1 Apr 2009

PNG's Lihir Gold shows vast improvements

11:09 am on 1 April 2009

Papua New Guinea's Post Courier newspaper reports that share prices in the country's major mining operation, Lihir Gold, have shown a vast improvement from last October's lows, and some say its ride higher is not over.

The stock last traded at $3.23, down 13 per cent from a year ago but well above the 32 per cent slump in the benchmark S&P/ASX 200 share index.

Lihir has virtually no hedging, which means it does not lock in prices on contracts and so is heavily reliant on movements in the gold price, and that has been moving in the right direction.

The US Comex market price for April gold deliveries has risen from 705 US dollars in November to 935.80 an ounce last week.

The paper says Lihir has launched a $515 million institutional offering to fund what it says is a new opportunity to fast-track its Lihir Island process plant upgrade at a time when other miners, hit by falling prices, are cutting their demand for mining equipment.

Lihir's key assets are the Lihir Island mine and plant in Papua New Guinea and its mine and processing plant.in Victoria.