headed for 600k ozs.

Monday 25 October 9:02 AM


Gold miner Lihir says on track for yr production

SYDNEY, Oct 25 (Reuters) - Papua New Guinea miner Lihir Gold Ltd. (ASX: LHG) said on Wednesday it produced 155,002 ounces of gold in the third quarter and was on track for annual production of 600,000 ounces for calendar 2004.

Lihir, which mines an extinct volcano on a remote island, said production was down on 165,073 ounces in the second quarter but ahead of expectation.

Unit costs rose on the previous quarter but were due to fall again as the operation neared higher grade ores.

"Lihir Gold is continuing to forecast production of 600,000 ounces for the 2004 year," the company said in a statement, noting it was commissioning an upgraded kiln.

"Production is expected to be above 165,000 ounces in the fourth quarter as a result of higher grades, recovery increases associated with the upgraded carbon kiln and there being no planned maintenance shutdowns."

Lihir suffered a a sharp fall in first quarter production in April, hurt by a scheduled plant shutdown and the unexpected failure of its oxygen plant, knocking its share price.

It has forecast a much better performance in 2005 when it reaches richer ore veins.

Shares in Lihir, 14.5 percent owned by Rio Tinto Ltd./Plc. RIO.AXRIO.L, closed on Friday at A$1.19.

The stock has eased 18 percent so far this year in an overall market up about 12 percent. ($1=A$1.43)