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Additional information
Additional Information
Market: ASX
Sector: Gold Mining
Epic: LGL
News: Latest news
Web Site: Lihir Gold Limited
Other Articles: 19-02-201025-01-201020-01-2010

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Lihir Gold Limited

Lihir Gold Limited

Lihir Gold Limited is a gold producer in the Australasian region. The Company’s principal activities consist of the exploration for, development of and mining, processing and sale of gold assets. The company operates gold mines and processing facilities on the island of Lihir, 900 kilometers northeast of Port Moresby in New Ireland province of Papua New Guinea. In March 2007, the Company completed a merger with Victorian gold mining company Ballarat Goldfields NL. Ballarat is building an underground mine and process plant at the historic gold mining centre of Ballarat, 110 kilometers north-west of Melbourne in Victoria. In March 2008, the Company and Equigold NL announced the merger of their businesses.
Thursday, June 18, 2009

Lihir Gold pondering future of Ballarat Goldfields

by Ross Louthean, Mineweb.net company news image

A sobering report by Lihir Gold (ASX: LGL, TSX: LGG; Nasdaq ADR: LIHRY) yesterday prompted the Australian business media today to question the future of the company's Ballarat operations.

Lihir and the absorbed Ballarat Goldfields reportedly ploughed more than $A1 billion ($US797 M) into developing a new operation, essentially below and lateral to the historic Ballarat mines which from the mid 1800s until mothballs in 1918 had total recorded production of 20.59 million ounces.

Yesterday Lihir Gold gave the good news, that group production driven mainly by the Lihir Island mine off Papua New Guinea, had produced 510,000 oz for the first five months of calendar 2009, with the company on track to produce between 1.04 M and 1.2 M oz this year.

However, major infrastructure and development work at Ballarat led to a downgrading of this year's target at that operation to only 20,000 oz.

"Longer term annual production at Ballarat is now anticipated to be in the range of 80,000-100,000 oz, and is dependent on a successful drilling and development programme in the northern zone," the company said.

The company will take an impairment charge against earnings in the current half year in the range of $US250-350 M after tax.

Over the past 18 months the re-development of the Ballarat workings within the city of Ballarat has been an exercise in backpedalling, and only a few months ago company chairman Arthur Hood reportedly said Ballarat was going to produce 150,000 oz per annum.

It is an investment that puzzled many analysts back in late 2006, given that the then Ballarat Goldfields and predecessors back to the 1980s had struggled to make great progress, with earlier versions of the company suffering the ignominy of a collapse of more than one shaft development.

Today's Melbourne Age newspaper quoted Hood as saying what had changed the picture was that some of the central and southern zones of the mine were not delivering target production, so output would be restricted to 20,000 oz as development focuses on the northern zone.

There would not, he said, be any further staff cuts beyond the 200 job loss announced in April.

 

 

Mineweb is a web-based international mining publication focusing on mining financial and corporate news and comment.   

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