why i dislike lihir

Tomorrow's SMH

http://www.smh.com.au/news/Business/Lihir-borrows-US216m-for-restructure/2005/09/14/1126377343646.html


Papua New Guinea gold miner Lihir Gold Ltd has borrowed the equivalent of $US216 million and restructured its hedge commitments as part of a major financial restructure.

Lihir chief financial officer Paul Fulton says the development secures the company's financial strength and underpins future growth.

"It has been carefully designed to meet our dual requirements of securing an attractive funding package for the plant expansion, while also enabling us to restructure our hedging profile," Mr Fulton said.

"The restructure will result in an improvement in cash flows in future years while maintaining an appropriate level of revenue protection, commensurate with our rising production and decreasing unit costs."

Lihir has borrowed 480,000 ounces of gold from a syndicate of 12 banks, led by ABN AMRO, including the four major Australian banks as well as various other international banks.

Lihir intends to immediately monetise the gold, raising approximately $US216 million based on a spot gold price of US$449 per ounce.

The term of the loan is until June 2011, with repayments to be in physical gold, commencing in 2007.



Effectively, Lihir are betting gold won't go up.