(Adds comments from lawyer to Reuters, analyst's comment, share price)

By Fabian Cambero

SANTIAGO, May 28 (Reuters) - Canadian miner Barrick Gold

ABX.TO has come to an initial agreement with local indigenous peoples who have opposed its stalled Pascua-Lama mining project on the Chilean-Argentine border, the lawyer for the communities said on Wednesday.

Barrick, the world's largest gold miner, halted the gold and

copper project last year after investing $5 billion in it.

Development of the mine, which the local Diaguita people have strongly opposed, had been frozen by environmental regulators in Chile who demanded that infrastructure to prevent water pollution be built.

The memorandum of understanding that has now been struck between 15 of the 18 communities and Barrick is an initial step towards bringing the two sides together, Lorenzo Soto, the lawyer for the Diaguita, said on Wednesday.

"This is historical, never seen in Chile's mining history," Soto told Reuters in an interview.

The "traditional model" of concession and environmental permits "that could go ahead even if it trod all over the rights of the local communities" has now changed, he said.

"A new phase in the way that large-scale mining is done in Chile has begun," said Soto, who is known for representing indigenous communities in cases against mining projects, including Goldcorp's G.TO El Morro mine, located near Pascua-Lama.

Barrick declined to comment.

The agreement will last six months during which Barrick will provide project details to the community to allow corroboration by experts, a process that will be funded by the Toronto-based mining company, Soto said.

Should that process be successful, Barrick will enter a dialogue phase that could last two years or more, he said. That phase may involve international observers and include the payment of an "indigenous royalty".

Currently, mining companies in Chile pay royalties only to the state. Although no legislation for this kind of indigenous royalty exists "there is nothing to stop it being created," Soto said.

The company will not be able to restart construction until the dialogue phase is complete, he added.

Barrick recently indicated to the Chilean mining ministry that it wants to proceed with Pascua-Lama, the country's mining minister told Reuters last week. ID:nL1N0O21OY

The Diaguita agreement is an "incrementally positive" step, said Josh Wolfson, a gold and precious metals analyst at Dundee Capital Markets in Toronto.

"This is not the catalyst for the company to go and start construction," said Wolfson, adding that Barrick still must negotiate with communities and governments, figure out financing, and determine whether the project is worthwhile at current metals prices.

Barrick shares were down 2 percent at C$16.88 on the Toronto Stock Exchange on Wednesday, in line with the movement of other gold mining shares.

($1=$1.09 Canadian)

(Additional reporting by Nicole Mordant in Vancouver, Writing by Rosalba O'Brien; Editing by Chizu Nomiyama, Paul Simao and Peter Galloway)

((rosalba.obrien@thomsonreuters.com, Twitter: @rosalbaob)(+56 2 23704250)(Reuters Messaging: rosalba.obrien.thomsonreuters.com@reuters.net))

Keywords: BARRICK GOLD PASCUA/