A review of the resource model by Australia’s Lihir Gold (LIHRY-Q) at its namesake open pit gold mine on Lihir Island northeast of the Papua New Guinea mainland, has upped reserves by 25%.
Since the last model review in 2000, Lihir has sunk a total of 180 holes on the North East Minifie, Borefields/ROM zones and in the eastern half of the Lienetz deposit. The latest review does not include holes sunk on the northwest extension of Lienetz or those completed during the fourth quarter of 2001. It does include drilling on new mineralized extensions to the Lienetz and Borefields zones. The review is based on an assumed life-of-mine gold price of US$300 per ounce.
At the end of 2001, Lihir’s measured, indicated and inferred resources, including reserves, tallied to 353.8 million tonnes averaging 3.04 grams of gold per tonne or 34.6 million ounces of contained gold. Included are 120.8 million tonnes of proved and probable material. Proven reserves stood at 10.3 million tonnes grading 4.55 grams gold for 1.5 million contained ounces. Probable reserves amounted to 90.2 million tonnes running 4.05 grams gold for 11.8 million contained ounces. Another 20.4 million tonnes of stockpiled ore grades 2.87 grams gold for 1.9 million ounces of contained gold. All told reserves amount to 120.8 million tonnes of 3.9 grams gold or 15.1 million contained ounces.
At an assumed gold price of US$280 per oz., reserves slip 2.2% to 115.2 million tonnes running 4 grams gold or 14.8 million contained ounces.
Lihir currently estimates that it can recover about 13.6 million ounces or about 90% of the gold from the reserves.
Total resources in 2000 were pegged at 428.9 million tonnes of 2.69 grams (or 37.1 million ounces), including reserves of 108.8 million tonnes averaging 3.65 grams or 11.8 million contained ounces (based on a long-term gold price of US$300 per oz).
The latest reserve calculation employs a cutoff grade of 1.6 grams gold for the first 6.5 years of mining operations (until the end of 2003), and increases to 2.1 grams for the remainder of the mine’s life, which is slated to expire in 2014.
Lihir has begun engineering studies to test the economic potential of a substantial tonnage of indicated resource identified at a moderate depth in the Northern Lienetz area. Drilling is also ongoing on the central and western flanks of Lienetz. Drilling will also target areas to the west of Minifie.
A further reserve update, based on 38 holes sunk for 10,985 metres during the fourth quarter is planned for mid-2002.
During the fourth quarter of 2001, Lihir churned out 123,387 oz. of gold, bringing the year’s production to a record 647,942 oz. As expected, fourth quarter gold production suffered as a result of a two-week shutdown to facilitate the addition of two autocalve heat recovery units. Total cash costs were US$289 per oz. for the quarter and US$221 per oz. for the year.
The company realized an average of US$385 per oz. for its quarterly production and US$355 per oz. for the year.
During the quarter, Lihir placed 100,000 oz. of gold into its hedge book, with the majority of forwards dated in 2005 to 2006. At the end of 2001 the company hedge book amounted to 2.6 million ounces or about 17% of reserves. The hedge book’s mark-to-market value was US$59.7million in the good.
Lihir Island, a volcanic sea mount rising steeply to 600 metres above sea, measures about 22 km from north to south and stretches 14.5 km from east to west, at its widest points.
Situated on the east coast of the island, the Luise Caldera hosts all of the known ore deposits. Principal among the adjacent and partly overlapping mineral deposits are the Lienetz, Minifie, Coastal and Kapit deposits. The bulk of the known gold is found in Minifie and Lienetz.
Be the first to comment on "Lihir reserve up by 25%"