LGL - Lihir Gold

[Prospector]

One day, I will buy a share that stays as I have purchased it. So another of my two shares merge! I guess it doesnt really matter to me if it is a good deal or not, does it!

 

[VViCKiD]

This merger has really devalued my lgl stocks ... Does this huge price drop indicate that the market is not pleased with this merger?

 

[Goldmann]

Maybe.. dont forget Gold had dropped close to 10% at noon...!!! all gold stocks are being torched... Newcrest down 12%!!!...

Still a correction was neccesary, and predicted by most things I read.

 

[reece55]

This merger has really devalued my lgl stocks ... Does this huge price drop indicate that the market is not pleased with this merger?

No, every commodity stock is going down today.. Have a look at the price of gold, it has made a fairly substantial retracement in the last couple of days. US gold stocks were down similar amounts last night....

Cheers

 

[So_Cynical]

I'm not sure what to make of the take over/merger didn't see it coming at all.. still LGL really
needed to get out of the 1 mine company thing and theres limited local choice so EQI is the
best of a bad bunch...AND would of been a better choice.

Anyway people its, Côte d'Ivoire not Ivory coast...OK.

PNG is less politically risky than Côte d'Ivoire IMHO.

http://en.wikipedia.org/wiki/Côte_d'Ivoire

 

[eddyeagle]

LGL is one I have had on my watchlist for ages, but the lack of mine diversification and history of dissapointing announcements has kept me from buying in and instead i have opted for other gold stocks.

Surely, this takeover is a good thing as it increases mine diversification and reduces the risk. Today's 11% price drop (related to today's sharp gold price drop) also makes this stock look more attractive!

A double bonus IMO!

 

[AnDy62]

My thinking too Eddy, this correction in gold is just that a correction. The fundamental reasons for gold rising have not been altered by a o.75% cut compared to a 1% cut by the Fed. Surely this would be a good buying opportunity? Thoughts folks?

 

[explod]

My thinking too Eddy, this correction in gold is just that a correction. The fundamental reasons for gold rising have not been altered by a o.75% cut compared to a 1% cut by the Fed. Surely this would be a good buying opportunity? Thoughts folks?

Absolutely. No one can pick a bottom or a top but gold is going up in the bigger picture and LGL is fast becoming a huge producer. I think the increased gramms per ton to come out of Lihir Island (from the last report) has gone over most analysts heads.

Thier reports are not loaded and ramped like a lot of others, I still dont' like the volcanic site but I think my concerns of soveriegn risk have abated since Rudd improved relations with PNG

 

[adobee]

Whats the storey behind the big volume daily on LGL is this stock preferred by alot of traders, do people trade in an out dependent on the gold price ?

 

[Egabeava]

Link to a Hot Stock report, good review on the reason to merge with Equigold http://www.theage.com.au/news/money/hot-stock/2008/03/31/1206850806208.html

 

[Sean K]

Link to a Hot Stock report, good review on the reason to merge with Equigold http://www.theage.com.au/news/money/hot-stock/2008/03/31/1206850806208.html

Thanks Beava, nice to see something positive on the merger, even if it is from a Fat Profits analyst, who seem to be a good contraindicator at the moment.

I think if the Bonikro project comes in on time and delivers the ounces forecast it will be a big positive for the merged entity. However, I think the real upside value will be in the exploration potential in Côte d'Ivoire. LGL have had very limited exploration potential to date and simply relied on expanding Lihir.

From their website:

Equigold has granted permits covering 6,300 square kilometers of prospective Birrimian greenstone belts. This equates to approximately 460 kilometres of strike extent of greenstone belts that have received minimal modern exploration. The greenstone belts in Ivory Coast are similar to or extensions of belts that have demonstrated gold abundances in the surrounding countries of Ghana, Mali, Burkina Faso, Niger and Guinea. This West African geological setting has yielded numerous significant gold discoveries in the above countries and in Ivory Coast over recent years.

In addition to the above licenses, Equigold has a further 10 permit areas under application at 30 June 2007. These tenements and cover 8,300 square kilometres and when granted will take Equigold’s permit area to a massive 15,000 square kilometres, covering approximately 780 kilometres of prospective strike. The Company considers these ground holdings to provide an excellent opportunity to discover further significant gold deposits. The Company is aggressively exploring this licence package, with a significant budget allocated to both regional and resource definition exploration work in the coming years. Equigold now has exclusive use of four drill rigs in Ivory Coast, two RAB rigs, an RC rig and a diamond rig. These rigs enable the Company to drill in excess of 100,000 metres of drilling per annum.

