Placer accused of stalling on project

“Clearly, Clive’s upset about it, but that’s the reality. This is a very large project, but it’s very low grade,” Mr. Tomsett said. Placer has suggested the project could be reconfigured to account for hikes in operating costs.

But Bema argues that Placer’s analysis of Cerro Casale is “fundamentally flawed” because it uses both higher operating costs and low metal prices. Bema says the metal price assumptions — a gold price of US$350 per ounce and a copper price of US95¢ a pound — are far too conservative.

Bema claims the terms of a joint venture agreement require Placer to give up its stake in Cerro Casale if a mine is not built.

In a telephone interview from Denver, Mr. Johnson said his company will try to convince Placer to change its opinion. If talks fail, Bema will seek to put the matter in arbitration.

Mr. Johnson added that Placer may wish to consider selling its stake to another party interested in the project. “ That may not be out of the question. Does Placer really want to have me make speeches like I made today, and have the whole process of arbitration and lawyers?”

Last week, Placer announced it would proceed with development of its 60% owned Cortez Hills deposit in Nevada. Placer’s share of the capital cost will be US$245-million.

Construction on Pueblo Viejo would take about three years. Placer needs to receive permits from the government of the Dominican Republic before construction begins. Mr. Tomsett estimated it could take six to 12 months to get those permits in place.