Barrick Gold (NYSE:GOLD) has been a frequent guest in the news recently. The company's failed merger with Newmont Mining (NYSE:NEM) was a major newsmaker at the end of April. Now, according to latest media reports, Barrick Gold is seeking to restart its stalled Pascua-Lama project.

Project permitting opportunities increase
There is little surprise that Barrick wants to go ahead with Pascua-Lama, as it has already invested billions of dollars in this project. This year, Barrick decided to focus on building the water management system, allocating $300 million of its capital budget to Pascua-Lama. Its failed merger partner Newmont Mining is experiencing the same problems with its Conga project in Peru. The difference is that Conga has been stalled for a longer time than Pascua-Lama, and shows little signs of a successful resolution to the situation.

Barrick met heavy opposition from the local community on the Chilean side of Pascua-Lama, which led to lawsuits. Chilean courts are yet to announce whether Barrick can continue with building the mine. However, the fact that Barrick officials met with the new Chilean mining minister is a positive sign. Permitting delays are a key obstacle for the troubled project. However, it is not the only one.

Where will funding come from?
Barrick has already spent heavily on Pascua-Lama. Still, the project needs several billions of dollars of investments. Barrick has recently lowered its debt level with the help of equity issuance, but the debt remains high at almost $13 billion. There's little chance that Barrick will choose to increase its indebtedness once again in order to raise money for the project. Current gold prices are pressuring the company's cash flows, so it is unlikely that Barrick will be able to finance Pascua-Lama internally.

Thus, Barrick must search elsewhere. Streaming is an interesting solution in the current environment. However, streaming company Silver Wheaton (NYSE:SLW) has already secured a streaming deal with Barrick and is waiting for the first production from Pascua-Lama. Royal Gold (NASDAQ:RGLD) has also participated in the financing of the project. However, it's still possible that Barrick will be able to attract financing from streaming and royalty companies if it gets the necessary permits.

Another option is to find a partner that will share the burden of financing Pascua-Lama. However, the number of possible partners is limited given the size of the project. In the most likely scenario, Barrick will finance Pascua-Lama with a combination of available methods.

Bottom line
The restart of Pascua-Lama would be positive for Barrick. However, there are still a number of difficulties that are yet to be solved. Even if Barrick receives project permits from the Chilean court, it could face opposition from local community. The example of Newmont Mining's Conga mine shows that one should not underestimate the power of local opposition.

Financing the project is another obstacle. Pascua-Lama's estimated costs have risen year after year, and it will be very interesting to see the company's estimate of remaining capital expenditures at this point in time. Lower gold prices also change project economics. It's difficult to approve massive capital spending at times when further gold price downside looks possible.

One cannot count on Barrick Gold being able to solve its Pascua-Lama problems quickly, but it looks like the company is making steps toward the solution of the project's problems.