COMMENCEMENT AGREEMENT ADVANCES REOPENING OF PORGERA MINE

The Government of Papua New Guinea and Barrick Niugini Limited (BNL) have welcomed the signing of the Porgera Project Commencement Agreement with both parties noting this as a crucial step towards the restart of mining operations at the Porgera Mine.
The agreement was signed in a ceremony on Friday at Government House by His Excellency the Governor General Sir Bob Dadae on behalf of the State, Barrick Gold President and CEO Mark Bristow, and representatives of Kumul Mineral Holdings Limited and Mineral Resource Enga Limited.
At the ceremony, Prime Minister James Marape reaffirmed his government’s commitment to the early restart of Porgera mine with BNL as an equity partner and operator, and promised to ensure that BNL, as the investor, was provided the assurance required to move from care and maintenance to mine recommencement.
“The Commencement Agreement is the master agreement that elaborates in detail the terms agreed in the historic Project Porgera Framework Agreement we signed in April. While other  agreements – such as the Shareholders Agreement, Operatorship Agreement, and the MDC – remain to be finalized, the Commencement Agreement provides a framework for their negotiation and will help accelerate progress on the remaining steps so that Porgera can be reopened,” Mr Marape said.
The Prime Minister encouraged all stakeholders, especially the Porgera landowners and community, to unite and continue to partner with the Government and BNL to create the right conditions for mine restart, including in improving the law and order situation of the Porgera valley.
“We look forward to the setting up of the New Porgera Project Company and for work to begin in preparation for the processing of gold ore at the soonest possible date. Porgera’s restart helps PNG get back more for our people, creating local jobs and contracts in partnership with one of the world’s leading mining companies,” Mr Marape said.
Barrick CEO Dr Mark Bristow, speaking on behalf of BNL shareholders Barrick and Zijin Mining, called upon all parties to the negotiations to redouble their efforts and conclude the remaining agreements as soon as possible.
“As we move toward starting up mining operations, our common task is to negotiate expediently and in good faith so that Porgera, a mine with enormous potential, can resume production and take its place as an engine of the PNG economy and contributor of foreign exchange once again,” Bristow said.
The Porgera Project Commencement Agreement formalizes the terms of the commercial and financial arrangements contained in the Framework Agreement signed in April. These terms include the following:
• PNG stakeholders and BNL will share the economic benefits generated over the life of mine on a 53/47% basis;
• BNL will finance the capital required to restart the mine;
• An increase in equity will be allocated to a broad group of landowners who are the customary owners of the land where Porgera is located; and
• The State will retain the right to acquire the remaining 49% of the mine from BNL at fair market value after 10 years.
Prime Minister Marape and Dr Bristow agreed that their negotiation teams would continue to engage intensively over the coming weeks to ensure that all remaining conditions required for the recommencement of operations at the Porgera Mine can be met as quickly as possible.
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