Golden profit for Lihir (2/2)

Written on the 10 March 2009

by Jason Oxenbridge
 

BRISBANE-based Lihir Gold Limited (LGL) has unearthed record profit of $109.3 million (Y/E 2008) with managing director Arthur Hood describing the gold market as a ‘true flight to quality’.
Record gold production and rising gold prices have enabled the company to report a 54 per cent increase ands its third successive year of record production, at 882,000 ounces, an increase of 26 per cent from 2007.
Hood attributes the increase to significantly higher output at the cornerstone Lihir Island operation in PNG and because of the inclusion of production from the Bonikro mine in Cote d’Ivoire and the Mt Rawdon mine in Queensland. The mines were acquired by LGL as part of its acquisition of Equigold NL in June 2008.
Revenues increased by 52 per cent to a record $1.79 billion, driven by a 23 per cent increase in gold sales volume and a 29 per cent rise in the gold price. For the full year 868,927 ounces of gold were sold at an average cash price of $1326 an ounce, up from $1039 an ounce in 2007.
Despite a mining halt at its Lihir mine in PNG due to landowner disputes last year, the company resumed mining on January 30 and is this year anticipating record gold output from Lihir Island at between 770,000 and 840,000 ounces.
“The result is not just a function of price, but volume,” says Hood.
 “Going into 2009, LGL’s financial position is very secure. We have healthy operating cash flows and widely diversified revenue and production sources. The company has a strong foundation to enable future investment in growth opportunities and to deliver maximum value for shareholders.”
In 2009 group-wide gold production is forecast to increase by more than 10 per cent to in excess of one million ounces. Falling oil prices and favourable exchange rate movements are expected to drive a reduction in total cash costs in 2009 to less than US$400 per ounce.
Hood says he is happy for the gold price to stay ‘exactly where it is’ in a volatile market where $50 per ounce fluctuations are possible.
“In 2008 we firmly established LGL as a global gold producer with growing production and exciting exploration opportunities. I’m confident the next 12 months will see a continuation in the group’s exciting growth journey,” says Hood.
The company has also completed an institutional placement of new fully paid ordinary shares to raise around US$325 million.

Latest News

ASF UNVEILS TRAFFIC PLANS FOR THE SPIT

A SECOND bridge over the Nerang River is the centrepiece of the ASF Consortium's plan to improve traffic flow ...

BHP AND VALE EDGE CLOSER TO $47.5 BILLION SAMARCO DAM DISASTER SETTLEMENT

BHP Billiton (ASX: BHP) and Brazilian mining company Vale have entered into a preliminary agreement with Brazilian fe...

BLK SPORT FOUNDER TYRON BRANT REMAINS CEO UNDER NEW OWNERS

BLK Sport has been purchased from receivers McGrathNicol by a private consortium composed of a TimorLeste-based oi...

CARSALES CEO RETIRES AS NEW COMPETITOR COX FINALISES MERGER

CARSALES will have a new CEO as it takes on a fresh challenger to its crown as the dominant online car sales portal i...

Related News

CARSALES CEO RETIRES AS NEW COMPETITOR COX FINALISES MERGER

CARSALES will have a new CEO as it takes on a fresh challenger to its crown as the dominant online car sales portal i...

BUSINESS CONFIDENCE AT A SIX-YEAR HIGH

SMALL and medium businesses have entered 2017 with their confidence at a six-year high, building on strong gains m...

CONSUMERS PESSIMISTIC ENTERING 2017

CONSUMER confidence remains at its weakest point since April 2016, according to the latest Westpac Melbourne Institut...

RISE OF STARTUP SUPPORT PROGRAMS NOT AS ROSY AT IT SEEMS

ENTREPRENEURIAL cultivation companies in Australia are appearing quickly, but questions have been raised about whe...

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter