Watch the width of the valve seat contact areas with that engine, and measure the maximum bore diameter. It is very unlikely the bore will wear the 0.010" to Honda's service limit, but after very long use the valve seat contact areas can increase beyond the 2.0 mm maximum. The correct width is only 0.8 mm, and it is easier to maintain a good seal in service if you stay at around 1.2 mm. Once you get an excessive contact width you need a set of valve seat cutters to put it right. Check the valve stem fits in the guides as well: some engines end up with poor fits, especially of the exhaust valve stem. Maximum allowable stem to guide clearance is 0.013" inlet, 0.014" exhaust.
The GXV120 is my favourite small Honda engine. The GXV140 runs at least as well, but has a plastic camshaft, which I don't much care for as a long term proposition. The GXV160 I just don't like. I can't tell from your picture whether you have a single height-lever model (Australian-made base) or a 4 height-lever model (Japanese-made base). I much prefer the 4 lever model due to superior durability, but in normal home use you aren't likely to wear out either type. Personally I don't tolerate bar blades: it isn't that hard to convert to Honda's 4 blade swing-back system which seems much less inclined to damage the base from stone impacts, and gives a much better finish to the lawn.
