REG - Oil and Gas Devt Co - Material Information

Oil And Gas Development CoAnnouncement

25/03/2025 08:45

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RNS Number : 0452C  Oil and Gas Development Company Ltd  25 March 2025

   OIL & GAS DEVELOPMENT COMPANY LIMITED

   (BOARD SECRETARIAT)

CS04-08 (PSX/LSE/SECP)

March 25, 2025

 The General Manager,               London Stock Exchange Plc.,

 Pakistan Stock Exchange Limited,   10 Paternoster Square,

Stock Exchange Building,

                                  London EC4M 7LS.
 Stock Exchange Road,

Karachi-74000, Pakistan.

                                    Tel: (44) 20 7334 8907

 

Subject:            Completion of the Feasibility Study of the Reko
Diq Project and Associated Approvals

Dear Sir,

Oil and Gas Development Company Limited ("Company") share of the project
represents 8.33% as part of collective 25% held by the three Pakistani
State-Owned Enterprises (SOEs) including Pakistan Petroleum Limited and
Government Holdings (Private) Limited. The interest of the SOEs is held
through Pakistan Minerals (Private) Limited. Of the remaining share, 25% is
held by the Government of Balochistan (15% on a fully funded basis through
Balochistan Mineral Resources Limited and 10% on a free carried basis) and 50%
is held by Barrick Gold Corporation, which is the operator of the project.

 

The updated feasibility study outlines a 37-year mine life, to be divided into
two phases, with Phase 1 having an estimated total capital outlay of USD 5.6
billion exclusive of the financing costs and inflation. Phase 1 is planned to
be funded through a limited-recourse project financing facility of up to USD 3
billion with the remaining funded through shareholder contributions. The
project will leverage five of the currently identified fifteen porphyry
surface expressions within the current mining lease, highlighting substantial
future growth potential.  Negotiations for the proposed project financing are
ongoing. Phase 2 is planned to be funded through a mix of revenue generation
from the project, additional project financing and shareholder contributions
(if required).

 

Under the updated feasibility study, Phase 1 is planned to process 45 million
tonnes of mill feed annually (Mtpa) from 2028. By 2034, Phase 2 is planned to
double the processing capacity to 90Mtpa. Based on existing reserves, the Reko
Diq project is expected to yield production of 13.1 million tonnes of copper
and 17.9 million ounces of gold over the life of mine (100% basis).

 

Based on the above, the board of directors of the Company has approved an
increase in the Company's funding commitment with respect to the project,
reflecting its pro rata share of total capital investment, inclusive of
project financing costs, to USD 627 million (to be adjusted for actual project
financing costs and inflation). As per the estimates, the increase in copper
and gold prices has more than offset the impact of higher project costs. The
board of directors has also given an in-principle approval to obtain project
financing. The shareholder equity contributions by the Company after taking
into account project financing are expected to be USD 349 million (to be
adjusted for actual project financing costs and inflation). The aforementioned
approvals remain subject to shareholders' and regulatory approvals.

 

The above information is submitted in compliance of Section 96 of the
Securities Act, 2015 and Clause 5.6.1(a) of PSX Regulations, for dissemination
amongst your members please.

Yours Sincerely,

 
 

 

(Wasim Ahmad)

  Company Secretary

Copy:

 

Executive Director Offsite-II Department, Supervision Division, SECP, 63, NIC
Building, Jinnah Avenue, Blue Area, Islamabad.

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