The Lihir gold operation, located in the New Ireland Province of Papua New Guinea (PNG), approximately 900 km north of Port Moresby, was commissioned in 1997 under the management of the Lihir Management Company, a subsidiary of Rio Tinto. This management period ended in 2005 with Lihir Gold Limited (LGL) becoming self-managed. LGL is now the largest listed company in PNG and a top tier mining company in Australia._x000D_
The focus of the operation since 2005 has been to take advantage of strong market conditions to increase cash flow while driving operating costs into the lowest quartile of gold producers. During this period production has increased through capital expansions, most notably with the addition of a flotation circuit, and through culture change and efficiency improvements._x000D_
The next step forward for the Lihir operation is a major plant upgrade to increase production to an average of around one million ounces per annum by matching the ore processing rate to the ore mining rate. The key benefits of this project will be the addition of approximately 240 000 ounces per annum of gold production, the access to an additional one million ounces of gold and the ability to meet all stockpiling requirements._x000D_
The Lihir operation has come out of the boom period in a strong position, is undertaking a major upgrade at a time when prices are low and labour is available, and will be positioned to take advantage of future opportunities as they arise.