Porgera gold reserves sufficient

By PETER ESILA
THERE are sufficient gold reserves to support the next 10 years’ operations at the Porgera gold mine.
Enga that is currently 51 per cent owned by PNG, according to the Kumul Minerals Holdings Ltd(KMHL).
KMHL chairman Dr Ila Temu said Barrick Niugini Ltd (BNL) had met all the PNG shareholders’ share of the care and maintenance cost, and the startup costs.
KMHL is the national mining company, mandated as the exclusive nominee to hold and manage investments in mining assets.
“There has been no exploration done during the period of care and maintenance,” he said.
“In any case, all exploration results are currently the property of BNL. The next 10 years’ resources will have to be proven up during the first 10 years of operations.
“Barrick have developed and presented a model that shows that the mine will be profitable. The agreed benefit split has been based on this model,” Temu said. He clarified that KMHL’s 36 per cent share in Porgera for the next 10 years would go towards repaying BNL’s cost of care and maintenance.
The BNL told The National last year that it had spent more than K1 billion on care and maintenance of the mine.
“It is important to understand that Barrick has funded all of PNG shareholders share of the care and maintenance cost and the startup costs,” he said.
“If Barrick did not do this, we would have to go and borrow to fund our 51 per cent share.
“Under the agreed arrangements, Barrick will have to recoup all of this from Kumul’s (KMHL) 36 per cent of the dividends.
“This is a much more favourable arrangement than borrowing in the market with high interest cost.”
Temu said the other shareholders were the Enga government under Minerals Resources Enga (5 per cent) and the landowners (10 per cent) would receive their dividends.