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« The Gold Bugs Index: Something to chew on | Main | The Federal Reserve: The New Robbers! »

Lihir Gold Limited: Going Places!

Lihir Chart 28 Jan 09

Chart courtesy of

From the above chart we can see that Lihir Gold Limited has recovered well from its November 2008 lows of around $0.75 to close yesterday at $2.40, but as we can also see it has been a volatile ride so far and is not one for the faint hearted.

Lihir Gold Limited released the following update detailing their third successive year of record gold production with total cash costs expected to fall to less than US$400 per ounce, the highlights may be of interest to you, which we have tabulated below:

Global gold company Lihir Gold Limited (LGL) has reported record gold production in 2008 of 882,000 ounces, a 26% increase on the prior year and well in excess of its targeted 850,000 ounces.

The result represents a third successive year of record production for LGL and was achieved on the back of record gold output of 315,000 ounces in the December quarter, up 26% on the preceding three month period.

Total cash costs for the LGL group were US$400 per ounce in 2008 and US$353 per ounce for the fourth quarter, which continues to position the company at the lower end of the global gold production cost curve.

LGL has forecast group-wide gold production to increase by more than 10 percent in 2009 to in excess of one million ounces, confirming the company’s standing among the world’s premier gold producers.

The production growth in 2008 reflected an outstanding fourth quarter performance from LGL’s cornerstone Lihir Island operation, which produced 247,000 ounces, taking full year production to a record 771,000 ounces.

The acquisition of Equigold NL, completed in June, also underpinned LGL’s record production for the year, with the Mt Rawdon, Bonikro and Kirkalocka gold mines joining the group.

Together these mines contributed 100,000 ounces to LGL’s production since June.

Managing Director Mr Arthur Hood said LGL’s excellent performance in 2008 highlighted the success of operational improvements implemented at Lihir Island over recent years, as well as the company’s transformation into a multi-mine producer.
“LGL is now established as a global gold producer, with improved operational reliability and an exciting growth profile from a diversified portfolio of high quality assets,” he said.
“The Equigold merger has enabled us to significantly diversify our revenue and production sources. In the fourth quarter some 22% of group gold output came from our Australian and Ivory Coast operations.”

The Bonikro plant in Ivory Coast was successfully commissioned in October and ramped up to produce 37,000 ounces for the quarter.

In Australia, Mt Rawdon in Queensland produced 25,000 ounces in the final quarter, with 54,000 ounces attributable to LGL in 2008. Ballarat in Victoria reported 7,000 ounces for the fourth quarter and 10,000 ounces for the year.

In 2009 LGL has forecast another year of record gold output from Lihir Island at between 770,000 and 840,000 ounces, approximately 130,000 – 160,000 ounces from Bonikro as it delivers its first full year of production, 90,000– 100,000 ounces from Mt Rawdon confirming its track record of consistent production; and 50,000 – 100,000 ounces from Ballarat.

Total cash costs are expected to fall to less than US$400 per ounce. “2008 has been a great year for LGL. We’ve built on the world-class Lihir Island deposit to create a major, diversified gold producer with four operating mines spanning three countries, and a very strong growth outlook,” Mr Hood said.

Lihir Gold Limited plans to release their 2008 full year financial results on 19 February 2009, so make a note of the date as it should make for an interesting read.

For disclosure purposes we do own shares in this company but we are monitoring its progress and we could well become buyers in the near future. If any of our Australian readers have an interest in this Lihir Gold and would like to add their own comments to this article they would be very appreciated by the team here.

According to Google Finance, LGL on The Australian Stock Exchange has a market capitalisation of $7.38 billion with 2.35 billion shares outstanding, a P/E ratio of 54.19. Lihir Gold has a 52week high of $4.39 and a 52week low of $1.52.

There is also plenty of exposure with this stock as it is listed on less than 4 stock exchanges so this stock must be appearing now on a silver screen near you right now.

Lihir Gold Limited (LGL) is a public company, with approximately 2.2 billion shares on issue. The stock is listed in Australia, United States, Port Moresby and Canada on the following stock exchanges:

Australian Securities Exchange (ASX)
Symbol: LGL

NASDAQ Stock Exchange (NASDAQ)
Symbol: LIHR

Port Moresby Stock Exchange (POMSoX)
Symbol: LGL

Toronto Stock Exchange (TSX)
Symbol: LGG

As at 31 October 2007, there were 36,058 shareholders and no option holders.

Have a sparkling weekend.

Stay tuned for updates in this fast moving market…

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