The Porgera Gold Mine can produce between 600 000 to 750 000 thousand ounces of gold per year making it one of Barrick’s most profitable mine.
It is also a low cost producer, producing per ounce of gold at a price lower than most other mining companies do.
Having a life of 30 million ounces, Porgera is special to Barrick Gold Corporation.
Barrick Gold Corporation is the 49 per cent shareholder in the New Porgera Limited and will be the operator of the giant Porgera Mine.
Loop PNG sat down with the President and CEO of Barrick Corporation, Mark Bristow in an exclusive interview following the granting of SML 13 to New Porgera Limited.
Bristow welcomed the issuance of SML 13, a day he said his team has been waiting for.
“We have been preparing as much as we can, so that when we get to this point, we can ramp up quicker.
“There’s a lot spent already under care and maintenance and today we work through what next steps to take. We’re running at about US$4m per week and we will ramp up very quickly up to the end pf the year provided that we progress with all engagements with the community. And so I think we are going to be spending a couple of hundred million dollars between now and December,” Bristow said.
And to quickly cut this cost and also see the benefits trickle down to the people who need it the most, the landowners, he is anticipating for a quick start to the operations.
The first six months will be start-up time and will see low production but this is expected to increase as production ramps up to the right run-rate.
“On average, for the next four years, it’ll be about 600 000 ounces and then over that ten years, the average is about750, 000 ounces. So you can see the profile grows and then it steadies out.”
Bristow says the New Porgera’s profile is similar to the old Porgera and is special to him.
“And Porgera is a very special mine. It’s a low-cost producer and it delivers significantly and delivers value.”
Porgera is a very profitable mine and Barrick classifies it in the tier one category.
“Porgera is genuinely a tie-one mining assets. Lots of people in the mining industry make up what tier-one means.
“We set a tier-one definition – is a mine that produces more than 500,000 ounces a year for more than 10 years in the lower half of the unit cost of the industry. So it needs to be competitively profitable. In other words, Porgera is very much in the lower half. If you take all the mines in the world and the production, we’re in the lower half of the cost per ounce.”
And the valley now looking attractive, Barrick is prepared to settle all outstanding issues including compensation and restart the mine.
Commitments have also been made to pay the landowners a one off commencement payment of 15 million US dollars when the mine starts and another three million US dollars in infrastructure development payments to be paid for the next ten years.