The Porgera gold mine in Papua New Guinea (PNG), halted since 2020, is nearing closer to resuming operations as the country’s government, Barrick Gold’s (TSX: ABX; NYSE: GOLD) local subsidiary and New Porgera have inked a new deal to speed up the mine restart.
Through the New Porgera Progress Agreement, inked late Thursday, all parties have committed to push Porgera’s reopening forward, starting by filing for a special mining lease.
“It’s been a long journey but in the process we have secured the buy-in of all the stakeholders,” Barrick’s chief executive Mark Bristow said. “The reopening of the mine would represent another victory for our host-country partnership model which has been so successful in Tanzania and has now also been adopted for the new Reko Diq copper-gold project in Pakistan,” Bristow noted.
Barrick and its partner China’s Zijin Mining became embroiled in a dispute with the government and locals in 2020 over benefits sharing, while attempting to renew the mine’s licence.
The standoff was resolved in April 2021 through two deals concluded last year, which gave the PNG government a majority stake in Porgera. Barrick and Zijin agreed to halve their stakes.
New Porgera, as the mine is called now, is 51% owned by PNG stakeholders, including local landowners and the Enga provincial government.
Economic benefits will be shared 53% by the PNG stakeholders and 47% by Barrick Niugini Limited, the mine operator.
The vast gold mine is an open pit and underground operation in PNG’s Enga province, about 600 km northwest of Port Moresby.
It hosts an orebody with measured and indicated resources of 10 million ounces and inferred resources of 3.4 million ounces of gold.
It produced about 600,000 ounces of gold in 2019, before being put on care and maintenance.
After initial ramp up and optimization of the Wangima pit, Porgera is forecast to produce an average of 700,000 ounces per year.
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