LGL - Lihir Gold

[Sean K]

Looks to be breaking well up from that formation above.

And, unbelievably, some good news from Lihir and a possible upgrade. Unheard of in my 12 or so years owning the stock!

LGL REPORTS PROMISING DRILLING RESULTS AT LIHIR ISLAND.

UPDATES RESERVES AND RESOURCES

Lihir Gold Ltd (LGL) is pleased to report encouraging results from an ongoing drilling program at Lihir Island, which will lead to an increase in the current resource estimate. Drilling results received from holes targeting an area east-northeast of planned mining development included the following intercepts:

• 86 metres at 3.96 grams per tonne
• 210 metres at 3.40 grams per tonne
• 101 metres at 2.99 grams per tonne
• 94 metres at 3.02 grams per tonne.
• 186 metres at 2.84 grams per tonne
• 138 metres at 2.60 grams per tonne

These intercepts were returned from drill holes located outside of the existing resource. A table setting out the full results is included at Appendix One. Additional drilling is to be carried out this year, with results received to date indicating the likelihood of significant resource increases in this area.

 

[Prospector]

Hey Kennas

I dabbled with LGL a few years ago (LHG) and got out a few years ago, then on January 2 bought in again nicely at $3.60 and have generally seen blue sky since. Reason for buying in was we saw it being involved in a takeover. Nice to see we think alike, and the positive news today just added to pleasure. Guess I am a little less patient than you!

 

[the barry]

Looks to be breaking well up from that formation above.

And, unbelievably, some good news from Lihir and a possible upgrade. Unheard of in my 12 or so years owning the stock!

Hey kennas, 12 years.... what price did you get in at? Finally all things appear to be coming together at once for this stock, positive news and higher gold prices. At present the move to unhedge looks like paying some serious dividends, has to be looking like a serious takeover prospect.

 

[explod]

Hey kennas, 12 years.... what price did you get in at? Finally all things appear to be coming together at once for this stock, positive news and higher gold prices. At present the move to unhedge looks like paying some serious dividends, has to be looking like a serious takeover prospect.

The large institutional buys this afternoon would indicate a big rerate of this stock going forward. A lovely ride.

 

[Sean K]

Hey kennas, 12 years.... what price did you get in at?

First bought in 96 around $1.75 ish and have been buying and selling ever since. Was lucky to pick up quite a few in 00. Haven't sold any since 04, and have just been adding on dips. Pretty significant break up today on huge volume.

Could just as easy have an eathquake destroy the mine tomorrow too...

 

[explod]

First bought in 96 around $1.75 ish and have been buying and selling ever since. Was lucky to pick up quite a few in 00. Haven't sold any since 04, and have just been adding on dips. Pretty significant break up today on huge volume.

Could just as easy have an eathquake destroy the mine tomorrow too...

Absolutely, that and the soveriegn risk is what has held me back from taking a big slice. But good none the less.

But an engineer on the project there I ran into at Nandi, Fiji of all places a few years ago (we were both fairly inebriated) stated that they are sitting on a mountain of the stuff at mich higher grades is still to be revealed. Maybe this it it as announced today .

 

[urgalzmine]

Hey Guys

I have been watching LGL and bought and sold it last few years but I am concerned with the gold mines in PNG.

They are on very unstable volcanic ground. I believe they are using some geothermal system that reduces their cost as they dont use diesel.

I think last year the mine callapsed? sounds pretty risky cant they just use cynide like all the other miners

 

[Sean K]

I think last year the mine callapsed? sounds pretty risky cant they just use cynide like all the other miners

Mine collapsed? RightO. Maybe there was a road close even?

Yes, sovereign risk, one real mine (Ballarat unknown, IMO) earthquakes, etc etc. They also have about 20m oz au at great grades expanding. It's a risk/reward decision.

 

[barrett]

Hey Guys

I have been watching LGL and bought and sold it last few years but I am concerned with the gold mines in PNG.

They are on very unstable volcanic ground. I believe they are using some geothermal system that reduces their cost as they dont use diesel.

I think last year the mine callapsed? sounds pretty risky cant they just use cynide like all the other miners

Hi, the mine itself didn't collapse, but in late 05 there was an earth landslide along about 1km of the access road between the township and the mine which cut water&power to the mill. The island is believed to be geotechnically a little unstable but I agree that the 20Moz reserves, within a 40Moz OP resource grading a respectable 3g/t, compensate for the small risk of serious tectonic or volcanic activity. That's taking into account Lihir's relatively low Mcap/oz among mid/large caps globally, well controlled cash costs and increasing production with mill expansion to be financed from free cash flow.
That said, I have to admit to having had a rough morning when that 8.1undersea quake and tsunami went off in the Solomons last year.. directly in line with the island it's not called the rim of fire for nothing :evilburn:

 

[urgalzmine]

Oh well LGL has more reserves than NCM, lets hope mother nature doesnt have a bad day.

