Miner Barrick Gold Corporation (TSX: ABX) (NYSE: GOLD) confirmed on Monday that Papua New Guinea (PNG) Prime Minister James Marape has announced an imminent agreement to reopen the Porgera mine which accounted for about 5% of Barrick’s production in 2019.
Porgera JV
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.
Barrick and Zijin Mining Group each own 47.5% of the operation, with the remaining 5% interest held by Mineral Resources Enga. Barrick Niugini Limited (BNL) is the majority owner and operator of the Porgera gold mine.
Dispute with PNG government
Last year, Barrick and its Chinese partner, Zijin Mining, had lost a key court challenge over rights to the Porgera mine.
The JV partners were embroiled in a dispute with the PNG government after Marape refused to renew the companies’ expired mining lease in April last year, citing environmental and social problems. Consequently, the Porgera mine’s operations were temporarily halted.
The government had then given the permit to a state-owned mining company, Kumul Minerals Holdings Ltd.
New terms and increased PNG ownership
In October, Marape had relented PNG’s stance following talks with Barrick CEO Mark Bristow and new terms were announced after discussions and negotiations. Marape had announced that that the venture Barrick Niugini Ltd (BNL), would continue to be the operator of the Porgera mine.
Marape had stated that the joint venture between BNL and PNG could operate the mine “on the basis of increased PNG ownership and a fair sharing of economic benefits.”
PNG government said that a further statement will be issued once a final agreement is achieved.
Porgera had produced nearly 600,000 ounces of gold in 2019 before being put on care and maintenance.