PORT MORESBY, PAPUA NEW GUINEA -- (Marketwire) -- 10/29/09 -- Lihir Gold Ltd (TSX: LGG)(ASX: LGL)(NASDAQ: LIHR) ("LGL") ("the Company") is pleased to announce it is to commence paying dividends to shareholders, today announcing an interim distribution of US1.5 cents per share, payable November 30.
The dividend has been made possible by increased production, rising cashflows, a healthy balance sheet and a positive outlook for future growth.
The strength of LGL's position was evident in its third quarter production report, released today, which showed year-to-date gold output for the group of 845,000 ounces and a significant 36% upgrade to the reserves at Lihir Island, to 28.8 million ounces.
The company remains firmly on track to achieve its full year production target of 1 - 1.2 million ounces, which will mark its fourth successive year of record gold production.
LGL CEO Arthur Hood said the decision to initiate dividend distributions marked a major milestone in the development of the LGL group, reflecting the strong progress achieved in rebuilding and reshaping the company over the past four years.
"Improved reliability of production at Lihir Island, combined with the diversified income streams we've created as well as the fundamental restructuring of our balance sheet over recent years, have all underpinned this decision," he said.
Mr Hood said the expansion of the Lihir reserves had followed the 10 million ounce lift in Measured and Indicated Resources announced in August and demonstrated the remarkable nature of the ore body.
"This 7.5 million ounce reserve increase is equivalent to total production at Lihir Island over the past 12 years since operations started, and confirms Lihir as one of the world's richest gold deposits," he said.
"This increase will enable the operation to continue producing well beyond the next two decades, generating significant wealth for the PNG economy and the Lihirian community, and providing increasing returns to shareholders."
Combined gold production from the LGL group totalled 233,000 ounces in the September quarter, comprising 169,000 ounces from Lihir Island, approximately 32,000 ounces from Bonikro in Cote d'Ivoire, 30,000 ounces from Queensland's Mt Rawdon and 2,000 ounces from Ballarat.
Total cash costs for the nine months to September were $378/oz(i), which positions LGL for full year total cash costs below $400/oz, confirming the group among the world's lowest cost gold producers.
Production at Lihir Island was lower than the prior quarter, as planned, due to routine plant maintenance scheduled during the period. The Million Ounce Plant Upgrade project at Lihir remains on schedule and budget, with gold production expected to increase at the operation to an average of one million ounces from 2012.
For the full year, the company expects to produce 770,000 - 840,000 ounces of gold at Lihir Island, 130,000 - 160,000 ounces from Bonikro, and 90,000 - 100,000 ounces from Mt Rawdon. Ballarat's contribution is expected to be approximately 14,000 ounces.
(i) Excluding Ballarat
Documents providing further detail relating to these results, including the "Third Quarter 2009 Production Report," the "Presentation - Third Quarter 2009 Production Results," and a new "Reserves Announcement" are available on the Company's website: www.LGLgold.com and will be available on SEDAR shortly at (http://www.sedar.com).
