Recently, all legal and contractual conditions necessary for the reopening of the the Porgera Gold Mine in Papua New Guinea (PNG) have been met and the mine is set to officially restart operations on 22 December 2023. With the ramp up of operations, first gold is expected to be poured in the first quarter of 2024.
Upon the full resumption of operations at the Porgera Gold Mine, Barrick Niugini Ltd (BNL), the 50:50 joint venture company between Zijin Mining and Barrick Gold Corporation in PNG, will continue to lead the operation of the mine, effectively ensuring the order of resumption of operations and production efficiency at the Porgera Gold Mine.
Zijin states that according to the latest plan of BNL, the Porgera Gold Mine has retained gold resources of 417 t which equates to almost 15 Moz. It adds that after resumption of operations and reaching the designated production capacity, the mine is expected to produce an average of over 740,000 oz of gold per annum. BNL holds the 49% equity of the project company (New Porgera Ltd, formerly referred to as the Porgera Joint Venture) of the Porgera Gold Mine and the PNG stakeholders hold 51% equity of the project company – including local landowners and the Enga provincial government.
The remaining life of the mine is over 20 years. Based on the company’s 24.5% indirect interest in the Porgera Gold Mine held through BNL, the gold production attributable to Zijin on an equity basis is expected to be approximately 176,000 oz/y, which will significantly increase Zijin’s overall gold production volume and generate a sustained and stable contribution to its profits. Over the total life of the Porgera Gold Mine, PNG shareholders will receive 53% of Porgera’s overall economic benefits – at an assumed gold price of $1,800 per ounce, this is expected to amount to more than $7 billion over the mine’s projected 20-year life.
BNL will share the remaining 47%. The economic profit-sharing is calculated based on cash flow distribution. The economic sharing received by the PNG shareholders comprises government taxes and fees, dividends from the project company, other cash distribution income, etc.
In 2015, Zijin invested US$298 million (US$100 million for equity and US$198 million for debt) to acquire its 50% interest in BNL. Prior to the suspension of operations of the Porgera Gold Mine in April 2020, Zijin says it had already recovered the investment cost of the project.
Porgera consists of both a producing open pit and an underground gold mine which has had an operating rate of approximately 5.2 Mt/y from the open pit and stockpiles and 0.8 Mt/y from underground. The mine produces gold in doré form from process plants utilising gravity as well as flotation followed by autoclaves and cyanide leaching.
The open pit mine has used a fleet of one O&K RH120 shovel and three O&K RH200 shovels (17 m3 and 26 m3 capacity, respectively) along with two Caterpillar 992 wheel loaders to load 8 Caterpillar 777 and 33 Caterpillar 789 mining trucks (90 t and 175 t class, respectively). Atlas Copco DML blasthole drills drill 10 m benches. Underground bulk stoping has utilised Caterpillar R2900 LHDs with Caterpillar AD45 and AD55 trucks with Epiroc Simba L6C production rigs.
