PNG And Barrick Niugini Limited Agree On New Partnership
The Porgera gold mine is on track to resume operations later this year after the Papua New Guinea (PNG) government and Barrick Niugini Limited (BNL) agreed on a partnership for its future ownership and operation. Porgera has been on care and maintenance since April 2020 when the government declined to renew its special mining lease.
Under the terms of a binding framework agreement ownership of Porgera will be held in a new joint venture owned 51% by PNG stakeholders and 49% by BNL. BNL remains the operator of the mine.
The framework agreement also provides, among other things, for
- PNG stakeholders and BNL to share the economic benefits generated over the life of mine on a 53/47% basis;
- BNL to finance the capital required to restart the mine;
- an increase in the equity allocated to a broad group of landowners who are the customary owners of the land where Porgera is located; and
- the state to retain the right to acquire the remaining 49% of the mine from BNL at fair market value after 10 years.
The parties will now work towards the signing of definitive agreements at which time full mine recommencement work will begin.
Barrick Gold Corporation (NYSE:GOLD) President and Chief Executive, Mark Bristow, said Barrick, on behalf of BNL’s joint venture partners Barrick and Zijin Mining, was delivering on its promise of reaching a fair agreement on the future of Porgera for the benefit of all its stakeholders, notably the local community, Enga province and the PNG government.
“We intend to partner with all key stakeholders to make Porgera a world-class, long-life gold mine,” he said.
PNG Prime Minister James Marape said the framework agreement, reached after months of negotiation, was a historic development, which would benefit PNG for many years to come, and sets the precedent for future projects.
“I thank Mr Bristow and his team for recognising our nation’s aspirations and their willingness to partner with us in realizing this vision at Porgera,” he said.
The Porgera Joint Venture is an open pit and underground gold mine located at an altitude of 2,200-2,600 metres in the Enga Province of Papua New Guinea, about 600 kilometres north-west of Port Moresby. BNL is a joint venture company in which Barrick and Zijin Mining Group each own 50%.
