The gold mine is expected to to resume operations later this year
The Papua New Guinea (PNG) government and Barrick Niugini (BNL) have agreed to form partnership for the ownership and operation of the Porgera gold mine.
With a binding framework agreement in place, the gold mine is expected to to resume operations later this year.
Since April 2020, Porgera has been on care and maintenance after the PNG government declined to renew its special mining lease.
Under the terms of the agreement, the Porgera ownership will be held in a new joint venture, which will be 51% by PNG stakeholders and 49% by BNL.
BNL, which is a joint venture company in which Barrick and Zijin Mining Group, will be the operator of the gold mine.
Papua New Guinea Prime Minister James Marape said that the signing of the framework agreement after months of negotiation was a historic development.
Marape added that the agreement would benefit PNG for many years to come, and sets the precedent for future projects.
The framework agreement was signed by Governor General Sir Bob Dadae and Barrick Gold president and chief executive Mark Bristow.
Marape said: “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.”
Located at an altitude of 2,200-2,600 metres in the Enga Province of Papua New Guinea, Porgera is an open pit and underground gold mine.
The framework agreement allows PNG stakeholders and BNL to share the economic benefits generated over the life of mine on a 53/47% basis.
PNG retains the right to buy the remaining 49% of the mine from BNL at fair market value after 10 years.
The capital required to restart the Porgera gold mine will be financed by BNL.