Half year operating profit $96m (net profit $36.5m, mainly due...

Half year operating profit $96m (net profit $36.5m, mainly due to delayed recognition of hedges).

Full year production to exceed 850,000oz. That's good! To consist of: Lihir 392k; Mt Rawdon 50k; Bonriko +50k; Ballarat +40k. Hope they're not overpromising again!

Costs have risen worryingly (but that is partly due to the lower production, due to mechanical problems and temporarily lower grades, so should correct during the second half). Average price received increased $175/oz from $737/oz in Dec 07 half to $912/oz in Jun 08 half, yet operating margin only increased by $41/oz to $264/oz. They are expecting sub-$400/oz cash costs this half (meaning a margin increase of around $40/oz, however the gold price is presently >$100/oz less than the Jun 08 half average. However, while we all expect that to recover, will it average $912/oz this half?

Bonriko has started. First ore through the mill on 22 August. First gold pour mid-Sept.

The 1m oz upgrade to Lihir has commenced, with completion due in 2011, so that will take up all the money we might have reasonably expected they would pay in dividends between now and then, unless gold goes up signficantly and costs increase at a slower rate. (I still live in hope that this company will pay reasonable dividends at some stage, rather than continually empire building with all spare cash.)

All in all, a solid result and I think the market will like it.