07 May Barrick Gold cuts 2020 production guidance amid PNG mine dispute
Barrick Gold has been forced to trim its 2020 production guidance, not due to the COVID-19 outbreak, but because of an ongoing dispute with the Papua New Guinea (PNG) government over the Porgera gold mine.
The world’s second largest producer of gold shaved 200,000 ounces from its previous output estimate and now expects to produce between 4.6 million and 5 million ounces of gold this year.
Barrick and its Chinese partner Zijin Mining at the Porgera mine temporarily halted operations at the mine last week, following PNG Prime Minister James Marape’s decision not to renew the operation’s long-sought lease.
“We put it on care and maintenance,” Barrick CEO Mark Bristow said by phone yesterday following the release of its first quarter earnings statement. “We were forced to do that because we didn’t have the right to mine.”
A judge in PNG has ruled that the mine will remain shuttered while the two sides commence discussions. Barrick has been ordered to return to court on May 8 to report on progress. If an agreement hasn’t been reached, the court will appoint a mediator.
PNG is also asking the company and Zijin to pay US$191 million in back taxes, arising from tax audits conducted between 2006 and 2015. Toronto-based Barrick said the request, received on April 9, had no merit.
In its Q1 earnings call, Barrick said it did not expect any significant impact on production from the coronavirus outbreak, which has forced the closure of mines worldwide. “Our supply chains are fully open,” Bristow said.