K92 Mining Pays US$12.5m To Eliminate Contingent Payment To Barrick
K92 Mining Inc, operator of Kainantu gold mine, announced that it has now paid US$12.5 million (K42.4m) to Barrick Gold Corporation under the Amendment Agreement previously announced on July 17, 2019.
In a statement released this week, it stated under the terms of the Amendment Agreement, K92 was to provide Barrick with a cash payment of US$12.5 million within 60 days from the date of the agreement to eliminate the contingent payment arrangement under the terms of the share sale agreement dated June 11, 2014 (original agreement) which would have been effective until March 6, 2025.
John Lewins, K92 chief executive officer and director, said; “K92 is very pleased to have finalized this payment and eliminated the contingent payment arrangement”. “This allows K92 to aggressively implement its exploration and development plans for the Kainantu gold mine, which has seen the number of drills operating at Kainantu increase from two last year to six currently, with plans for more activity going forward.
“As previously noted, the amendment agreement reflects the commitment that both companies have to Papua New Guinea and the growth of its mining industry, which will benefit from our exploration activities and the expansion of the Kainantu Mine,” Lewins said.
Kainantu mine was first discovered in 1992 and the construction of the mine started in 2004 and commissioned in 2006-07. Previous owners, Highlands Pacific, then sold it to Barrick in 2007 and after a short period of operation Barrick then placed the mine on care and maintenance in early 2009.
The mine had never actually achieved its designed production before it was put on care and maintenance by Barrick.
Six or seven years after it was put on care and maintenance, K92 Mining acquired the mine from Barrick and refurbished the plant and rehabilitated underground, commencing mining operations on the Irumaphimpa deposit in early 2017.