ORD MINNETTEnergy, Materials and Utilities ResearchThe following...

ORD MINNETT

Energy, Materials and Utilities Research
The following are market views of industrial stocks and are not personal securities recommendations.
You should contact your adviser to assess their suitability for your individual portfolio.
Lihir Gold – Hold (LHG A$1.83)
Landslide: Downside risk to DecQ 05 production
• Lihir management have announced that the water supply to the processing plant at their Papua New
Guinea operation has been cut following a landslide. Processing of ore has stopped although
mining operations are continuing.
• The company is targeting gold production of 700koz in CY05E with approximately 280koz (40%)
expected in the DecQ 05. Any prolonged delay in re-starting processing could have a significant,
negative impact on CY05E earnings and cash flow.
• Whilst the company is not yet in a position to provide guidance on the likely closure period of the
processing plant and any associated production loss we estimate that a 25koz production loss could
result in a CY05E US$12M operating cash flow loss and a US$8M NPAT loss.