Papua New Guinean shareholders of New Porgera Mine stand to receive well over K26 billion over the 20-year life of the mine, with more than K11 billion expected in the first 10 years, if gold price keeps at its current rate.
Prime Minister Hon. James Marape announced this after this latest meeting with Barrick Gold Corporation President and Chief Executive Officer Mark Bristow in Port Moresby.
This is the monetary value of the new agreement under Special Mining Lease 13 where Papua New Guineans own 51 percent and 49 percent is shared by Barrick Niugini Limited (BNL) and its joint-venture partner, Zijin.
As the new majority owners of New Porgera Limited, the State through its mining company Kumul Minerals Holdings Limited owns 36 percent of the shares, while 15 percent is being shared between Enga Provincial Government and the landowners.
“Previously, landowners shared a 5 percent equity with the provincial government; now under SML 13, there is nearly a 200 percent increase to 15 percent, including royalties. Comparatively, this is massive,” said Prime Minister Marape.
“At an assumed gold price of US$1,800 per ounce, PNG shareholders can expect to receive nearly US$7.2 billion (about K26.6 billion) over a 20-year mine life and US$3.0 billion (about K11.2 billion) in the first ten years. The current gold price is significantly higher at over US$2,150 per ounce.
“The share of equity and economic benefits that belong to the landowners is a first in PNG’s agreements with international investors.
“I have been confidently advised by Mr Bristow that the mine ramp up remains on track and is expected to reach full production before the end of the third quarter of this year.
“Porgera is forecast to reach production of approximately 250,000 ounces of gold in 2024, more than 400,000 ounces in 2025, and above 600,000 ounces in 2027 and years beyond, returning it to its Tier 1 status as one of the world’s largest gold mines,” said PM Marape.
The Prime Minister also highlighted that New Porgera Limited will be a significant contributor to the PNG Treasury, subject to a 32 percent corporate tax rate in return for fiscal stability under the Resource Contracts Fiscal Stabilization Act, including an increase in royalty from 2 percent to 3 percent.
The mine has rapidly increased the number of employees, with over 2,000 currently, of which 98 percent are Papua New Guineans, with 60 percent coming from Enga and 38 percent from Porgera. NPL expects to employ approximately 3,200 people by the end of this year.
This week, Cabinet approved a special joint military and police callout to secure the mine against a large illegal-miners threat because of PNG’s substantial shareholding interest in the mine.