Recommissioning Starts as Porgera Prepares to Resume Operations in Q1 2024

Rhea-AI Summary

Barrick Gold Corporation (NYSE:GOLD) (TSX:ABX) has formally completed the Porgera Project Commencement Agreement, starting work on the recommissioning of the Porgera gold mine in Papua New Guinea. The mine has been in care and maintenance since April 2020, and the work is expected to be completed in a few weeks, with mining and processing restarting in the first quarter of 2024. Barrick president and chief executive Mark Bristow led the negotiations for the restart agreement, emphasizing the new ownership structure's alignment with the company’s host country partnership business model. Operated by Barrick through Barrick Niugini Limited (BNL), a joint venture with Zijin Mining, Porgera joins the company’s sector-leading gold asset portfolio with the potential for a Tier One production profile.

Insights

Financial Analyst

The recommissioning of the Porgera gold mine by Barrick Gold Corporation represents a strategic move that could have significant financial implications. As a capital-intensive asset, the mine's return to operation is poised to augment Barrick's production capacity, potentially enhancing revenue streams and influencing the company's stock performance. The mine's projected Tier One status, characterized by substantial reserves, long life and low costs, aligns with industry benchmarks for high-quality assets. Investors should monitor the progress of recommissioning, as it could lead to improved economies of scale and a stronger competitive position within the industry.

Industry Analyst

The integration of the Porgera mine into Barrick's portfolio aligns with the company's host country partnership model, which could foster favorable relations with local stakeholders and governments. This approach may mitigate geopolitical risks and support sustainable operations. The anticipated Tier One status of the mine, indicating a significant reserve potential and low production costs, is noteworthy. It positions Porgera to contribute meaningfully to Barrick's output and profitability, given the strategic importance of cost efficiency and reserve longevity in the gold mining sector.

Economist

The recommencement of operations at the Porgera gold mine could have broader economic implications, particularly for the local economy in Papua New Guinea. The mining sector often serves as a catalyst for regional development, potentially creating employment opportunities and fostering ancillary industries. For the global gold market, increased production from a sizable asset like Porgera may influence supply dynamics, albeit marginally given the vastness of the market. However, the long-term impact on gold prices will likely be nominal, as they are more sensitive to macroeconomic factors and investor sentiment.

All amounts expressed in US dollars

TORONTO, Dec. 22, 2023 (GLOBE NEWSWIRE) -- Barrick Gold Corporation (NYSE:GOLD) (TSX:ABX) – Following the formal completion of the Porgera Project Commencement Agreement today, work has started on the recommissioning of the Porgera gold mine in Papua New Guinea, which has been in care and maintenance since April 2020. This work is expected to be completed over the next few weeks, paving the way for mining and processing to restart in the first quarter of 2024.

Barrick president and chief executive Mark Bristow, who was closely involved in the negotiations that eventually delivered the restart agreement, said the mine’s new ownership structure was in line with the company’s host country partnership business model.

Operated by Barrick through Barrick Niugini Limited (BNL), a joint venture with Zijin Mining, Porgera joins the company’s sector-leading gold asset portfolio with the potential for a Tier One¹ production profile.

Enquiries
Investor and Media Relations
Kathy du Plessis
+44 20 7557 7738
Email: barrick@dpapr.com

Website: www.barrick.com

Endnote:

1. A Tier One Gold Asset is an asset with a $1,300/oz reserve potential to deliver a minimum 10-year life, annual production of at least 500,000 ounces of gold and with all-in sustaining costs per ounce in the lower half of the industry cost curve.
   

Cautionary Statement on Forward-Looking Information

Certain information contained or incorporated by reference in this press release, including any information as to our strategy, projects, plans or future financial or operating performance, constitutes “forward-looking statements”. All statements, other than statements of historical fact, are forward-looking statements. The words “set”, “expect”, “follows”, “potential”, “secure”, “steer”, “will”, “create”, “project”, “look forward” and similar expressions identify forward-looking statements. In particular, this press release contains forward-looking statements including, without limitation, with respect to: the expectation of resumption of operations at the Porgera mine and the restart of processing by the first quarter of 2024; the potential for Porgera to achieve Tier One production status in Barrick’s gold mine portfolio; forecasted production from the Porgera mine and the sharing of projected economic benefits from Porgera with PNG stakeholders under the new equity ownership structure; the success of Barrick’s host-country partnership model in Papua New Guinea; Barrick’s future plans, growth potential, financial strength, investments and overall strategy; and expectations regarding future price assumptions, financial performance, shareholder returns, life of mine and other outlook or guidance.

