Barrick Gold Corp. (ABX, ABX.TO) said Friday that a U.S. Appeals Court directed the U.S. Bureau of Land Management or BLM to conduct additional environmental analysis for Barrick's $500 million Cortez Hills project in Nevada. The Appeals Court also directed the District Court to consider "appropriate injunctive relief." The company said it is currently evaluating the decision and considering its legal options. Following the news, the company's shares lost more than 8% in the intra-day trading, both in the NYSE and TSX.
The Appeals Court affirmed the District Court findings in favor of Barrick, agreeing that the plaintiffs have not established a likelihood of success on the merits.
However, the Court ruled against the government on certain issues associated with the adequacy of its environmental analysis of the project, and directed that the District Court consider appropriate injunctive relief.
The Court directed BLM to conduct additional environmental analysis on transportation and treatment of refractory ore, mine dewatering mitigation plans, and particulate emissions.
Barrick said it would co-operate with the BLM to ensure the analysis is redone in the form required by the Appeals Court decision as soon as possible.
The Cortez Hills project is on schedule to produce first gold in the first quarter of 2010. Once in production, Cortez's average annual production is expected to be about 1 million ounces of gold for the first full five years. The Cortez Hills Mine has recently begun production of ore from the open pit and initiated a ramp up of the underground operation, which has been in production since early 2009.
BLM approved Barrick's plans for the project in November 2008. However, the project has faced heavy opposition from local tribes and environmental groups. Attorneys representing two activist groups and two Western Shoshone tribes took the matter to the District Court, which ruled in favor of the BLM and Barrick.
The District Court had ruled that Barrick could proceed with development of its Cortez Hills project. However, the plaintiffs appealed to Ninth Circuit Court of Appeals.
Barrick said today that the District Court will have to determine the extent to which any action, including any suspension of operations, may be required to respond to the decision of the Court of Appeals.
"It is premature to predict the extent of any potential injunction impact on the timing and completion of construction of Cortez Hills, which is now largely complete," the company said.
ABX is currently trading at US$42.99, down US$3.85 or 8.22% on a volume of 23.73 million shares, while ABX.TO is currently trading at C$45.22, down C$4.20 or 8.50% on a volume of 7.06 million shares.
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