Barrick Sees Indian-Led Injunction Against Nevada Mine Lifted Next Month

Barrick Gold Corp., the world’s biggest producer of the metal, said a partial injunction against its Cortez Hills mine in Nevada will be lifted next month.

An environmental study of the project’s expansion that sides with the company and federal regulators is to be approved by a federal agency after a 30-day public review ends on Feb. 13, Andy Lloyd, a Barrick spokesman, said in an e-mailed response to questions Jan. 21. That will effectively lift the court order that limited mining operations since April at the site near Mount Tenabo, a Western Shoshone sacred site, he said.

“The tailored injunction, which affects only offsite ore shipments and dewatering rates, will expire when the Bureau of Land Management issues its record of decision on the supplemental environmental impact study,” Lloyd said. “In our view, no mining project in Nevada has ever been analyzed and studied as thoroughly as Cortez Hills.”

Barrick, based in Toronto, is attempting to increase production at the Nevada property with the Cortez Hills project. The Western Shoshone and two other Indian tribes have objected to the expansion, saying the mine desecrates the mountain and doesn’t protect water under federal law because it pumps out 4,100 gallons a minute to keep the open pit dry for workers and machines.

Roger Flynn, founding director of the Western Mining Action Project, who represents the Shoshone tribes, said in a telephone interview it was too early to determine if the injunction would be referred back to the 9th U.S. Circuit Court of Appeals in San Francisco.

‘Life Blood’

“To many, many Western Shoshone, this area is uniquely special and the mine, particularly pumping out the life blood of the mountain, is incredibly offensive,” Flynn said.

Barrick is backed by federal agencies such as the Bureau, which said the project has incorporated proper steps to mitigate the environmental impact.

The appeals court told U.S. District Judge Larry R. Hicks of Reno, Nevada, in December 2009 to issue the injunction. Hicks ordered the environmental study in August as a way to clear up the water issue.

Flynn said the timing is key for Barrick, which he said will soon reach the injunction’s limit on how much water it can pump as it digs deeper into the mountain.

Cortez “exceeded expectations in 2010” even with the injunction, and created more than 500 jobs for a total workforce of more than 1,000, Lloyd said.

Gold Production

The last 2010 guidance for the whole Cortez project indicated production would be at the higher end of the original range of 1.08 million to 1.12 million ounces, Lloyd said. The company said in October it expected worldwide gold production in 2010 to be 7.65 million to 7.85 million ounces.

Barrick fell 24 cents to C$46.57 on Jan. 21 in Toronto Stock Exchange trading. The shares climbed 28 percent last year.

Barrick is seeking to boost output to benefit from gold prices that have risen for 10 straight years in New York. The price reached a record $1,432.50 an ounce on Dec. 7 on the Comex.

The lawsuit is South Fork Band Council of Western Shoshone of Nevada v. U.S. Department of the Interior, 08-cv-00616, U.S. District Court, District of Nevada (Reno). The appeals court case is South Fork Band Council of Western Shoshone of Nevada v. U.S. Department of the Interior, 09-15230, U.S. Court of Appeals for the Ninth Circuit (San Francisco).

To contact the reporter on this story: Colin McClelland in Toronto at cmcclelland1@bloomberg.net.

To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net.

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