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Business |
Lihir shares surge 25c to A$3.25
By BRIAN GOMEZ
LIHIR Gold appears to have cemented its place as Papua New
Guinea’s largest listed company following a merger with
Australia’s Ballarat Goldfields and a sharp A$0.25increase, or
7.7%, in its share price to A$3.51.
The company announced yesterday it had distributed 110.9 million
shares to Ballarat Goldfields shareholders as part of its agreed
swap of five Lihir shares for 54 Ballarat shares.
This news followed expectation that record gold output in the
final quarter of last year would pave the way for production this
year of up to 830,000 ounces of gold, resulting in a strong rally
in the share price.
Lihir’s share price surged strongly ahead yesterday to hit A$3.51
a share, its highest level since May last year, on a turnover of
more than 45 million shares.
Lihir’s managing director Arthur Hood said commissioning of a
three million tonnes a year flotation plant was scheduled to begin
next month and that it would lead to a significant increase in
production.
The flotation circuit will raise the gold grade processed through
the autoclaves to an average of about 6.6 grams a tonne compared
with 5.92 g/t in the December quarter.
The completion of the 20 megawatt geothermal power plant capacity
increased total generation to 56MW and was anticipated to save the
company more than US$40 million (K125.79 million) this year
compared with heavy fuel oil power generation.
Total cash costs for the year could remain at about US$250
(K786.16) an ounce.
In addition a feasibility study on the addition of another large
autoclave, about double the capacity of the present units, could
boost production by a further 300,000 ounces a year to a total
output of more than one million ounces annually.
Mr Hood said this US$550 million (K1.7 billion) project could be
commissioned in 2010.
The company also announced that a total of 191,000 ounces will be
delivered into hedges this year at a price of around US$321 (K1
billion) an ounce with a further 60,000 ounces acting as a
principal repayment for a gold loan.
“Cash revenues are reduced due to delivery of gold into hedges at
prices below prevailing spot prices,” it said.
 
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