Lihir boosts gold production by 26%

LIHIR Gold continues to break its own production records, with gold output in 2008 of 882,000 ounces, an increase of 26% on the previous year.
Lihir boosts gold production by 26% Lihir boosts gold production by 26% Lihir boosts gold production by 26% Lihir boosts gold production by 26% Lihir boosts gold production by 26%

The company had set a production target of 850,000oz of gold for 2008.

As well as posting record annual gold production, Lihir has also reported record quarterly production of 315,000oz of gold for the December quarter.

The figure is a 26% increase on September quarter production of 250,110oz of gold.

The company attributes part of the increase in production to the commissioning of the Bonikro mine in Ivory Coast in October, with the operation contributing 22% of the gold produced in the December quarter.

The acquisition of Equigold in June also boosted production with Bonikro, Mt Rawdon and Kirkalocka contributing more than 100,000oz to Lihir's total production for 2008.

"The Equigold merger has enabled us to significantly diversify our revenue and production sources," Lihir managing director Arthur Hood said.

The company's flagship Lihir Island mine in PNG achieved record quarterly production of 247,000oz, taking the total production for the year to a record 771,000oz.

The plant expansion completed in the last quarter of 2007 saw plant throughput boosted by 28% to 6.2 million tonnes in 2008.

Cash costs for the quarter were down to $US353 an ounce from $US412/oz in the previous quarter.

The company attributes the lower cash costs to the inclusion of Mount Rawdon and Bonikro, both low-cost operations achieving cash costs of $US332/oz.

However, cash costs for 2008 increased 33% to $US400/oz from $US301/oz in 2007.

Lihir is expecting to produce more than 1 million ounces in 2009 and, assuming the exchange rate and oil prices remain stable, it expects cash costs to be under $US400/oz.

The company achieved an average realised gold price of $US792/oz for the December quarter and $US850/oz for the year, an increase of 28% from 2007.

Capital expenditure for 2008 totalled around $A250 million, comprising $135 million at Lihir Island, $90 million at Ballarat and $25 million at Bonikro and Mt Rawdon.

The company is forecasting capital expenditure for 2009 of around $400 million.

At December 31, 2008, Lihir had cash of $64 million and no debt drawn down on the $250 million lines of credit set up with its banks.

The standby lines of credit are expected to increase to $300-400 million but the company said its operating cash flows are expected to meet funding requirements.

The Brisbane-based company will release its full year financial results in February.

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