Forward-looking statements are necessarily based upon a number of estimates and assumptions including material estimates and assumptions related to the factors set forth below that, while considered reasonable by the Company as at the date of this press release in light of management’s experience and perception of current conditions and expected developments, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements and undue reliance should not be placed on such statements and information. Such factors include, but are not limited to: fluctuations in the spot and forward price of gold, copper or certain other commodities (such as silver, diesel fuel, natural gas and electricity); risks associated with projects in the early stages of evaluation and for which additional engineering and other analysis is required; the conditions for the reopening of the mine and the timeline to recommence operations; risks related to the possibility that future exploration results will not be consistent with the Company’s expectations, that quantities or grades of reserves will be diminished, and that resources may not be converted to reserves; changes in mineral production performance, exploitation and exploration successes; risks that exploration data may be incomplete and considerable additional work may be required to complete further evaluation, including but not limited to drilling, engineering and socioeconomic studies and investment; lack of certainty with respect to foreign legal systems, corruption and other factors that are inconsistent with the rule of law in Papua New Guinea; changes in national and local government legislation, taxation, controls or regulations and/or changes in the administration of laws, policies and practices; expropriation or nationalization of property and political or economic developments in Papua New Guinea or other countries in which Barrick does or may carry on business in the future; non-renewal of key licenses by governmental authorities; failure to comply with environmental and health and safety laws and regulations; contests over title to properties, particularly title to undeveloped properties, or over access to water, power and other required infrastructure; the liability associated with risks and hazards in the mining industry, and the ability to maintain insurance to cover such losses; increased costs and physical risks, including extreme weather events and resource shortages, related to climate change; damage to the Company’s reputation due to the actual or perceived occurrence of any number of events, including negative publicity with respect to the Company’s handling of environmental matters or dealings with community groups, whether true or not; litigation and legal and administrative proceedings; operating or technical difficulties in connection with mining or development activities, including geotechnical challenges, tailings dam and storage facilities failures, and disruptions in the maintenance or provision of required infrastructure and information technology systems; increased costs, delays, suspensions and technical challenges associated with the construction of capital projects; risks associated with working with partners in jointly controlled assets; risks related to disruption of supply routes which may cause delays in construction and mining activities, including disruptions in the supply of key mining inputs due to the invasion of Ukraine by Russia; risk of loss due to acts of war, terrorism, sabotage and civil disturbances; risks associated with artisanal and illegal mining; risks associated with Barrick’s infrastructure, information technology systems and the implementation of Barrick’s technological initiatives; the impact of inflation, including global inflationary pressures driven by supply chain disruptions caused by the Covid-19 pandemic and global energy cost increases following the invasion of Ukraine by Russia; the ability of management to implement its business strategy and enhanced political risk in certain jurisdictions; uncertainty whether some or all of Barrick's targeted investments and projects will meet the Company’s capital allocation objectives and internal hurdle rate; employee relations including loss of key employees; availability and increased costs associated with mining inputs and labor; and risks associated with diseases, epidemics and pandemics, including the effects and potential effects of the global Covid-19 pandemic.

Many of these uncertainties and contingencies can affect our actual results and could cause actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, us. Readers are cautioned that forward-looking statements are not guarantees of future performance. All of the forward-looking statements made in this press release are qualified by these cautionary statements. Specific reference is made to the most recent Form 40-F/Annual Information Form on file with the SEC and Canadian provincial securities regulatory authorities for a more detailed discussion of some of the factors underlying forward-looking statements and the risks that may affect Barrick’s ability to achieve the expectations set forth in the forward-looking statements contained in this press release.

We disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law.

FAQ

What is the status of the Porgera gold mine in Papua New Guinea?

The Porgera gold mine has been in care and maintenance since April 2020, but work has started on its recommissioning, with mining and processing expected to restart in the first quarter of 2024.

Who is leading the negotiations for the restart agreement?

Barrick president and chief executive Mark Bristow was closely involved in the negotiations for the restart agreement.

What is the ownership structure of the Porgera gold mine?

The mine is operated by Barrick through Barrick Niugini Limited (BNL), a joint venture with Zijin Mining.

What is the potential production profile of the Porgera gold mine?

The Porgera gold mine has the potential for a Tier One production profile, joining Barrick's sector-leading gold asset portfolio.

What is a Tier One Gold Asset?

A Tier One Gold Asset is an asset with a $1,300/oz reserve potential to deliver a minimum 10-year life, annual production of at least 500,000 ounces of gold, and with all-in sustaining costs per ounce in the lower half of the industry cost curve.