ISLAMABAD - Barrick Gold Corporation, while announcing plans to invest $7 billion in Reko Diq project, has sought the ratification of the deal from the Parliament and Supreme Court for legal protection.

Definitive agreements’ underlying the framework agreement were currently being finalised by teams from Barrick and Pakistan and as soon the legalization process completes the company will revise and update the original feasibility study, Chief Executive Officer (CEO) of Barrick Gold Corporation Mark Bristow said while briefing media here.

Pakistan and the consortium led by Barrick Gold Corporation reached an out-of-court settlement during the previous government, and the company is negotiating the legal framework with the incumbent government. The CEO, however, was confident that they would start production from the Reko Diq Copper-Gold mine by 2027-28.

“For the longevity of partnership and long-term viability of the investment, this agreement needs to be confirmed through legislation of parliament and the Supreme Court to review this deal,” Mark said. “We don’t have any substantial disagreement with any stakeholders regarding the deal,” he added. The CEO said that “We want a partnership framework that complies with the law,”, Total transparency was desired in the project’s execution, he added.

An agreement reached in principle between the government of Pakistan, the provincial government of Balochistan, and Barrick earlier this year allows for the reconstitution and resumption of the project, which has been suspended since 2011. It will be operated by Barrick and owned in equal proportions by Barrick, the Balochistan provincial government, and Pakistani state-owned enterprises.

Under the agreement, the Barrick Gold would be the operator of the Reko Diq mine with 50 per cent share, 25pc by Pakistan’s state-owned enterprises and 25pc by the Balochistan government. A consortium of Pakistan state-owned enterprises and the government of Balochistan will be equal stakeholders in the successful development of RekoDiq. Legalisation and closing will occur at completion of legalization process, he said. On closing, the mineral agreement and joint venture will take effect; major project lease and licences will be issued; resolution of ICSID litigation will be complete, he said and added that Antofagasta will sell their interest in the project. He said that Pakistan is the most desirable location for investment. He added that legal protection was essential in Pakistan due to the substantial foreign investment. Updating feasibility study will take two years, and following its completion, a formal decision for the construction of the project would be made by 2024, he explained.

| Company seeks ratification of deal from Parliament and Supreme Court for legal protection

Barrick Gold Corporation confident to start production from Reko Diq Copper-Gold mine by 2027-28

The CEO termed Reko Diq one of the world’s largest underdevelopment copper gold deposits standard open pit mining method with low strip ratio expected to produce high-quality clean copper-gold concentrate Historical resource for five porphyry deposits of approximately 3 billion tonnes grading 0.48pc copper and 0.26g/t gold in measured and indicated category, and 2.9 billion tonnes at 0.35pc copper and 0.18g/t gold in inferred category (100pc basis). Mark claimed that during construction stage the project was expected to employ 7,500 local people and with starting of production it would generate 4,000 long-term jobs. With its unique combination of large scale, low strip and good grade, he said the Reko Diq would be a multi-generational mine with a life of at least 40 years. The project life can be extended up to 100 years, he added. He said that they were negotiating with IFC and export-import banks for a $4 billion debt comprising fifty percent of the total debt. $2 billion will be secured by the project’s consortium.

To a query about funding from the Barrick side, he ruled out offering an IPO to generate funds and added that they had a strong balance sheet and did not need to raise money because they could support investments. According to him, the project will attract $7 billion in investment, with a $4 billion minimum investment in the first phase and a $3 billion minimum investment in the second phase. Regarding the establishment of a refinery in Pakistan to process the project’s raw materials, he stated that at this time it is not feasible. In response to a question about the security situation in Balochistan, he stated that the Barrick firm had worked in conflict-ridden regions. It devised its own strategy for project execution. The company will invest in the communities, in social responsibility, and provide 100pc employment to Pakistani nationals, he said. The company would employ a three-pronged strategy to provide high-quality assets in order to unlock additional value for the Pakistani and Baloch people. Balochistan’s infrastructure, water security, and energy supply will be improved. At Reko Diq, Balochistan’s shareholding will be fully funded by the project and the federal government, allowing the province to reap the dividends, royalties, and other benefits of its 25 percent ownership without making any financial contributions to the construction or operation of the project. He said that during construction Balochistan will receive $70 million in royalty, with $5million in the first year, $7 million in second years, and $10 million each for the remaining years.