Geothermal power big winner for Lihir By BRIAN GOMEZ in...

Geothermal power big winner for Lihir
By BRIAN GOMEZ in Sydney
LIHIR Gold’s 56 megawatts of geothermal power, which provides about 75% of the company power needs, last year reduced production costs by the equivalent of US$60 (K174.42) per ounce of gold produced and generated US$5 million (K14.5 million) in carbon credits.
Managing director Arthur Hood disclosed this yesterday in Lihir’s 2007 annual report.
He said: “The completion of the flotation and geothermal construction projects during 2007 is a major achievement for LGL.
“Both initiatives will drive a significant turnaround in LGL’s production and cost profile over the coming years, underpinning the long term future of the Lihir project.”
Mr Hood said the company was “resolutely moving forward” with following the announcement last February that it was proceeding with a US$696 million (K2 billion) plant upgrade that would lift production to one million ounces annually from some time in 2011.
The expansion would lift plant throughput from the current 6.5 million tonnes a year to 11-12 million tonnes a year through a staged commissioning.
As a result of the upgrade, overall gold production during the life of the mine will increase by more than one million ounces due to higher average recovery rates, along with significant falls in unit production costs.
Construction will begin in the next four months with the plant completed in stages over the next four years, Mr Hood said.
Low grade stockpiles currently held at the mine totals more than 50 million tonnes containing more than four million ounces of gold, some of which will be processed by the new plant.
Mr Hood said last year’s merger with the underground gold mine at Ballarat in Victoria had made the company “more geographically diversified”.
He said the mine had made solid progress during the year with underground development enabling the establishment of multiple ore sources during the first quarter of this year.
The fall of ground in the main Woolshed Gully decline last November, which halted development work until January, had set back development by three months with commercial gold production scheduled to commence in the final quarter of this year.
The underground resource at Ballarat East has been upgraded to 305,000 ounces in the indicated category, up 27%, with the inferred resource remaining steady at 1.2 million ounces.