Photo credit: Zijin Mining - Aerial view of the Porgera gold mine
Two important documents as part of the important milestones to be ticked off by the State and its project partners were signed today at the Government House this morning. The Prime Minister delayed his scheduled visit to Oro Province this morning to observe this important signing. These are the Deed of Amendment to the Porgera Project Commencement Agreement (PPCA), and the Deed of Escrow to park 10% of the project equity.
The PPCA was deemed concluded when Mineral Resources Enga signed on 3 February 2022. The PPCA is the central and structural document designed to elaborate and deal more specifically with what was set out in the Framework Agreement. This agreement is the main foundational agreement that establishes how the joint venture will operate and the operating model that delivers the agreed benefits to all parties. It deals with legacy liability issues, taxation issues, license issues, the establishment of the incorporated joint ventures, benefit flows, landowner benefits, project financing, mine closure and reclamation, fiscal and regulatory stability issues, and other issues and legal terms supporting the recommencement of the mine.
“This is a major milestone. We needed to ensure that all the important responsibilities and commitments by all stakeholders are captured in very clear terms under this agreement. Matters that were overlooked are now captured in the amendment deed and will establish very clearly what is required going forward in our quest to reopen the Porgera Mine.”
The Prime Minister paid special commendations to Barrick and its CEO, Mark Bristow, for his patience in allowing the state and its stakeholders to ensure that any matters, which were overlooked in the original PPCA, are captured in the amendment deed.
“I want to thank Mark Bristow for his patience to allow the State and its stakeholders to ensure that every important detail is captured in the amendment deed. This was important to us, and I would like to acknowledge Mr. Bristow’s support in that respect.”
The amended PPCA now paves the way for the parties to move very quickly to implement further series of documents which include, the signing of the shareholders’ agreement and the incorporation of the joint venture company, the operatorship agreement between the joint venture company, and Barrick as the operator, the fiscal stability agreement, a mining development contract, and the memorandum of agreement regarding benefit-sharing between the relevant provincial government and local level government.
“This is why we are excited about this milestone because it allows us firstly to cover all issues, and secondly it triggers a whole series of final documents which will position us well in terms of our goal to reopen the mine.”
Also, today the Deed of Escrow for the New Porgera Limited 10% Shareholding was signed. In accordance with the PPCA, the shares in the new project company will be as follows: Barrick Gold and Zijin, 49%, Kumul Minerals Holdings Limited, 36%, Mineral Resources Enga, 5%, and Porgera Landowners 10%. The parties to the PPCA have agreed that until such time a determination is reached by the landowners as to how the 10% is apportioned, at an appropriate forum, the 10% would be held in escrow.
“This situation was specifically contemplated by the PPCA which sets out the provisions for the establishment of escrow arrangements so that the 10% shareholding may be issued by the project company pending the determination of the ultimate shareholder(s).”
This arrangement is important because we want a proper forum to be held to have the landowners themselves determine how the shares will be held to best represent their interests.
“The development forum, which is the properly constituted process, will be held shortly to provide an opportunity for this matter to be determined by the landowners and their interests. This forum is where everyone who is impacted directly and indirectly by the mine will have their say, and for the government, this is absolutely important.”
The intention of the escrow, therefore, is to allow the project company to be incorporated in the short term to allow the lodgement of its application for a special mining lease to be made. It allows important regulatory tasks to proceed unhindered while plans are put into place for the development forum to take place.
“I am also pleased to announce that the stakeholders have all agreed for the Mineral Resources Development Corporation, (MRDC) to be the escrow agent. MRDC is an experienced company dealing with landowner matters in the oil, gas, and mining space. We are confident that they will be able to perform their tasks diligently in accordance with the Deed of Escrow.”
These important signings now pave the way for the final pieces of the puzzle to be put in place for the mine to be reopened.
“I have been briefed on the critical pathway to the reopening of the mine, and it remains my utmost priority to ensure that matters which are within the control of the government are concluded as soon as possible to allow the process to move and accelerate. The operator has already assembled their team to design the shortest possible pathway and I want to do what I can to assist in this regard.”
Following the signing, the Prime Minister headed straight to the airport and travelled to Popondetta for a very important visit with the Oro Provincial Government.
Article courtesy of Department of PM&NEC
