cto retirement plan, page-15

Find8 - I was sent this article on Lihir today. You will be keen to know they purchased the Ballarat mine for US$350M. Might help with your estimation of CTO.

Lihir to write down Ballarat asset
PERTH: Lihir Gold Ltd says it will write down the value of its Ballarat mine by as much as A$441 million (K981.53 million) following disappointing production at the Victorian operation.
Lihir has cut its full year production forecast for Ballarat to 20,000oz, down from an already revised 50,000oz, following mixed results from the central and southern zones in the March quarter.
The company is now working to gain access to larger than anticipated ore zones in the northern areas of the mine.
Longer-term annual production at Ballarat of between 80,000oz and 100,000oz depends on the success of drilling and development programmes in the northern zone, the miner said.
The gold miner told the Australian stock exchange yesterday that it would book an impairment charge of between US$250 million and US$350 million to reduce the book value of the net operating assets at Ballarat from US$457 million on Dec 31, 2008.
Ballarat was acquired by Lihir in 2007 for US$350 million in an effort to diversfy production away from its geologically unstable Papua New Guinea namesake mine.
The former Ballarat Goldfields Ltd operation has since risen in value.
Lihir’s friendly A$1.1 billion takeover of Equigold NL last year gave it two of its top three producing assets, the Bonikro in mine in Cote d’Ivoire, west Africa.
This mine would largely offset poor performance at its Ballarat mine in Victoria, which produced 70,000oz in the five months to May 31, and the Mt Rawdon mine in south-east Queensland, which produced 44,000oz during the period.
The lion’s share of its 510,000oz total production in the period, 389,000oz, came from Lihir’s flagship Lihir Island mine.
And while the miner appears to be on track to meet its promised, full-year gold output target of between 1.04 million oz and 1.2moz, analysts say it could be planning further acquisitions to meet a long-term production goal of 1.5moz a year.
The renewed guidance compares to Lihir’s forecast in May of between 1moz and 1.2moz.
State One Stockbroking resource analyst Sam Berridge told AAP that Lihir would likely meet its production goal this year due to the outperformance of its Bonikro mine. – AAP