January 28, 2009 Article from: Australian Associated Press LIHIR...

January 28, 2009
Article from: Australian Associated Press
LIHIR managing director Arthur Hood said a record fourth quarter production allowed the company to report a third successive year of record annual production in 2008, the 882,000 ounces up from the 701,000 ounces in fiscal 2007.

He said production at the company's flagship mine on Lihir Island in Papua New Guinea had been "outstanding'', with 247,000 ounces emerging in the fourth quarter and 771,000 ounces in the full year.

Lihir's result was aided by the acquisition of Equigold, with 22 per cent of output in the fourth quarter coming from Australian and Ivory Coast operations in West Africa.

Mr Hood said Lihir's operating margins increased in the fourth quarter with reductions in unit costs offsetting lower gold prices.

Lihir sold 323,000 ounces of gold in the quarter, at an average realised cash price of $792/oz, down from $847/oz in the three months to September.

But gross cash costs for the quarter also fell by 23 per cent to $403/oz, enabling cash margins to expand by 21 per cent to $387/oz.

Total cash costs fell to $353/oz, from $412/oz in the prior quarter, which Mr Hood said placed Lihir "amongst the world's lowest cost gold producers''.

He said full year production in 2009 was expected to increase from 882,000 ounces to more than one million ounces.

Lihir Island production would be another record, he said, at between 770,000 and 840,000 ounces.

Unit costs were forecast to fall to less than $400 per ounce for the year, assuming stable diesel prices and exchange rates, Mr Hood said.