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5 Stocks Poised for Growth in Papua New Guinea's Golden Frontier Amid Record High Gold Prices

T.AEM, NEM | December 20, 2023

(NewsDirect)

Gold has recently achieved an unprecedented milestone, surging to an all-time high of $2,135 per ounce. This extraordinary rise has been fueled by expectations of interest rate cuts, a weaker dollar, and geopolitical tensions, heralding a period of unprecedented financial uncertainty. Investors' anticipation of a change in the US Federal Reserve's strategy, which could lower borrowing costs, has increased the appeal of precious metals.

In the wake of this historic rise, savvy investors are exploring avenues to capitalize on the record-high gold prices. An intriguing prospect emerges in Papua New Guinea, a region poised for rapid gold expansion. GlobalData reveals that Papua New Guinea, ranked as the world's eighteenth-largest gold producer in 2022, is experiencing a resurgence with a 4% uptick in output compared to the previous year. Notably, the nation is primed to embrace a significant upswing, projecting an 11% compound annual growth rate (CAGR) in gold production from 2022 to 2026.

Papua New Guinea, boasting world-class geology and home to multiple renowned mines and deposits, is fast becoming one of the hottest mining jurisdictions globally. The active involvement of industry titans Newmont (NYSE: NEM) and Barrick (NYSE: GOLD), the world's largest and second-largest gold mining companies, respectively, underscores this rise in prominence in the region.

Let's dive into the gold-rich landscape of Papua New Guinea and explore a few key players shaping the future of gold mining in this dynamic region.

Great Pacific Gold Corp. (OTC: FSXLF) (TSXV: GPAC) is emerging as a prominent player in gold exploration, positioned in Papua New Guinea (PNG) and Australia. The company's recent acquisition of a substantial 2,166-square-kilometer mineral exploration land package in PNG underscores its commitment to tapping into the region's high-grade gold potential.

In PNG, Great Pacific Gold boasts a diverse portfolio, including the Arau Project in the Kainantu region, the Wild Dog Project on the island of New Britain, and the Kesar Creek Project contiguous with K92 Mining Inc. tenements. The Kesar Creek Project, in particular, has received Exploration License 2711, with assays from initial sampling programs revealing high-grade gold from veins similar to those on K92 Mining Inc. tenements.

Australia is also a key focus for the company, with projects such as the Lauriston and Golden Mountain Projects in Victoria. A major breakthrough came from the Lauriston Project, where drillhole CRC07 intersected 5m at 166.35 g/t gold, including 2m at 413 g/t gold. This discovery, at the Comet Prospect, mirrors the geological setting of the renowned Fosterville Mine, positioning Great Pacific Gold as a significant player in Australia's gold exploration scene.

Notably, CEO Bryan Slusarchuk, co-founder and former President of K92 Mining, brings valuable expertise to the helm. The company's director, John Lewins, currently serving as the CEO of K92 Mining, further solidifies its leadership with experienced industry professionals.

Great Pacific Gold's prominent geographic positioning, including a 130-square-kilometer package bordering K92's mining tenements in PNG, demonstrates a keen focus on proximity to proven mining success.

Outside of PNG, Great Pacific Gold Corp. has unveiled a groundbreaking discovery in Victoria, Australia, situated directly south of Agnico Eagle's (NYSE: AEM) Fosterville Mine tenements. The company's recent drilling program at the Lauriston Project's Comet Prospect has yielded remarkable results, with drillhole CRC07 intersecting 5m at an extraordinary 166.35 g/t gold, including 2m at an astonishing 413 g/t gold from 95m.

This revelation marks a significant milestone for Great Pacific Gold, as the high-grade intercept at the Comet Prospect surpasses any previous reports from the Lauriston Project. Notably, this discovery comes from the last hole of the 2023 drilling campaign, adding an element of fortunate timing to the achievement.

The Comet Prospect, exhibiting geology akin to the renowned Fosterville Mine, showcases visible gold observed in chip trays during drilling. This finding further emphasizes the potential of the area, with the west-dipping Comet fault zone mirroring the structural setting of the mineralization present at Fosterville.

This success comes as Great Pacific Gold prepares for extensive drilling in Papua New Guinea in Q1 2024. CEO Bryan Slusarchuk expressed enthusiasm about this new high-grade discovery, emphasizing its similarity to Fosterville's structural setting at the Agnico Eagles property. The company is already planning an additional drill program based on these exceptional results, reinforcing its commitment to unlocking significant value in gold exploration.

In conclusion, Great Pacific Gold emerges as a formidable player in the dynamic gold exploration landscape, leveraging strategic land positions, experienced leadership, and groundbreaking discoveries to unlock the full potential of its projects in PNG and Australia.

Situated in Papua New Guinea's Eastern Highlands province, K92 Mining Inc. (OTCQX: KNTNF) (TSX: KNT) stands out as a robust player in the gold mining sector. The Kainantu Gold Mine, a testament to the company's strategic prowess, has demonstrated resilience and begun to reveal its untapped potential.

K92 is financially secure, with a cash reserve of US$79.9 million as of their most recent report on September 30, 2023. This strong financial position is critical to the company's growth, as evidenced by a recent US$100 million senior secured loan. These financial moves, practical and strategic, position K92 for sustained expansion.

In terms of operations, K92 showcased its mettle by producing 26,225 ounces of gold equivalent in Q3 2023, despite challenges earlier in the year. The incident in June tested the company's operational resilience, with the process plant setting multiple throughput records and reaching an average of 1,542 metric tons per day in September.

