Papua New Guinea
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Financial competence will be conducted regularly, says Vele

The New Porgera Mining Limited will do a solvency test several times a year before it declares a dividend to shareholders, according to the State Negotiating Team (SNT) chairman Dairi Vele.

Mr Vele said this will make sure that when the company pays dividends, it still has money to pay for its obligations such as expenses and debts.

“Possibly several times a year, the company will do a “solvency test” to make sure that when it pays dividends it still has monies to pay its obligations (expenses and debts) and then it will declare a dividend to all shareholders (including the Landowners),” Mr Vele said.

“The “Solvency Test” is a requirement under the Companies Act. Even you and I have to do a solvency test before we take dividends out of our own companies.

“It stops company owners from taking money and running and leaving debts behind. The Operator is a part of management. The Board of Directors which we have four and they decide whether a dividend is ultimately paid or not.”

Mr Vele also clarified that the New Porgera Mining Limited is an Incorporated Joint Venture (IJV) which means it is a registered company.

“And remember the PNG side (Kumul Minerals own 36 per cent and LOs 15 per cent) collectively own 51 per cent of the company.

Barrick only own 49 per cent of the company.

This is different to an Unincorporated Joint Venture (UJV) where the Partnership isn’t through a company. For an IJV, the way that shareholder returns are distributed is through Dividends.

“Because the LO’s are not paying their share of “restart costs” and “care and maintenance costs”, they will receive a level of dividend (depending on production and sales) on Day 1.

“Barrick and Kumul Minerals are paying the restart and care and maintenance costs so they will receive dividends a little later after they have paid these costs back to Barrick.”