Good luck with this one dudes

 

[Sean K]

Back to resistance around the $4.35 mark. The Feds doing it's best to help POG along. The mc of this is probably getting out of reach for a takeover, unless POGs seen to be long term much higher. Maybe I'll get a dividend one day?

 

[Sean K]

This one's out of the blue to me.


MELBOURNE (Dow Jones)--Papua New Guinea's Lihir Gold Ltd. (LGL.AU) said Thursday that it had agreed to an all-stock takeover of Equigold NL (EQI.AU) worth about A$1.1 billion to geographically diversify and eliminate "single mine asset risk."

Under the deal, Equigold shareholders will get 33 Lihir shares for every 25 Equigold shares they own, Lihir and Equigold said in a joint statement. Based on last closing prices on the Australian Stock Exchange, the deal values Perth-based Equigold at A$5.33 a share, a 24% premium from its close at A$4.30. Lihir last traded at A$4.04.

The combined market capitalization of the two companies will be about A$9 billion, Lihir said.

"This new company will hold a portfolio of long life, high quality assets in diverse geographic locations, effectively eliminating single mine asset risk and leading to improved valuations for the combined group," Lihir Chief Executive Arthur Hood said in the statement.

After the merger, Lihir, which is expected to mine at least 700,000 ounces of gold this year at the PNG island of the same name, will also have operations in Ballarat and Mount Rawdon in Australia and Bonikro in the Ivory Coast. Production of about 1.2 million ounces is expected in 2009 and 2010, Lihir said.

Equigold directors, which own about 10.4% of the company's shares, intend to vote in favor of the takeover in the absence of a better offer. Equigold Managing Director Mark Clark will join Lihir and report to Hood.

 

[Sean K]

From LGL in the ann:

For LGL, the merger will:

• Provide important diversification benefits, immediately adding cashflows from Equigold’s Mt Rawdon operation in Queensland, with Bonikro in Ivory Coast to be in production by the end of July;
• Establish a substantial base for growth in the highly prospective greenstone belt in Ivory Coast, where Equigold has reported promising drill results on extensive exploration tenements, which are expected to lead to significant growth in resources and reserves;
• Increase management capability and operational strength through the addition of high quality executive management and production teams at Mt Rawdon and Bonikro;
• Increase net present value per share, creating strong financial returns for shareholders.

I'm certainly happy about the diversification, but unsure about EQIs assets...

 

[Young Gun]

You want to see something spooky , compare the LGL and EQI charts together on one chart, they line up 90% each movement.

 

[oldblue]

You want to see something spooky , compare the LGL and EQI charts together on one chart, they line up 90% each movement.

Not surprising if they also correlate with the price of gold.

Do they also line up with other gold producers, eg Newcrest?

 

[Sean K]

Having gone through EQI's last few anns and presentations I'm pretty happy with the deal. Low cost producer, prospective exploration, low hedging.

My only disappointment is that I've been hoping for a takeover for LGL at a whopping premium and then a bidding war. Less likely now perhaps? Or, with the diversification, does it make it tastier?

That bid 156K@4.45 can't be real can it?

 

[Sean K]

Like the growth story here:

DJ Equigold: Lihir Merger May Mean More Ivory Coast Acquisition

20/03/2008 10:07AM AEST

MELBOURNE (Dow Jones)--Lihir Gold Ltd.'s (LGL.AU) all-stock takeover of Equigold, worth about A$1.1 billion, provides the opportunity for more acquisitions near Equigold's Ivory Coast mine, Equigold Managing Director Mark Clark said Thursday.

There is "potential to provide more growth through mergers and acquisitions" in West Africa, Clark said in a presentation to discuss the takeover deal, which has been agreed to by Equigold's board. Equigold's Bonikro mine in Ivory Coast is due to start producing about 120,000 ounces of gold a year from July, Clark said.

I think I'm the only one here in this though, so I'm probably talking to myself. Sorry.

 

[grace]

Equigold was on my shopping list after I cleared out of Monarch. Should have shopped sooner.

Biggest thing is keeping the power up to those African mines these days!

I do like equigold though.

 

[oldblue]

Price movement correlation has been strong over last 3 months,

EQI +25%
LGL +30%
and NCM +20%

Not so strong over last 12 months!

EQI +180%
LGL +32%
and NCM + 80%



Disc: Don't hold any; wish I did!

 

[adobee]

Price movement correlation has been strong over last 3 months,

EQI +25%
LGL +30%
and NCM +20%

Not so strong over last 12 months!

EQI +180%
LGL +32%
and NCM + 80%



Disc: Don't hold any; wish I did!

I hold lots of them but seem to be loosing money today !!! I am happy to sell them to you at yesterdays price