Porgera is located in Papua New Guinea, 600 km northwest of the capital, Port Moresby. Porgera is an epithermal deposit hosted within thermally metamorphosed sediments of the Porgera Diorite Intrusive Complex. Alluvial gold was first reported in the area in 1938 by government officials and exploration first commenced in 1964. A number of studies were carried out in the 1980s including an underground exploration adit. Through a series of acquisitions, Placer Dome, now Barrick, came to own 95% of the project, with the local government retaining 5% ownership. Underground mining commenced in 1990 followed by open pit mining in 1992. In 1997, the underground mine was placed on care and maintenance until successful exploration supported a restart in 2002. At the time of publication of the technical report, Porgera had produced 17.4 Moz gold.
The Porgera mine consists of open pit and underground operations. Surface mining is carried out in a single pit, operated with conventional shovel and truck. The pit is planned with a 4:1 strip ratio and provides 30% of the 5.2 Mtpa ore feed. 50% mill feed is stockpiled with the remaining 20% sourced from underground mining. The underground mine is accessed via twin declines, -primarily using AVOCA and longhole supplemented with drift and fill mining. Porgera is planned to produce over 500 koz per year until both underground and open pit mine conclude in 2021, after which four years of processing continue with stockpiled ore. LOM average recovery is 86.2%. Recovery is particularly challenging due to the refractory nature of the gold. As a producing mine, Porgera is under no obligation to disclose project economics. Mining Momentum has used the LOM plan and costs presented in the technical report to estimate a Pre-Tax Cashflow of US$781 M (US$742 M Barrick’s share). Due to negative cash flows toward the end of mine life, NPV increases with discounting, amounting to US$807 M (US$766 M Barrick’s share) when discounted 10% using the Reserve gold price of US$1,200/oz.
| Tonnes (Mt) | Grade (g/t) | Contained (Moz) | Barrick’s (Moz) | |
|---|---|---|---|---|
| Reserve | 72.0 | 2.89 | 6.7 | 6.4 |
| OP | 45.0 | 2.39 | 3.5 | 3.3 |
| UG | 7.1 | 7.38 | 1.7 | 1.6 |
| Stockpile | 19.8 | 2.29 | 1.5 | 1.4 |
| M+I | 26.1 | 5.63 | 4.7 | 4.5 |
| OP | 24.0 | 1.82 | 1.4 | 1.3 |
| UG | 2.1 | 9.42 | 0.6 | 0.6 |
| Inferred | 21.6 | 4.45 | 3.1 | 2.9 |
Porgera is a solid Tier 1 operation. The property contains a high grade pit, high grade underground, and high grade stockpile, with Resources and Reserves of 13 Moz, capable of producing over 500 koz per year for a decade. Mining Momentum notes the somewhat peculiar production profile where open pit production increases in 2020 and 2021 as underground winds down before solely processing stockpiled material for the final four years. In a more realistic scenario of continuous Resource conversion into Reserve, steady state throughput is more likely to be maintained. Focusing on underground Resources, Mining Momentum estimates an additional six and half years of underground mining at the current mining rate. This is projected to produce over 500 koz until 2026 followed by a couple years of stockpile processing. Furthermore, the deposit is open at depth, meaning that positive exploration may further extend mine life. Truly a world class deposit!
The information presented above does not constitute investment advice. This is a summary from the NI 43-101 Technical Report effective December 31, 2011 (INSERT), with commentary from the author. Statements above do not represent the views of Barrick Gold. If any discrepancies arise, the information contained within the NI 43-101 are official and final. For latest depletion data, please refer to the AIF update.