-up process, approximately 70% of the mine's production comes from these older areas of the mine above 95 level. The remediation will take approxi- mately four months to complete, starting in June. The impact on production for this year is expected to be a dropoff of approximately 1,500 kg (48,225 oz). "However, we cannot at this point in time guarantee that there will not be other issues identified by the new man- agement team, which may further impact [production] guidance for the year," said Holland. He added, "Central to the new man- agement team's efforts to rebase the mine, is the need for the introduction and enforcement of greater levels of accountability and responsibility at all levels in the organization and to improve skills levels across the board. In addition, the team has concluded that the mine has more equipment and people than is required. Both of these are prerequisites for an improved safety culture and improved productivity, which are deemed critical to de-risk the mine's build-up to full production and ensure that South Deep achieves its full potential. Discussions have commenced with the trade unions to agree on the way forward on these issues." Nyrstar Proceeding with Port Pirie Redevelopment Nyrstar announced on May 16 the sign- ing of a binding agreement with the gov- ernment of South Australia and the Australian Export Finance and Insurance Corp. (EFIC) for the final funding and support package for the redevelopment of Nyrstar's Port Pirie, South Australia, smelter into an advanced metals recovery and refining facility. Nyrstar estimates plant throughput at Port Pirie will increase by about 50% upon completion. Increased furnace flexibility will add significant value by allowing the processing of a wider range of high-value and high-margin concentrates and residues from Nyrstar's network of smelters. Concentrates from the company's mines and residues from its zinc smelting net- work are expected to account for approxi- mately 50% of feed material requirements. The redevelopment project includes construction of a new and increased- capacity sulphuric acid plant. During the feasibility process, Nyrstar explored the potential for a third party to build, own, and operate the acid plant; however, the company concluded it would be more ben- eficial for it to retain full operational con- trol and subsequent marketing benefits. When the redevelopment project is complete, Port Pirie will have capacity to produce a range of metals, including about 250,000 metric tons per year (mt/y) of refined lead, 40,000 mt/y of zinc in fume, 7,000 mt/y of copper in matte, and 25 million oz/y of silver doré, containing about 100,000 oz/y of gold. The zinc plant at the site will be shut down. Construction work on the Port Pirie project will begin in early 2015, and the redeveloped facility is scheduled to be fully operational by the end of 2016. Capital cost for the project is estimat- ed at about A$514 million, supported by an innovative, three-part funding pack- age. First, Nyrstar's direct contribution will total about $A103 million. Second, third-party project level financing guar- Three Canadian law firms—Koskie Minsky; Sutts, Strosberg; and Groia & Company— announced on May 21 the filing of a state- ment of claim in a $6 billion action against Barrick Gold and four former or current Barrick senior officers alleging misrepre- sentation regarding Barrick's Pascua-Lama gold-silver project on the Chile-Argentina border. Barrick suspended development on the Chilean side of the project in late April 2013 to address environmental and other issues, and suspended all construction activity at the project in late October 2013. The Pascua-Lama project has nearly 18 million oz of proven and probable gold reserves, with 676 million oz of silver con- tained within the gold reserves, and an expected mine life of 25 years. Production had been planned in the range of 800,000 to 850,000 oz/y of gold in the first five years of production. When construction began at Pascua- Lama in 2009, cost to develop the project was estimated at $2.8 billion to $3 billion, but that cost had risen to at least $8.5 bil- lion by the time construction was suspend- ed in 2013. The law firms' announcement said, "In particular, Barrick publicly referred to this being a feasible and highly economic pro- ject due to the low cost to construct and produce gold and silver from the Pascua- Lama mine. The claim alleges that Barrick knew or ought to have known that the sig- nificant costs to construct and produce gold and silver from this project would ren- der it, at best, a speculative venture. "In addition, the defendants represent- ed compliance with mandatory environmen- tal conditions imposed on the Pascua-Lama mine and made statements that Barrick was safeguarding or protecting the environment and water surrounding the mine. The claim alleges that these representations were inaccurate, misleading, or omitted key facts regarding Barrick's failure to comply with environmental conditions, regulation, and permits, and regarding Barrick's failure to safeguard or protect the environment." The law firms initiated the action on behalf of investors who acquired Barrick securities during the period from May 7, 2009, to November 1, 2013. Barrick officers named in the suit are former CEO Aaron Regent, former CFO and current CEO Jamie Sokalsky, current CFO Ammar Al-Joundi and former COO Peter Kinver. A report by The Canadian Press news agency said Barrick spokesman Andy Lloyd responded by email to a request for com- ment on the lawsuit, saying, "Barrick dis- putes the allegations, and will defend itself against any lawsuit vigorously." Barrick Facing $6B Pascua-Lama Lawsuit EMJ_pg04-45_EMJ_pg04-45 6/4/14 9:00 AM Page 5