SMM4 28: Zijin Mining issued a notice saying that on Papua New Guinea Pogra gold mining rights related matters, the PNG government said that it will form a national negotiating team to negotiate follow-up issues. BNL considered that the decision of the PNG Government not to grant the extension of the Bogla gold mining rights had not been due process and violated the legal obligations of the PNG Government to BNL, and that the vast majority of the population and landowners in the area where the mines were located supported the extension of mining permits.
BNL said it was willing to negotiate with the prime minister, central government, provincial government and landowners on the extension of mining rights, asking the government to reconsider its decision not to grant extension of mining rights and to seek a new cooperation plan. If the negotiations fail, BNL will use all legal means to defend its rights and demand compensation from the government for the losses caused by the joint venture.
Under the mine development contract of the Bogla project, BNL still owns the equipment and facilities of the Bogla gold mine. As the east of BNL shares, Barrick Gold has announced that it will not accept negotiations by the PNG government for the purpose of acquiring assets.
Zijin Mining believes that the Bogla Gold Mine is an important economic source for the PNG government and Nga Province, and has an important impact on the employment of the national and provincial governments, landlords and communities, and that it is in line with the interests of all parties to realize the stable and sustainable operation of the mine. While taking into account the interests of all parties, the Company will actively seek legal and reasonable solutions. If the parties fail to reach a new agreement, the long shutdown of the mine will cause losses to all related parties.
Zijin Mining Group Co., Ltd. and Barrick Gold Co., Ltd. (BarrickGoldCorporation, referred to as "Barrick Gold") have a 95 per cent interest in the (Porgera) project in Bogla Gold Mine, PNG Province, in Papua New Guinea ("New Guinea") Co., Ltd. (referred to as "BNL"), in which the Company and Barrick Gold each hold a 50 per cent stake.
The Company paid US $298 million (US $100m for equity and US $198 million for claims) to acquire the interest in BNL50% in 2015, with an annual gold production of approximately 8 tons vested in the company. So far, the company has recovered the full cost of investment in the project.
The mining rights of the Bogla gold mine expired in August 2019, and according to the PNG National Court, the Bogla gold mine can continue to be produced until the PNG Government makes a decision to extend the mining rights. In a press release on April 24, 2020, the PNG government decided not to approve the application for extension of the special mining rights to the Pogra gold mine.
The suspension of production at Bogla Gold Mine will have a greater impact on the company's gold production. The company will speed up the technical transformation of Longnan Zijin and other gold mines, and strive for the same mineral gold output in 2020 as in 2019. With the release of the company's existing gold incremental project capacity, the company is expected to maintain good gold production growth in the future. At the same time, the company will continue to pay attention to market opportunities, timely carry out mergers and acquisitions of gold mines in production, and further enhance the company's gold production.