After months of refusing to extend its lease, Papua New Guinea Prime Minister James Marape has finally approved the continuation of the operation of the Porgera gold mine between Barrick Gold Corporation and its Chinese joint venture partner Zijin Mining.
According to reports, this news coincides with the release of Barrick’s third-quarter 2020 production results which were in line with expectations. This news, however, didn’t change Barrick shares, easing 0.86% or $0.32 to $36.89 on the volume of 2.25 million. The shares are presently trading in a 52-week range of $41.09 and $17.52.
A gold mine located at an altitude of 2,200-2,600 metres in the Enga Province of Papua New Guinea, the Porgera Joint Venture has reserves at 2.3 million ounces with additional 3.6 million ounces and 1.2 million ounces listed in the measured and indicated, and inferred categories, respectively. Last year, Porgera came up with 284,000 ounces of gold at US1,003 an ounce. But because of this problem, there have been no production forecasts for this year. Both the Chinese firm and Barrick own 47.5% of Porgera mine and the rest is owned by Mineral Resources Enga(jointly owned by the Enga Provincial Government and Porgera Special Mining Lease landowners).
When Marape refused to grant its lease last April, Barrick had promised to challenge the grant of a special mining lease for the Porgera gold mine to a government-owned company. This was in contrast when Marape granted a lease to Kumul Minerals Holdings Ltd., a wholly state-owned enterprise.
Barrick placed the mine in maintenance and care.
Marape said after talks with Barrick Gold CEO Mark Bristow, “We have agreed in principle that Papua New Guinea will take a major share of equity under the new arrangements and BNL will retain operatorship and there will be a fair sharing of the economic benefits.” For his part, Bristow said, “I am certain that my team will be able to work with the PNG state negotiating team…in finalising full commercial details.”
Meanwhile, Marape and Barrick will meet again in the coming week to discuss other matters. Barrick will also meet its 2020 production targets after a third-quarter gold production of 1.15 million ounces at US$969 an ounce. In the third quarter, the firm also came out with 119 million copper.
Barrick also said that in 2020, it will produce 4.6 to 5.0 million ounces of gold at USUS$920-US$970 an ounce. For copper, 440-500 million pounds.
