Chile, Argentina drive for Pascua Lama gold deal

SANTIAGO, Sept 17 (Reuters) - Chile and Argentina hope a meeting in October could resolve the prickly tax issues stalling development of Pascua Lama, the massive gold deposit in the Andes mountain range bordering the two countries.

A resolution could be in sight this year.

Pascua Lama, one of the world's last known mega-gold finds, is located about 5,500 meters (18,000 feet) above sea level and holds a treasure trove of some 17 million ounces of gold. It is also one of the world's largest silver deposits.

The project, owned by Canada's Barrick Gold Corp (ABX.TO), overcame years of environmental challenges after Barrick agreed to leave nearby glaciers untouched. Then it ran into a tax dispute between the host countries.

Argentina's ambassador said he contacted Chilean authorities on Wednesday to set up an October meeting in Santiago.

"It is hoped that this meeting will result in a resolution that will untangle the issue of cross-border services," Argentina's embassy in Santiago said in a statement.

Chile and Argentina have agreed to tax profits on the gold and silver from Pascua Lama depending on what side of the border it comes from, but they are still discussing how to tax what they call transborder services, or services rendered by individual companies on either side of the border.

"In this way, approval could be achieved by the Treaty Administration Commission by the end of the year," the embassy said.

Chile gave the project the green light months ago.

Mine construction in the Andes mountains has a narrow window of opportunity because it needs to occur during the Southern Hemisphere spring and summer, from September through February.

Construction is already years behind schedule.