VANCOUVER (miningweekly.com) – Canadian miner Barrick Gold has reported significant damage to the power plant that supplies electricity to the Porgera joint venture, following a 7.5 magnitude earthquake that struck Papua New Guinea (PNG) on February 26.
However, the NYSE- and TSX-listed miner said it does not expect the Porgera JV's 2018 guidance of 4.5-million to 5-million ounces of gold to be affected at this stage.
No employees or contractors were injured because of the incident.
Barrick said it is supporting its subsidiary Barrick Niugini (BNL) to protect the safety of those at site, and in the local communities, as recovery efforts get under way.
The Porgera JV is owned 95% by BNL and is the manager of the operation. Barrick and Zijin Mining each own 50% of BNL.
MOODY'S RATINGS BOOST
Meanwhile, Moody's Investors Service has upgraded the senior unsecured ratings of Barrick and all rated subsidiaries to Baa2 from Baa3, with a stable outlook.
Moody's cited Barrick's low adjusted leverage, large scale, diverse and low-cost gold assets, free cash flow generation and favourable geopolitical risk profile, noting, "that Barrick's liquidity is excellent, which provides significant flexibility to manoeuvre through gold price volatility.
"We are pleased that Moody's has recognised our efforts to significantly reduce the company's total debt, while substantially improving liquidity and free cash flow generation," said Barrick president Kelvin Dushnisky stated in a news release.
In the aftermath of the commodity price downturn of the past several years, Barrick has embarked on an aggressive debt reduction campaign, cutting its debt in half, from $13.1-billion at the end of 2014, to $6.4-billion today.
The company's stated goal remains to reduce total debt to about $5-billion by the end of 2018, by using cash flow from operations and cash on hand, and potentially through further portfolio optimisation.
At the end of the fourth quarter, Barrick had a consolidated cash balance of about $2.2-billion. The company has less than $100 million in debt due before 2020. More than three-quarters of Barrick's outstanding total debt of $6.4-billion does not mature until after 2032.