Te Barrick Gold logo is seen during the company's annual general meeting in Toronto on Tuesday, April 28, 2015.  THE CANADIAN PRESS/Nathan Denette

Barrick reports ‘constructive meetings’ with Papua New Guinea in Porgera mine battle

Barrick reports ‘constructive meetings’ with Papua New Guinea in Porgera mine battle

Toronto-based Barrick Gold Corp. says it has held “constructive meetings” with the Papua New Guinea national government to try to resolve a dispute and reopen the suspended Porgera Gold Mine in the southwestern Pacific island nation.

In a joint statement issued Thursday afternoon, Prime Minister James Marape says he and Barrick CEO Mark Bristow met in the capital of Port Moresby and reached an agreement in principle that the country will take “a major share of equity” in the mine while Barrick Niugini Ltd. will remain the operator.

In an email, however, Barrick spokeswoman Kathy du Pessis quoted Bristow as saying there was progress made on an “amicable set of agreements” but there is still some way to go until a binding deal is reached.

The mine was shut down in April after the PNG government refused to renew the expired special mining lease held by Barrick Niugini, which is owned 47.5 per cent each by Barrick and Zijin Mining Group of China, with the rest held by local landowners and the Enga provincial government.

Barrick Niugini permanently laid off 2,650 local mine workers in July as the dispute dragged on. Meanwhile, global gold prices were rising to all-time record highs.

In September, it said it had lost a court challenge over rights to the gold mine and would appeal to the country’s supreme court. It also noted confirmation from the prime minister that a special mining lease for Porgera had been given to Kumul Mineral Holdings Ltd., the national mining company.

The latest salvo in the ongoing battle came Sunday when Barrick Niugini refuted as “specious” recent charges by Acting Chief Secretary Isaac Lupari, who said his government would sue Barrick for billions of dollars for “years of environmental neglect and sustained human rights abuses.”

In May, Barrick Gold removed Porgera output from its overall 2020 gold production guidance, dropping it by about 200,000 ounces to between 4.6 and 5.0 million ounces.

On Thursday, Barrick reported production of 1.16 million ounces of gold and 103 million pounds of copper in the third quarter, based on preliminary results.

Barrick said it sold 1.25 million ounces of gold and 116 million pounds of copper in the three months ended Sept. 30 at average market prices of US$1,909 per ounce and US$2.96 per pound, respectively.

Barrick says gold production for the first nine months of 2020 totalled 3.6 million ounces and the company remains on track to achieve its full-year production guidance.

National Bank analyst Mike Parkin said gold production numbers were “modestly soft” compared with his and consensus estimates.

Barrick shares closed down 53 cents or 1.4 per cent at $36.68 on Thursday. It plans to release its full results for the third quarter, which ended Sept. 30, on Nov. 5.

This report by The Canadian Press was first published Oct. 15, 2020.

Companies in this story: (TSX:ABX)

The Canadian Press