Exploration efforts during the year have continued to reinforce the Board’s view that the broader Bonikro area (the area within a 25 kilometre radius of Bonikro) has the potential to ultimately yield a mineable gold portfolio of between 2.5 to 3.0 million ounces. Exploration efforts around the Bonikro Gold Project are focused on building resources towards this target to augment the first stage project already under construction and due for first gold production in April 2008.

Wonder what the new name will be? I think they should change it to reflect the diversity of the company now. Could be anything really.

 

[Sean K]

When will this discussion stop, and NCM finally circum to the most obvious corporate play in the market?

0850 [Dow Jones] Newcrest Mining (NCM.AU) could raise between A$320 million and A$350 million from the sale of its Cracow gold mine, Credit Suisse says. Says the consideration is likely to be cash and that Newcrest will not proceed with a sale unless it is value-accretive. Says Newcrest needs to manage a disproportionate growth in its copper earnings relative to gold earnings in the future. "An acquisition by NCM of Lihir Gold (LGL.AU) would rebalance NCM's copper to gold inventory and largely alleviate NCM's medium-term copper production growth dilution issue," CS says. Maintains Outperform rating with A$45 target price. (APW)

Come on NCM. Please....

 

[eddyeagle]

Massive spike in volume today on LGL - 1.281 bil shares traded! Can anyone explain this? Anything to do with a takeover?

 

[Sean K]

Massive spike in volume today on LGL - 1.281 bil shares traded! Can anyone explain this? Anything to do with a takeover?

Very unusual eddy. Must be an error. That's half it's market cap isn't it? Can't think of any reason. If it was a big buyer, on market, it would have reflected in an sp jump as well I think.

 

[doctorj]

Very unusual eddy. Must be an error.

My data makes volume out to be 12,808,381 shares traded. It's probably worth checking with your provider.

 

[Sean K]

My data makes volume out to be 12,808,381 shares traded. It's probably worth checking with your provider.

3.15am ??? Big night? LOL

I have 1.2b ish on two seperate providers.

Big Charts and Interactive Charts.

 

[doctorj]

I have 1.2b ish on two seperate providers.

Big Charts and Interactive Charts.

I just cross checked against ASX.com.au and that gives 12,808,381 as well.

Is it possible Big Charts and Interactive Charts get their data from the same place?

 

[explod]

In spite of all the above LGL had portfolio crossing trades, of I think to a total volume of about 11 million shares which occured at 5.30pm last night. Could that just be paper shuffling by a large holder, or other??????

 

[eddyeagle]

The volume spike must be some kind of error, all my holdings have a massive spike in volume for the day!

 

[Sean K]

Been hammered since gold peaked and the merger was announced.

Lots of support here between 2.75 and 3.25. Should hold unless all the factors contributing to gold rise the past few years turn around. Maybe they can? Could be considered a nasty double top there too... eeek

Latest news on the merger:

Equigold, Lihir move forward on merger
10/04/2008 By: John Winters

Equigold NL (EQI) and Lihir Gold Limited (LGL) said a draft scheme booklet had been lodged for review with the Australian Securities and Investments Commission (ASIC) over the proposed merger of the two companies. Upon completion of the ASIC review, Equigold would be able to apply for a shareholder meeting to approve the scheme.

Equigold and Lihir said they both maintain strong and unanimous support for the merger and said the companies were working together very closely to implement the scheme.

Last month, the two companies announced they would merge through a scheme of arrangement to form a $9 billion business.

The combined group would have assets in Australia, West Africa and Papua New Guinea, producing in excess of 1.2 million ounces of gold a year from 2009.

“Equigold directors intend to vote all of the shares that they hold (or which are held on their behalf) in favour of the merger, in the absence of a superior proposal,” the groups announced in a statement.

“There has been strong shareholder support for the merger and Equigold and LGL look forward to implementing the scheme and delivering on the many benefits the combination will deliver for shareholders of both companies.”

The Equigold shareholder meeting is expected to be held in late May/early June 2008.