Veladero is located in the high Andes Cordillera of central western Argentina, 280 km northwest of the provincial capital of San Juan, six kilometres east of the border with Chile. Veladero is situated at the north end of the El Indio Gold Belt, a corridor of volcanic and intrusive rocks which hosts a number of hydrothermal alteration zones and epithermal deposits. The area was first explored in the late 1980s by government geologists. In 1994, the property was awarded to exploration company AGC, which then entered a 60:40 joint venture agreement with Lac Minerals, which was subsequently acquired by Barrick. In 1999, Homestake Mining acquired AGC. In 2001, the merger between Homestake and Barrick resulted in 100% ownership of the property. Veladero started production in 2005 and at the time of publication of the technical report, Veladero processed 319 Mt of ore to produce 8.2 Moz gold and 16.6 Moz silver. In 2017, Barrick sold a 50% interest in Veladero to Shandong Gold.
Veladero is an open pit mine with ore processed using valley-fill heap leach. The open pit mines and stockpiles have a LOM strip ratio of just 1.1:1. Open pit mining uses conventional shovel and truck and operates at a high level of productivity, between 27 Mtpa and 31 Mtpa, with mine life concluding in 2024. LOM gold recovery is expected to be 60% although historically, 75% was achieved. Silver recovery is low due to the presence of acanthite (silver sulfide), resulting in a forecasted recovery of 10.6% compared to a historical recovery of 11%. As a producing mine, Veladero is under no obligation to disclose project economics. Mining Momentum has used the LOM plan and costs presented in the technical report to estimate a Pre-Tax Cashflow of US$912 M (US$456 M Barrick’s share) and US$508 M (US$254 M Barrick’s share) when discounted 10% using the Reserve gold price of US$1,200/oz and silver price of US$16.50/oz. A complete production plan with stockpile and leaching has not been provided; Mining Momentum has placed processing of stockpiled material and products from leach inventory into an additional year of production. Mining Momentum as also included the amount specified in the technical report, $132 M as a lump sum at the end of mine life.
| Tonnes (Mt) | Grade Au (g/t) | Grade Ag (g/t) | Contained Au (Moz) | Contained Ag (Moz) | AuEq (Moz) | Barrick’s AuEq (Moz) | |
|---|---|---|---|---|---|---|---|
| Reserve | 291.6 | 2.19 | 13.59 | 20.5 | 127.4 | 21.8 | 13.1 |
| OP | 196.1 | 2.19 | 12.87 | 13.8 | 81.1 | 14.7 | 8.8 |
| Stockpile | 95.4 | 2.17 | 15.10 | 6.7 | 46.3 | 7.1 | 4.3 |
| M+I | 196.9 | 1.83 | 11.53 | 11.6 | 73.0 | 12.3 | 7.4 |
| OP | 196.9 | 1.83 | 11.53 | 11.6 | 73.0 | 12.3 | 7.4 |
| Inferred | 7.6 | 1.80 | 10.50 | 0.4 | 2.6 | 0.4 | 0.3 |
Veladero is an incredible deposit, with certain years of production exceeding 1 Moz. But it goes without saying that the glory days are over and for the remainder of mine life, Veladero barely qualifies for Tier 1 status. Veladero’s days are numbered and Barrick knows this, hence the sale of half of its ownership to Shandong to generate upfront cash. Exploration potential here is limited and Barrick has redirected their efforts to other targets along the gold belt. Nonetheless, Veladero remains profitable and actual recovery will likely be higher than budget, providing a nice ounce bonus and ending on a high note.
The information presented above does not constitute investment advice. This is a summary from the NI 43-101 Technical Report effective December 31, 2017 (INSERT), with commentary from the author. Statements above do not represent the views of Barrick Gold. If any discrepancies arise, the information contained within the NI 43-101 are official and final. For latest depletion data, please refer to the AIF update.