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l slump good for the gold price trend: Lihir
AUSTRALIA’S second-largest gold miner Lihir Gold says it has quality, long-life assets and the gold price trend is all for the good as the company works hard to realise its expansion plans.
In a lightening fast appearance at the Tenth Papua New Guinea Mining & Investment Conference in Sydney this week Lihir Gold managing director Arthur Hood said the gold price would continue on an upward trend.
Speaking to MiningNews.net on the sidelines of the conference, Hood said the gold price trend was good news for long-life producers like Lihir.
“There is a lot of day-to-day fluctuation or week-by-week fluctuation but if you just look back over the past couple of years, at the beginning of 2005 gold was $US400 an ounce, at the beginning of 2006 it was $US500/oz, a year later it was $US600/oz, now it is 25% higher, so the long-term trend and the medium-term trend is up,” he said.
“But the trend is good. Mine supply is declining, demand is going up and you have volatility in the financial markets, all of that is good for gold.”
Hood also said the current set of economic interventions around the world were also good for gold.
“I’m no economist but you have to say the United States is probably in recession now. There is a potential for inflation to kick-in with that amount of money being pushed into the market.”
Speaking to delegates at the conference, Hood emphasised Lihir’s Ivory Coast portfolio, which the company picked up in its merger with Equigold earlier in the year.
He said the recently commissioned mine at Bonikro had some “nice soft oxide” going through the mill and would be a 120,000-ounce producer for at least the next eight years, based on its current reserve.
“But of course we didn’t go to Ivory Coast just to run 100,000oz a year mine. There’s a great exploration package that came with the Equigold merger, some 22,000 square kilometres of prime exploration ground, and 3000 square kilometres of that is within 25 kilometres trucking distance of the Bonikro mine.
“We have nearly half a million ounces of resources already identified within that area [Ivory Coast portfolio] and we are busy drilling away to prove up more resources and reserves to either add limelight to the Bonikro operation or to expand production of the Bonikro operation, and we would hope to see something happen on that in the next year or two.”
At the company’s namesake operations on Lihir Island in Papua New Guinea, he said the company still has 23 million ounces in reserves and 40Moz in resources.
“We are still exploring and we are still finding more resources at Lihir so, an estimated mine life, we will run until 2023 with mining.
“And then we will have stock pile processing for in excess of another 10 years beyond that.”
Lihir’s 1 million ounce upgrade project is also designed to tap into massive stockpiles at the mine, as current processing has been out of tune with the mining rate for quite some time.
“We have spent the last ten years mining ore at the rate six to eight million tonnes of ore per annum but we have only been processing three to four million tonnes per annum of ore – so we have been building up this enormous stockpile and we have some 55 million tonnes of ore stockpiled right now.”
He consequently said the upgrade of the processing plant is the only step necessary to turn Lihir into a 1Moz mine.
Once this upgrade finished Hood expects the plant to process some 10-12Mt of ore per annum.
The upgrade is scheduled for completion in 2011. In the meantime, the company remains confident of hitting its record 700-770,000oz annual target from the Lihir mine this year.
Lihir shares were last at $2.40, up 10c today.
