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Barrick gains PNG reprieve

Barrick Gold (TSX: ABX) has gained a reprieve in Papua New Guinea which will effectively allow it to continue operating its Porgera joint venture while a mining lease extension is considered.
Barrick gains PNG reprieve Barrick gains PNG reprieve Barrick gains PNG reprieve Barrick gains PNG reprieve Barrick gains PNG reprieve

A PNG court has allowed Porgera to continue operating while a lease extension is considered

Staff reporter

Porgera's current lease expires on August 16.

Barrick said on Friday the country's National Court had ruled the provisions of the 1992 Mining Act applied to Porgera, which meant the mine could continue operating while its application for a 20-year extension was being considered. 

The mine is operated by Barrick Niugini, a joint venture between Barrick and Zijin Mining, and Mineral Resources Enga owns 5%.

Barrick said its president and CEO Mark Bristow was in PNG along with Zijin executive director and senior vice president George Fang, to discuss the proposed extension with the government and Porgera special mining lease landowners.

The pair said Porgera had been a "key driver" in PNG's regional, provincial and national economies for the past 30 years and had contributed more than US$1.27 billion in taxes and royalties.

In a separate statement also released on Friday, Bristow said he had met with recently-elected prime minister James Marape and reiterated a call for a partnership approach, a message he had also delivered last month to host governments in Africa. 

He said Marape's view PNG should receive a better share of the benefits generated by the development of its mineral resources was "in line with Barrick's own commitment" to ensuring the value created by its operations should reward all stakeholders, especially its host governments and communities.

He said he was travelling to the mine on the weekend to continue discussions with local stakeholders.

"I am confident that we shall be able to reach a broad agreement on the terms of the lease extension, and that we shall develop the kind of partnership that will ensure that Porgera continues to benefit the country and community for many years to come," Bristow said.

Porgera is expected to produce 240,000-260,000 ounces of gold this year. Production in the March quarter was 66,000oz, down 6% compared with the previous period due to lower grades mined, power supply disruption and planned maintenance; and production was lower again at 61,000oz for the June quarter according to preliminary results.

Barrick's shares are close to a 52-week high, closing on Friday at C$22.33 to capitalise it at $39 billion (US$29 billion).