Lihir posts loss after Ballarat write-down

Business, Main Stories

The National

LIHIR Gold Ltd (LGL) has recorded a loss in the first half of this year although its underlying profit rose by massive 130% compared to the same period last year.
Lihir posted a net loss of US$300.9 million (K822.1 million) for the six months to June 30, a sharp contrast from the US$36.5 million (K99.73 million) in the previous corresponding period.
Without the write-down, however, LGL could have posted a US$154.9 million (K4232 million) profit from the six-month operation.
The loss in profit of US$300.9 million (K822.1 million) takes effect when it pays US$409 million (K1.117 billion) after tax towards writedown of Ballarat mine’s operations in Victoria, Australia –  the mine is on sale and is expected to compete sale next year.
But the New Ireland miner aims for solid production in the second six months of this year with full output targeted between one million ounce to 1.2 million ounce.
“Going into the second half of this year, we are on track to deliver our fourth consecutive year of record gold production,” LGL managing director Arthur Hood  said while releasing the results for the first half of this year ended June 30.
Mr Hood said the strong profit performance for the first half reflected continued outstanding production at the cornerstone Lihir Island operation and the benefits of the Equigold acquisition completed last year.
 “On Lihir Island, the many improvements that have been implemented over the past four years have transformed the operation, delivering higher and more reliable production, and significant cost benefits,” he said.
The company said the strong profit result for the six months confirmed big operational improvements that were achieved at the Lihir Island operation where production was at record levels, as well as the benefits of the Equigold acquisition, completed in June last year.
Revenue was up 97% to a record US$564.1 million (K1.541 billion) for the half year, due to an increase in gold sales, which rose by 99% to 614,000 ounces.
On a unit cost basis, LGL said costs declined in the half, with total cash costs down 20% to US$350 (K956) per ounce, confirming LGL’s position at the lower end of the global cash cost curve.
In addition to the financial results, LGL had released increased resource estimates for both Côte d’Ivoire (Ivory Coast) and Lihir Island, demonstrating the quality of the company’s assets in each country.
On Lihir Island, measured and indicated resources increased 31% to 43 million ounces, and Inferred Resources are up 62% to 5.5 million ounces.
In Côte d’Ivoire, LGL lifted Measured and Indicated Resources by 22% to 1.7 million ounces.
“In addition, the Equigold acquisition has proven to be an excellent transaction for LGL, bringing immediate gains, strong cashflows and exceptional exploration upside,” he said.
Gold production for the LGL group in the half year totalled a record 612,000 ounces, including 466,000 ounces from Lihir Island and 138,000 ounces from the former Equigold assets of Mt Rawdon in Queensland and Bonikro in Côte d’Ivoire.