Barrick Gold removes suspended gold mine output from guidance
TORONTO — Barrick Gold Corp. has withdrawn production guidance for its Porgera gold mine in Papua New Guinea after suspending operations amid a dispute with the national government over an extension of its expired mining permit.
The company now expects its 2020 overall gold production to be between 4.6 and 5.0 million ounces, about 200,000 ounces lower than its previous estimate that included production from Porgera.
“The situation in Porgera is rapidly evolving, so we will provide further updates on our outlook in due course,” said Barrick CEO Mark Bristow on a conference call Wednesday to discuss first-quarter results.
The mine was shut down in April after the government said it wanted to negotiate an exit strategy for Barrick Niugini Ltd., the joint venture mine owner and operator that is owned 47.5 per cent each by Barrick and partner Zijin Mining Group of China.
Barrick, which maintains the move amounts to an improper nationalization of the mine, filed a lawsuit in the National Court of Papua New Guinea seeking to quash the government decision to not extend the permit, which expired last summer.
The judge ordered the parties last week to negotiate and report back by the end of this week.
Bristow said he’s limited in what he can say on the subject because of the order.
The judge indicated he would appoint a court-appointed arbitrator to ensure the parties come to a solution if they’re unable to do so on their own, Bristow said.
Barrick said the situation has little effect on capital spending because the company was waiting for the permit before making any plans.
It also reported that it intends to contest a Papua New Guinea demand that it pay $191 million US arising from a tax audit of Barrick Niugini for 2006 through 2015.
The Toronto-based miner reported earnings of $400 million US in its first quarter, up from $111 million US in the same quarter a year earlier.
On an adjusted basis, Barrick earned $285 million US or 16 cents per share in the three-month period, up from $184 million US or 11 cents per share a year earlier.
The result matched the average expectations of analysts, according to financial markets data firm Refinitiv.
Barrick produced 1.25 million ounces of gold in the quarter compared with nearly 1.37 million a year ago, while copper production increased to 115 million pounds, up from 106 million in the first quarter last year.
Its realized gold price for the quarter was $1,589 US per ounce, up from $1,307 US in the same quarter last year.