Chile's environmental regulator is re-evaluating penalties on Barrick Gold Corp's Pascua-Lama project, a process that could include cancelling the embattled mine's permit, the head of the government body told a local daily newspaper.

"The new sanction can fall anywhere on the spectrum allowed by the law, which goes from a warning to revoking the environmental permit, including fines," Cristian Franz, head of the SMA, said in an interview published on Wednesday in Diario Financiero.

"I can say that I don't rule out any scenario," Franz added.

Chile's environmental regulator, known as the SMA, fined Barrick $16 million in May 2013 for not complying with some of the country's environmental requirements for its massive gold and silver project.

But then the country's Environment Court found the fines were not properly determined and subsequently the Supreme Court said it would not hear an appeal by the Canadian miner.

That left the door open for the SMA to re-evaluate the fines it previously imposed.

At one time its biggest new development project, Pascua-Lama's development was halted by Barrick in October 2013 after it spent more than $5 billion.

The project, straddling the border between Chile and Argentina, had been plagued by political opposition, permitting issues, labor unrest, cost overruns and a falling gold price.