Oil and Gas Development Company Limited (OGDCL), Pakistan Petroleum Limited (PPL), and Government Holdings (Private) Limited (GHPL), three State-Owned Enterprises (SOEs) in Pakistan, have joined forces to form a consortium and sign definitive agreements for cooperation in the reorganised Reko Diq project.
On Friday, OGDCL informed the Pakistan Stock Exchange (PSX) of the development.
“Pursuant to the definitive agreements, the company, alongside the other SOEs, participated in the project through a special purpose vehicle, jointly and equally owned by the SOEs, namely, Pakistan Minerals (Private) Limited (SOE SPV).”
The SOE SPV ultimately purchased a 25% share in the Project from an existing Project participant as part of the transaction and execution plan consented upon under the Definitive Agreements.
“Consideration for the first stage acquisition was paid by each SOE in equal proportion on behalf of the SOE SPV,” the company declared.
Each SOE paid an equal amount of the First Stage Acquisition’s consideration on behalf of the SOE SPV. To achieve this, the SOEs used funds that were put in an interest-bearing, offshore escrow account. These funds totaled $562.5 million in addition to the interest that had already accumulated; the Company’s proportionate share of these funds was USD 187.5 million in addition to the equivalent proportional interest.
The SOE SPV’s and, consequently, the SOEs’ ownership in the Project, which remained at 25%, was restructured through a number of offshore holding entities after the first stage acquisition was completed, according to OGDCL.
Days after Pakistan’s Supreme Court last week ruled that the new Reko Diq mine transaction was valid and encouraged other provinces to change their legislation to reflect the agreement, Barrick Gold Corporation finished reconstituting the Reko Diq project.
The conclusion of the legal procedures, according to Barrick President and Chief Executive Mark Bristow on Friday, was a crucial step in advancing the development of Reko Diq.
“We are currently updating the project’s 2010 feasibility and 2011 feasibility expansion studies. This should be completed by 2024, with 2028 targeted for first production,” Bristow included in the report.
“We envisage a truck-and-shovel open pit operation with processing facilities producing a high-quality copper-gold concentrate. We expect it to be constructed in two phases with a combined process capacity of 80 million tonnes per annum.”