Landowner and provincial government-owned consortium Mineral Resources Enga has finally signed the Porgera Project Commencement Agreement, an essential step in the ongoing process to reopen the Porgera gold mine in Enga Province. Further agreements must follow if the mine is to reopen, however.
Porgera. Credit: Zijing Mining
The Porgera Joint Venture has announced that Mineral Resources Enga, the 50/50 consortium between the Enga Provincial Government and Porgera landowners, has signed up to the Porgera Project Commencement Agreement (PPCA).
The Commencement Agreement is the ‘master’ agreement that details the terms under which the mine, which has been closed since April 2020, will reopen under a freshly-issued special mining lease.
While a signing ceremony for the PPCA was held last October, between State nominee Kumul Minerals Holdings Ltd and Barrick Niugini Limited (BNL, itself a joint venture of Canada’s Barrick Gold and China’s Zijin Mining), the signature of Mineral Resources Enga finally brings the agreement into effect, and affirms landowner and local government support for the mine’s reopening.
As well as giving Kumul Minerals Holdings Ltd and Mineral Resources Enga between them 51 per cent ownership of the mine, it is understood the Commencement Agreement also provides for Barrick Niugini to finance the reopening and gives the State the right ‘to acquire the remaining 49 per cent of the mine from BNL at fair market value after 10 years’.
Important progress
Prime Minister James Marape and Barrick’s Mark Bristow. Credit: Porgera Joint Venture
‘The formal execution of the PPCA represents important progress,’ said Barrick Gold’s President and Chief Executive Officer Mark Bristow in a statement.
‘Our senior executives have been in PNG once again to oversee the final execution of the PPCA and the negotiation of key implementation agreements.
‘Our task now, in partnership with the State, is to accelerate the process so that the new company, which will be 51% majority owned by Papua New Guinean shareholders, is incorporated and a sound tenement granted, enabling the mine to reopen at the earliest opportunity and resume delivering economic benefits to the landowners and community of Porgera and to PNG.’
There are still several steps that will need to be completed before the mine can reopen, including a shareholders agreement, constitution, and incorporation of the new Porgera joint venture company and an operatorship agreement.
The mine produced some 600,000 ounces of gold in 2019. Some 2766 direct employees lost their jobs following its 2020 closure, with a significant flow-on impact on surrounding communities and national government revenues.
According to Barrick Gold, the care and maintenance of the mine cost it US$39 million (K136 million) in the nine months to 30 September 2021.
USD 0.2634
AUD 0.4094
GBP 0.2127
EUR 0.247
NZD 0.4457
JPY 40.76
SGD 0.3586
Leave a Reply