The Porgera mine in Papua New Guinea is owned a joint venture between Canada's Barrick Gold and China's Zijin Mining.
Photo by: Porgera JV
Gold major Barrick has withdrawn its full-year guidance for the Porgera mine after it placed the operation on care-and-maintenance late last month, amid a dispute with the Papua New Guinea government over the renewal of a 20-year special mining lease.
The decision means that the Toronto-headquartered group has trimmed its guidance for the year, which will now range between 4.6-million and 5-million ounces. The company previously forecast that it will produce between 4.8-million and 5.2-million ounces of gold in 2020.
Papua New Guinea Prime Minister James Marape announced on April 24 that Barrick Niugini’s licence, which would have extended its rights by 20 years, would not be renewed, citing environmental damage and social unrest.
Barrick previously said it would contest the move, which it regards as "tantamount to nationalisation". The mine is jointly owned with China’s Zijin Mining.
Barrick’s ten-year production plan – sustained by six tier-one mines – forecasts output of five-million ounces a year, but the group has cautioned that it is subject to adjustment, based on the outcome of the process with the government of Papua New Guinea.
“As this is a rapidly evolving situation, we will reassess on an ongoing basis and provide further updates in due course, while maintaining operational readiness,” the Mark Bristow-led gold producer said in its first-quarter results announcement on Wednesday.
Bristow stated that Barrick’s March-quarter operational and financial delivery were on plan, despite the fact that its prime focus in the latter part of the quarter had been on ensuring the safety of its people, communities and business in the face of the novel coronavirus pandemic, while coping with the restrictive conditions imposed by governments.
Barrick produced 1.25-million ounces in the quarter under review, compared with 1.43-million ounces in the preceding quarter and 1.37-million ounces in the prior-year quarter. Its all-in sustaining costs (AISC) for gold increased to $954/oz.
Copper production dipped to 115-million pounds, from 106-million pounds a year earlier at an AISC of $2.04/lb.
Barrick reported net earnings of $400-million, which compares with $111-million in the first quarter of 2019, while adjusted net earnings came to $285-million, compared with $184-million in the corresponding quarter.
Free cash flow increased to $438-million, from $146-million in the prior-year period.