Lihir Gold confirms output drop to 700,000oz

LIHIR Gold has sharply downgraded planned output this year to 700,000 ounces from original expectations it would produce between 800,000 and 830,000 ounces this year.
The news caused Lihir’s share price to drop A$0.18 or 4.6% to A$3.72 a share.
In a statement yesterday the company said operational performance during the current quarter had continued to build on the strong improvements implemented over the past two years, but the grade of ore fed into the autoclaves had fallen below plan.
It said this was due to the recent unplanned maintenance shutdowns of the primary crusher and ore feed to the mill being harder than expected, restricting milling throughput.
It added: “This has necessitated the requirement to blend softer material through the secondary crushing system to maintain feed to the autoclaves. This material had a significantly lower gold grade.
“In addition, the recently commissioned oxygen plant has experienced a compressor failure reducing the amount of ore than can be oxidised. This plant is unlikely to be back on line before the New Year.
“Despite these temporary setbacks, LGL remains on track to achieve record production in 2007.
“This will be followed by another record in 2008, due to the full year’s operation of the floatation circuit expansion at Lihir, and the commencement of production at the company’s Ballarat operations, which remains on schedule for the second half of the year.
“The improved operational performance, together with the expansion projects being planned, and the elimination of all hedging earlier this year, will position LGL for a strong improvement in operating cashflows in 2008 and beyond.”
A rock fall at the Ballarat underground gold mine last Nov 19 stalled development work with expectations that normal operations would only re-start in mid to late next month.
The extended nature of the closure had raised some concerns that gold production at the mine could also be adversely affected.