The Canadian Press - ONLINE EDITION

Barrick Gold reaches deal with Chileans who opposed Pascua-Lama mine

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SANTIAGO, Chile - Barrick Gold (TSX:ABX) said Wednesday that it has reached a preliminary deal with a Chilean indigenous group that it hopes will eventually open the way to restarting its Pascua-Lama mine high in the Andes.

The world's biggest gold producer said the memorandum of understanding was worked out with 15 Diaguita communities, which are just downstream from the mine straddling the Argentina-Chile border.

The Diaguitas have complained that Pascua-Lama threatens their water supply and pollutes nearby glaciers. In May 2013, Chile's environmental regulator blocked work at Pascua-Lama, citing "very serious" violations of its work permit. Then in October, Barrick announced it would suspend construction of the $8.5 billion mine.

The Toronto-based company said Wednesday that it seeks to put past clashes behind and "begin a new stage for Pascua Lama" committed to transparency and working closely with the local communities. The six-month deal allows the Diaguita to get firsthand information about the project and review it with experts.

"Although the Chilean side of Pascua-Lama is paralyzed, our goal is to get the permits to restart construction. This time, however, we want to do it hand-in-hand with the communities," said Eduardo Flores Zelaya, the project's senior vice-president. "We know restoring trust is a long process that requires consistency through time."

Members of the Diaguita community hailed the agreement as a victory.

"Environmentally speaking, this marks a milestone, and we hope that it also becomes a precedent so that all big companies learn how to respect the indigenous communities," Diaguita leader Solange Bordones told The Associated Press. "Today, it us who have to take over the reins and control our own land."

If the collaboration is successful, Barrick and the Diaguita will start a dialogue phase over two years, said Lorenzo Soto, a lawyer who represents the communities.

"For the Diaguita this is a triumph because in Chile the mining companies have traditionally stepped on the rights of the indigenous peoples," Soto said.

Authorities in Argentina have insisted that Lama, their side of the binational project, will proceed with or without Chile. But most of Pascua-Lama's estimated 18 million ounces of gold and 676 million ounces of silver are in Chile.

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