Mining, which is inherently uncertain, requires adaptability, and K92 demonstrated this by overcoming disruptions. The twin-incline development, though facing setbacks, promises enhanced mine flexibility and productivity. Ore extraction from this area lays the foundation for K92's future successes.

Committing to growth, K92 allocated a US$20 million budget to exploration. This strategic investment contributes to updated resource estimates, with Kora and Judd deposits witnessing significant increases in measured and indicated resources. These efforts underline K92's commitment to expanding its resource base.

Navigating Papua New Guinea's gold reserves, K92's forward-looking strategies take center stage. The ongoing Stage 3 expansion and surface infrastructure enhancements are integral to K92's vision. Despite challenges, these initiatives depict a company on the brink of Tier 1 producer status, poised for substantial growth in the dynamic world of gold mining investments.

In conclusion, K92 Mining Inc.'s journey unfolds as a narrative of resilience, strategic foresight, and operational excellence in the competitive gold mining sector.

Newmont Corporation (NYSE: NEM) (TSX: NGT) has made significant waves in the mining industry with its recent acquisition of Newcrest Mining Limited, positioning itself as the world's leading gold company with robust copper production. This historic move marks a milestone not only for Newmont but for the entire mining sector, setting new standards for gold and copper mining.

Tom Palmer, Newmont's President and Chief Executive Officer, expressed the significance of this transformational acquisition, stating, "Today marks a historic milestone in our company and the industry with the successful completion of this transformational acquisition of Newcrest by Newmont." The focus now turns to integrating Newcrest's assets and personnel efficiently and responsibly into Newmont's proven operating model.

The combined entity boasts an unmatched portfolio, featuring more than half of the world's Tier 1 assets. Newmont's operations span across Africa, Australia, Latin America & Caribbean, North America, and Papua New Guinea, emphasizing the company's commitment to mining in favorable jurisdictions. This expanded portfolio includes operations with scale, margin, and mine life, positioning Newmont for robust and lasting returns for decades.

The acquisition is expected to strengthen Newmont's position as the responsible gold mining leader, with a concentration of high-quality operations and reserves in low-risk jurisdictions. Anticipated annual pre-tax synergies of $500 million, achievable within the first 24 months, further support the company's commitment to safe, profitable, and responsible gold and copper production.

Furthermore, the transaction underscores Newmont's dedication to its shareholders, maintaining balanced capital allocation priorities and an industry-leading non-binding dividend payout. Since the Goldcorp transaction in 2019, Newmont has paid over $5 billion in dividends, demonstrating a steadfast commitment to shareholder value.

With a deep bench of experienced leaders and subject matter experts, along with existing regional teams in Australia and Canada, Newmont is well-positioned to navigate the complexities of the mining industry. The company remains committed to industry leadership in environmental, social, and governance performance.

In connection with the acquisition, Newmont issued 357,691,627 new shares of common stock. The subsequent announcement on December 8 highlighted Newmont's commitment to optimize its portfolio, with offers to exchange outstanding notes issued by Newcrest Finance Pty Limited, a wholly-owned subsidiary of Newmont, further demonstrating the company's financial planning.

This acquisition solidifies Newmont's status as the biggest mining company in the world, underscoring the growing potential of the gold rush in Papua New Guinea. As the industry landscape evolves, Newmont's moves position it at the forefront of global mining endeavors.

Barrick Gold Corporation (NYSE: GOLD), a global leader in gold and copper mining, has recently made significant strides in Papua New Guinea (PNG), solidifying its position as a major player in the thriving gold market. With diverse ownership interests in gold and copper mines spanning the Americas, Asia, and Africa, Barrick Gold Corporation has consistently demonstrated its commitment to responsible mining practices and fostering partnerships with host countries.

In October, the company achieved a significant milestone when Governor General Sir Bob Dabae granted a special mining lease for its New Porgera Limited (NPL) mine in PNG, paving the way for the revival of the gold mine. The grant followed the signing of a mining development contract and a fiscal stability agreement between the government and NPL. Barrick President and CEO Mark Bristow expressed optimism about restarting production at the mine, emphasizing the importance of compensation agreements with mine property landowners.

In a more recent announcement on December 10, Barrick Gold Corporation revealed that the Porgera mine in PNG is poised to resume operations later this month, with gold pouring expected in the first quarter of 2024. The reopening follows the satisfaction of conditions outlined in the Porgera Project Commencement Agreement, including a new ownership structure.

Barrick President and CEO Mark Bristow highlighted the success of the company's host-country partnership model, previously proven effective in Tanzania and adopted for the Reko Diq copper and gold project in Pakistan. The new ownership structure allocates 51% to PNG stakeholders, including local landowners and the Enga provincial government, and 49% to Barrick Niugini Limited (BNL), a joint venture between Barrick and Zijin of China.

With BNL operating the mine, PNG stakeholders are set to receive 53% of Porgera's overall economic benefits, projected to exceed $7 billion over the mine's anticipated 20-year life, based on an assumed gold price of $1,800 per ounce. Prime Minister James Marape hailed the revival of this major contributor to the country's economy, marking a significant shift in PNG stakeholders having a majority interest in a key resource for the first time.

Barrick Gold Corporation's strategic moves in PNG underscore its commitment to sustainable mining practices and collaborative partnerships, positioning the company as a key player in the burgeoning gold rush in the region. As the Porgera mine resumes operations, Barrick Gold Corporation stands as a beacon of growth, contributing to the economic prosperity of Papua New Guinea.

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