Miner turns in solid-gold result, despite a year of big spending

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Miner turns in solid-gold result, despite a year of big spending

By Mathew Murphy

HIGH gold prices have helped Lihir Gold turn a $US300.9 million loss into a $US87.1 million ($A98.1 million) profit for the first half of the year in what will be its swansong result before its $9.5 billion merger with Newcrest Mining takes effect on Monday.

Outgoing managing director Graeme Hunt, who started in the job only in April, said solid gold production, in line with expectations, had helped deliver the result.

However, a combination of merger costs and a $4.7 million golden handshake to former chief executive Arthur Hood resulted in a 15 per cent drop in underlying profit from $168 million in the first half of last year to $142.5 million a year later.

Lihir retained its production guidance for the full year of 1-1.1 million ounces of gold. Cash costs were relatively low at $US489 an ounce and are expected to fall further, to below $US450 an ounce for the full year.

The results came as Lihir and Newcrest received approval for its merger from the National Court of Papua New Guinea.

Newcrest chief executive Ian Smith will map out the path for the newly merged entity on Monday as the scheme takes effect and Lihir shares are suspended from the Australian Securities Exchange.

Lihir will not provide shareholders with an interim dividend but Newcrest has said that shareholders that take up its shares under the scheme will be entitled to the final Newcrest dividend of 20¢ a share declared for the year ended June 30. The dividend will be payable on October 22.

Mr Hunt said the beefed-up Newcrest would ''create a strong and vibrant new major gold company with a first-class portfolio of producing mines, and an exciting growth profile.

''The combined company has an excellent future and promises to deliver strong returns to shareholders,'' he said.

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