Barrick accepts reduced ownership stake in deal to restart Papua New Guinea gold mine

CALGARY

Barrick Gold Corp. says its suspended gold mine in Papua New Guinea will resume operations later this year after negotiations to settle a bitter dispute with the national government resulted in the state taking a much larger ownership stake.

The Porgera gold mine was suspended last April when the government refused to renew the special mining lease for operator Barrick Niugini Ltd., a 50-50 joint venture owned by Torontobased Barrick and China’s Zijin Mining Group Ltd.

Under the renegotiated agreement, the 95 per cent stake in the mine held by

BNL drops to 49 per cent and the government’s ownership jumps from five per cent to 51 per cent, although BNL will still be the operator.

However, Barrick says the economic benefits generated over the life of mine are to be split on a 53-47 per cent basis with the larger share going to the government.

It says BNL has to pay all the capital costs of restarting the mine and, in 10 years, the state will have the right to buy its 49 per cent stake at fair market value.

Barrick says the parties will now work toward signing definitive agreements in advance of mine recommencement work.

“We intend to partner with all key stakeholders to make Porgera a world-class, long-life gold mine,” said Barrick chief executive Mark Bristow in a news release.

“I thank Mr. Bristow and his team for recognizing our nation’s aspirations and their willingness to partner with us in realizing this vision at Porgera,” said PNG Prime Minister James Marape in the same release. He added the deal sets a precedent for future projects.