Australias Lihir Gold 2006 net profit rises sharply on increased output, prices

Lihir Gold Ltd said it made a net profit of 53.4 mln usd in 2006, up from 9.8 mln usd a year earlier as gold production at its mine on Lihir Island in Papua New Guinea increased and it benefited from higher prices for the precious metal.

The Australian-listed company said in its December quarter production report, gold production reached a record 651,000 ounces in 2006, up from 596,000 ounces in 2005.

Output in the December quarter reached a quarterly record of 226,000 ounces, due to higher mill throughput and higher grade ore being processed.

Full year revenue was up 38 pct at 310.4 mln usd while the average realised gold price rose to 481 usd per in 2006 from 380 usd in 2005.

In the final quarter total cash costs fell to 241 usd an ounce from 361 usd in the third quarter and 248 usd in the fourth quarter of 2005.

Lihir said expansion of the processing facilities means output is expected to rise to 800,000-830,000 ounces in 2007 with first half output forecast at 330,000-350,000 ounces.
During the year Lihir moved to expand its production based via an agreed takeover of Ballarat Goldfields NL.

Lihir chief executive Arthur Hood said 2007 is expected to see further rapid transformation for the company following progress in 2006 – the company’s first year under independent management.

Lihir was previously managed by Rio Tinto, its former major shareholder.

Last week the company announced it had added 4.4 mln ounces to its gold reserves on Lihir Island, taking total reserves to 23.6 mln ounces, confirming the Lihir deposit as one of the world’s largest gold deposits.

bruce.hextall@xfn.com

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