Loading ...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 Toronto-based 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.