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Business |
Lihir profit rebounds on record
production
LIHIR Gold Ltd says it expects to
exceed the new production records it set last year in the coming
12 months, as the miner yesterday announced a rebound in its
profit.
Lihir reported a net annual profit of US$53.4 million (K167.92
million) for last year, a big improvement on its 2005 result of
US$9.8 million (K30.82 million).
The miner’s 2005 profit was seriously undermined by a landslide
which halted production for a month.
In 2004, the company posted a much higher profit of US$329.2
million (K1 billion).
Lihir chief executive Andrew Hood said the result vindicated the
company’s move to an independent management structure in September
2005.
“What it does say is that the mine is well-managed and has the
correct management team in place. It can perform well and that’s
exactly what we’ve shown in 2006, which has been the turnaround
year,” Mr Hood said.
Lihir set a new gold production record for the year of 651,000
ounces, though it was down on earlier estimates.
The miner’s final quarter performance was 226,000 ounces – up on
the September forecast between 205,000 and 216,000 ounces.
That meant the full-year result exceeded the most recent annual
production forecast of 630,000 to 640,000 ounces for last year.
But the September forecast was one in a series of downgrades.
At the beginning of 2006, Lihir predicted it would garner 670,000
ounces from the operation over the calendar year.
That in itself was 30,000 ounces lower than previous estimates.
But the final-year result did exceed the 2005 production result of
596,000 ounces.
The company has now upgraded its production forecasts for 2007,
predicting a 25% increase on 2006 to between 800,000 and 830,000
ounces.
Mr Hood said recent investments in a flotation circuit and a
geothermal power plant would make the operation far more cost
effective.
“The flotation project will enable us to increase our processing
capacity from four million to six million tonnes per annum, and it
will enable us to feed a higher-grade feed into the autoclaves,”
Mr Hood said.
“Costs will be driven down by our geothermal power station and we
can isolate ourselves from higher oil prices.
“We’ve had a 30 megawatt power station generating electricity for
A$0.01 a kilowatt hour, and that saved US$25 million (K78.62
million) last year.
“We will be commissioning an additional 20 megawatt in the next
month, that will save us an additional US$20 million (K62.7
million) or so this year.” – AAP
 
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