From the egoli site. No mention of the Victorian assets at all...

From the egoli site. No mention of the Victorian assets at all though.

Macquarie: LGL - Site Tour Adds to “Buy” Thesis
4/12/2007
Macquarie: LGL - Site Tour Adds to “Buy” ThesisLast week, Lihir (LGL) hosted an analysts’ visit to Lihir Island. The trip included mine, mill and geothermal power plant tours, and various presentations from the CEO Arthur Hood, CFO Phil
Baker, and LGL technical personnel. Macquarie Research Equities (MRE) said that the visit only added to their buy conviction for the stock, and accordingly reiterate their outperform recommendation and 12-month price target of $4.80.

LGL is a turnaround story. All the metrics of performance in the mine and mill suggest to MRE that things have materially changed since CEO Arthur Hood’s tenure commenced two years ago. Positive indicators include: truck availability, material movements, autoclave throughputs, management structure, maintenance, safety statistics, and anecdotal evidence that MRE
gathered from talking to site personnel.

Competitive unit cost outlook. One of the most important aspects of MRE’s positive investment thesis on LGL is its competitive outlook for maintaining costs in the lowest quartile of gold producers globally. MRE believe LGL can maintain costs below US$300/oz through: (1) geothermal power, (2) improved overall efficiency (the turn around story) and (3) greater economies of scale through higher production levels.

Geothermal power expansion. Currently LGL saves ~US$40m a year on power relative to heavy fuel oil (HFO) generated power, or ~US$50/oz. Currently ~75% of processing power (56MW out of 74MW) comes from geothermal power. There is potential for LGL to generate a further 20MW
from current steam sources.

Potential resource increase. LGL has a massive 40moz resource, including 23.6moz reserves. Potential exists to increase the resource base and convert a meaningful portion of resources into reserves in an expansion scenario.

MRE maintain their outperform recommendation and $4.80 target price which represents a P/NPV multiple of 1.7X. The visit overall essentially added conviction to MRE’s view that LGL is a
differentiated gold investment because it has a long life reserve, an enviable production growth profile and a unique ability to maintain costs through geothermal power even as the industry cost curve continues to experience upward pressure.