Article from the Post Courier..’04 Dividend undecided THE board...

Article from the Post Courier..

’04 Dividend undecided 


THE board of directors of Lihir Gold Limited are yet to make a decision on dividend payment to their shareholders.
The company said yesterday that their reinvestment program of profits on improving the value of the company would dictate the company directors’ decision to pay out dividends from the 2004 profit.
Under the reinvestment program, the company had embarked on among others, the construction of geothermal power stations.
Lihir Gold announced yesterday that the company had made a net profit of $US392.2 million (K1.3 billion) but while the balance was non cash equivalent, the company’s profit before impairments adjustments was $US43.8 million (K140.4 million). “That is the figure that our shareholders and the investment community should be looking at,” company secretary Mark Laurie said yesterday.
LGL managing director Neil Swan said the company’s 2004 performance was an improvement from the previous years after the negative impact on first quarter production and cost from the oxygen plant failure. The company saw the following three quarters successively meet stretched production targets to effectively achieve full year production of 600,000 ounces of gold.
“This clearly demonstrate the improved reliability which provides the base for us to build improved financial performance through increased production and reduced costs,” Mr Swan said. 
“Lihir’s financial performance is closely associated with incremental gold production and the increase to 700,000 ounces (of gold) in 2005 will further see improvement in operating cash flow. Building on a sound foundation of continuing production reliability, there will also be an increasing focus on absolute cost reduction in 2005.”
He said while production met targets in the last three quarters of 2004 and a number of improvement programs started to deliver, the effects were offset by the continued adverse impacts of fuel oil prices, exchange rates, increase in material prices and maintenance costs.
Lihir’s gold production last year was 599,386 ounces, effectively achieving the target of 600,000 ounces and 50,000 higher than the previous year.
Annual gold production in the years 2005 to 2008 is expected to exceed 700,000 ounces, an increase of 17 per cent over 2004 production levels.
“The updated forward production forecast shows that the years 2005 to 2008 each have gold production of 700,000 ounces or better with obvious benefits on unit costs and revenue,” Mr Swan said.
“Building on the production reliability achieved in 2004 and the preparatory work for margin enhancement, 2005 will see an increased focus on reducing costs and contracts. Lihir will realise a significant change in profit generation performance progressively during 2005 with an increase in gold production for low margin costs and a reduction in absolute costs.