Lihir Gold eyes acquisitions, expansionEmail Print Normal font...

Lihir Gold eyes acquisitions, expansion
Email Print Normal font Large font September 22, 2006 - 11:44AM


Lihir Gold Ltd remains on the lookout for acquisitions while continuing to advance plans for a $US400 million ($A529 million) expansion at its Papua New Guinea mine.

Lihir Gold chief executive officer Arthur Hood said the company was looking at possible acquisitions to add to its only mine on Lihir Island, with a likely focus on the Asia Pacific region.

"We're not under pressure to do this, we don't have to rush out and do this," Mr Hood told investors at the Merrill Lynch Australia investment conference in New York.

"The easiest place for us to grow the company is on the island.

"We can go from a 600,000 ounce per annum producer to a plus-one million ounce per annum producer on the island."

He said any acquisition would have to be a worthwhile size, of more than 200,000 ounces, and would likely be in the Asia Pacific time zone, which could include Australia through South East Asia and China into eastern Russia.

"But having said that, if something comes along in Africa or South America and we're first cab off the rank or we see the value and someone else doesn't, then if the gold's there and it makes sense for our shareholders we'll do it," Mr Hood told journalists.

"But the reality is the same time zone for a company of our size is probably what will happen."

The gold miner is also reviewing expansion options at its PNG mine, in light of the geothermal power that it now generates and the fact that it will build a flotation plant which would give it some operational flexibility.

Mr Hood said the study was looking at various options to expand production beyond one million ounces per annum.

The Lihir mine produced 596,000 ounces of gold in the 2005 calendar year, with Lihir forecasting output of 670,000 ounces in the current year and more than 800,000 ounces a year from 2007.

Mr Hood said Lihir aimed to complete the expansion options study by early next year ahead of a feasibility study, with construction likely to commence in 2008.

"It should see us producing in excess of a million ounces per annum from 2009," he said.

The expansion was expected to require capital in the order of $US200 million to $US400 million (($A265 million to $A529 million).