Canadian mining company Barrick Gold said Thursday it would temporarily suspend construction activities at its Pascua Lama project, which straddles the border of Chile and Argentina, to reduce its capital costs in 2014.

Jamie Sokalsky, president and CEO of Barrick Gold, the world's largest gold producer, made the announcement during the presentation of the company's third-quarter results.

In a statement, Sokalsky said "we have determined that the prudent course - at this stage - is to suspend the project."

"Naturally we will maintain our option to resume construction and finish the project when improvements to its current challenges have been attained," he said.

"As a result of our previous decision to slow down and re-sequence construction, which resulted in significant demobilization over the last few months, we are in a much better position to implement this temporary suspension quickly and efficiently," Sokalsky added.

Barrick Gold has invested roughly $8.6 billion in the project.

Located high in the Andes mountains in an environmentally sensitive region, Pascua Lama has 18 million ounces of proven and probable gold reserves and 676 million ounces of silver contained within the gold reserves.

Barrick Gold has encountered numerous problems with the project, including court rulings in Chile ordering a halt to construction activities because of non-compliance with environmental laws.

The Canadian miner estimated that the decision to suspend the project would result in a $1 billion reduction in capital costs in 2014.

"We regret the company's decision. It's an important project for Chile and Argentina," Chilean Mining Minister Hernan de Solminihac told Radio Bio Bio.

De Solminihac said he was confident the company would complete the work required to comply with Chilean environmental protection requirements and be able to resume construction of the gold and silver mine.

Pascua Lama Vice President Eduardo Flores said the company could use the time to plan ways to execute the project more efficiently and resolve its legal disputes in Chile.

In May, Chile's Environment Superintendency fined Barrick Gold 8 billion pesos (roughly $16.5 million) for non-compliance with conditions established in the project's environmental permit. EFE