By BRIAN GOMEZ in Sydney
BRIEFINGS provided to visiting mining analysts have indicated it could take many more years before the strongly performing Lihir gold mine will pay corporate taxes to the Government.
Lihir’s chief financial officer Phil Baker told visiting analysts that accumulated losses by Papua New Guinea’s premier gold mine totalled US$220 million (K642.33 million) at the end of last year with capital expenditure this year amounting to US$150 million (K437.96 million).
The company’s recent big share issue to pay off its gold hedge book and other loans had resulted earlier this year in an additional loss of more than US$450 million (K1.3 billion).
Lihir Gold also expects to complete a feasibility study in the first quarter of next year on a further major expansion that will increase annual gold production by 250,000 to 300,000 ounces annually.
Because of a brief mine closure in the September quarter as a result of an industrial dispute, and unplanned maintenance, planned output this year has been slashed to 750,000 ounces from a previous estimate of between 800,000 and 830,000 ounces.
According to the general manager-corporate development, Graham Folland, the planned expansion, involving construction of an autoclave double the size of previous units, would raise mill throughput to between 10.5 million tonnes and 12.5 million tonnes annually.
Following the commissioning in July of a three million tonnes a year flotation plant, Lihir is capable of processing between 6.5 million tonnes to 8.5 million tonnes of ore annually.
The proposed expansion will require an additional 40 megawatts of power but processing costs were nevertheless expected to be slashed by 14% as a result. The mine presently has 58MW of installed geothermal power.