The world's biggest gold company, Barrick Gold, will likely make a decision on whether to build a mine at the Sedibelo platinum-group metals project, in South Africa, during the second half of this year, CFO Jamie Sokalsky indicated on Tuesday.

The firm had also agreed to buy a further 15% in the project, which would bring its holding to 65% if a decision to mine was taken.

The agreement on the additional stake was reached "a few weeks ago", senior VP for corporate communications Vince Borg told Mining Weekly Online.

The company recently completed a bankable feasibility study, which forecast that the project would cost an estimated $700-million in preproduction capital.

Production would initially be from openpit mining, with output forecast at 240 00 oz/y in the first five years, at cast costs of about $700/oz, followed by a ramp-up of underground operations, which would increase the average annual production to more than 290 000 oz of platinum, palladium, rhodium and gold, at cash costs of around $600/oz.

“The study shows very attractive economics, particularly at these platinum-group metal prices,” Sokalsky said in a presentation in New York, broadcast over the Internet.

The completion of the feasibility study entitled Barrick to a 10% interest in the project, and it may earn another 40% on a decision to mine.

The Bakgatla Ba Kgafela community owns Itereleng Bakgatla Mineral Resource, the firm that owns the mineral rights to the project.

Barrick inherited the earn-in option on Sedibelo when it bought smaller peer Placer Dome in 2006.

The project's owners have applied for a mining right from South Africa's Department of Minerals and Energy, which accepted the application, Barrick said in its 2007 annual report.

UNRECOGNISED VALUE

The company remained focused on gold, but believed there was significant “unrecognised value” in a handful of nongold projects in its portfolio, most of which had been “throw-ins” as part of larger acquisitions, Sokalsky commented.

The firm expects to complete a feasibility study on its Fedorova platinum-group metals project, in Russia, by the end of 2008, and expects partner Xstrata to finalise a prefeasibility study on the Kabanga nickel sulphide prospect, in Tanzania, in the third quarter.

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