Vengold increases interest in Lihir

Vengold (VEN-T) has increased its interest in the Lihir gold project in Papua New Guinea to 7.1% from 5.7%.

Under an arrangement with National Provident Fund, one of Papua New Guinea’s leading financial institutions and an initial investor in the project, Vengold exchanged 13.2 million of its shares for 11.5 million shares of Lihir Gold.

Plant commissioning has also begun at the US$780-Million project. Primary crushers are treating some 4.7 million tonnes of oxide ore, which have been mined since the beginning of the year. The first gold pour is expected in May, and full production from sulphide ore is slated to begin in October.

Total gold production for the year is forecast at 175,000 oz., of which 150,000 oz. have been sold forward at US$406 per oz.

Lihir is owned 30% by the Papua New Guinea government, 30% by Nuigini Mining, and 30% by Kennecott, a wholly owned subsidiary of RTZ-CRA (RTZ-N). Nuigini is owned 51% by Battle Mountain Gold (BMG-N).

The mine, situated on the tiny island of the same name, is expected to produce more than 550,000 oz. in 1998. Minable reserves stand at 104 million tonnes grading 4.4 grams gold, based on a cutoff grade of 2 grams.