Barrick Gold nears agreement to reopen Papua New Guinea mine

FILE PHOTO: Souvenir luggage tags are displayed at a Barrick Gold Corp at the Prospectors and Developers Association of Canada (PDAC) annual conference in Toronto, Ontario, Canada March 1, 2020. REUTERS/Chris Helgren

(Reuters) -Miner Barrick Gold said on Monday Papua New Guinea (PNG) Prime Minister James Marape announced an imminent agreement to reopen the disputed Porgera gold mine a year after it was shut.

The world’s second-largest gold producer lost a key court challenge last year over rights to the mine which accounted for about 5% of Barrick’s production in 2019.

In April last year, Marape refused to extend the expired mining lease held by a venture of Barrick and its partner, China’s Zijin Mining, citing environmental and social problems.

In October, however, Marape said that the venture, Barrick Niugini Ltd (BNL), was set to remain operator of the Porgera gold mine following talks with Barrick CEO Mark Bristow.

Barrick said on Monday that the agreement under discussion was in line with the terms announced in October, for a joint venture between BNL and PNG to operate the mine “on the basis of increased PNG ownership and a fair sharing of economic benefits.”

The Porgera joint venture is an open pit and underground gold mine in the Enga province of Papua New Guinea, about 600 kilometers north-west of Port Moresby.

Porgera produced nearly 600,000 ounces of gold in 2019 before being put on care and maintenance.

Shares in the Canadian miner climbed nearly 2% following the announcement, after falling about 12% this year.

Reporting by Arundhati Sarkar in Bengaluru; Editing by Devika Syamnath