Papua New Guinea gold mine declares increased reserves

[By Eric Tapakau] Lihir Gold Ltd-operated mine Lihir now has one of the largest and richest gold deposits in the world with its reserve increased by 36 per cent to 28.8 million ounces.

This of course is great news for PNG, as it means the Lihir Island operation will continue producing for many more years to come, while generating wealth for the PNG economy and Lihir community.

Managing director Arthur Hood said the increase in the reserves inventory was through expansion and refinement of the proposed pit shell and a rise in the long-term gold price assumption from 675 US dollars per ounce to 800 per ounce. He said the increase in gold ounces was also due to adjustments to cost assumptions of mining and processing costs offset by the cost benefits from the million-ounce plant upgrade project on Lihir Island, currently under construction, and depletion by mining to 30 June this year.

"This outstanding increase in reserves we are announcing is a reflection of the true world-class quality of the Lihir Island ore body, and leads directly to an increase in the value of the project for all LGL shareholders," Mr Hood said. "It also confirms the benefits of the initiatives that have been put in place over the past few years to lift production at Lihir Island and improve the economics of the project."

Mr Hood said strong production performance, rising cashflows, a solid financial position and positive outlook for the future have enabled Lihir Gold Ltd (LGL) to commence payment of dividends to shareholders. [passage omitted]

Source: Papua New Guinea Post-Courier website, Port Moresby, in English 1 Nov 09

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