The new Porgera Gold Mine in Enga expects to net more than K26 billion during its 20-year lifespan for the local shareholders who collectively account for 51 percent in the firm.
The shareholders comprise of State through its mining company, Kumul Minerals Holdings Limited (which owns 36 percent of the shares), while 15 percent is being shared between Enga Provincial Government (5 percent) and the landowners (10 percent). The balance (49 percent) is shared between Barrick Niugini Limited (BNL) and its joint-venture partner, Zijin.
Prime Minister, James Marape in a media statement this evening said: “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.
He stated that more than K11 billion of the total projected revenue is expected in the first 10 years, if the current gold price remains unchanged.
PM Marape revealed these monetary benefits after his meeting with Barrick Gold Corporation President and Chief Executive Officer, Mark Bristow in Port Moresby today.
This is the monetary value of the new agreement under Special Mining Lease 13 where Papua New Guineans own 51 percent, he said.
“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.
“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.