Lihir Gold Second-Quarter Production Drops 17%, Affirms Full-Year Output
Lihir Gold Ltd., which agreed to a A$9.7 billion ($8.7 billion) takeover by Newcrest Mining Ltd., reported a 17 percent decline in second-quarter production as heavy rain affected mining at its African project.
Output fell to 243,925 ounces in the three months ended June 30, the Port Moresby, Papua New Guinea-based company said today in a statement. That compares with 294,024 ounces a year earlier.
Lihir today restated its full-year output forecast of between 1 million ounces and 1.1 million ounces. Gold prices hit a record of $1,256.80 an ounce during the quarter.
“The second quarter of 2010 was a solid quarter for the company, with production on track to meet full-year guidance, and good progress achieved in the development of the expansion projects at Lihir Island and in Côte d’Ivoire,” Managing Director Graeme Hunt said in the statement.
Lihir shares declined 0.7 percent to A$4.06 at the 4:10 p.m. Sydney time close on the Australian stock exchange.
Production at the company’s main mine on Lihir Island in Papua New Guinea was 196,925 ounces, the statement said. That compares with 219,436 ounces a year earlier. Production at Bonikro in Côte d’Ivoire was down 48 percent to 22,510 ounces.
“The company is well placed to complete its merger with Newcrest,” Hunt said in the statement. Shareholders are scheduled to vote on the Newcrest deal on Aug. 23.
There’s a “possibility” of a rival offer, Hunt said later on a conference call with reporters. “There’s no question about that, but I’m not going to speculate on the probability of it happening.”
Newcrest, buying Lihir to boost sales by more than half, won the support of Lihir’s board for the deal after sweetening its cash and stock bid. The combined group will be the world’s fifth-biggest producer.