Lihir Reports a Stunning $109.3 Million Profit

Lihir Gold (LGL) has recorded $109.3 million profit for the year 2008. Analysts on average were expecting Lihir, whose main asset is the Lihir gold mine in Papua New Guinea, to report 2008 net profit of $122.13 million, based on Reuters Estimates, against a $24 million loss in 2007. Lihir Gold, the second largest gold mining company said second-half sales rose 64% to $468.9 million from $286.7 million, a year ago. Net profit rose 229.0% to $73.7 million compared to net profit of $22.4 million, a year ago.

Lihir Goldsaid group production is expected to excess one million ounces in 2009, and its full year earnings are expected to show "solid improvement". Record gold production and rising gold prices have enabled LGL to report a 54% increase in underlying profit(i) to $184.9 million for the year to December 2008. Revenues increased by 52% to a record $756 million, driven by a 23% increase in gold sales volume and a 29% rise in the gold price. For the full year 868,927 ounces of gold were sold at an average cash price of $850 an ounce, up from $666 an ounce in 2007.

Indicated Resource at the Akissi So deposit, close to LGL's Bonikro mine and process plant, has been lifted from 123,000 oz of contained metal, to 352,000 oz, and Inferred Resource has increased from 8000 oz to 50,000 oz. Hood, the Managing director of Lihir said, “The next 12 months will continue the growth journey for Lihir and I look forward to reporting a solid improvement in operating and financial performance for 2009”.

In 2009 group-wide gold production is forecast to increase by more than 10 percent to in excess of one million ounces. This is expected to include another year of record gold output from Lihir Island at between 770,000 and 840,000 ounces, approximately 130,000 - 160,000 ounces from Bonikro as it delivers its first full year of production, 90,000 - 100,000 ounces from Mt Rawdon confirming its track record of consistent production; and 50,000 - 100,000 ounces from Ballarat. Lihir did not declare dividend. Lihir Gold (LHG) shares fell 0.84 per cent to close at $3.53 on Thursday.