Not much movement in the share price of Lihir Gold yesterday, despite another encouraging quarterly production report.
The shares rose 3c to $3.02 after the company said annual gold production will be in line with previous guidance.
The company confirmed earlier production guidance of 1.04 million ounces to 1.2 million ounces for the full year, with total cash costs kept below $US400.
Lihir said yesterday it produced 318,000 ounces of gold in the first quarter of fiscal 2009 with the Lihir Island mine in Papua New Guinea maintaining earlier production levels while its Bonikro mine in Ivory Coast, in West Africa increased production by 9% to 40,000 ounces.
Lihir said there was a "Strong performance from Lihir Island maintaining the record production levels achieved in the fourth quarter 2008".
Lihir said its cash costs were $US329 per ounce and average realised price was $US876.
Lihir managing director Arthur Hood said Lihir’s full year production guidance was being maintained, including 770,000 – 840,000 oz from Lihir Island, approximately 130,000 – 160,000 oz from Bonikro, and 90,000-100,000 oz from Mt Rawdon in Queensland.
But he said that production of up to 50,000 ounces from Ballarat in Victoria would dependent on "the development of effective mining techniques in the central and southern zones and accessing commercial quantities of ore in the northern zone by the end of this year".
"The ongoing review at Ballarat will be more clearly defined later in the year."
Mr Hood said unit costs were forecast to remain below $US400 per ounce for the year with lower industry cost pressures, weaker oil prices and a softer Australian dollar contributing to lower costs.
"Overall, the company is in very good shape to continue to grow its current asset base and I look forward to reporting further good progress during the year," he said.
Lihir said its operating margins increased in the quarter, continuing a trend over the past 12 months.
Gold sales totalled 292,000 ounces at an average realised cash price of $876/oz, up from $792/oz in the three months to December, the company said.
Excluding Ballarat, gross cash costs for the quarter were $379/oz, expanding cash margins by 28% to $497/oz.
Unit costs for all operations outside Ballarat were "well below $400/oz" for the quarter, with group total cash costs of $329/oz, down 7% from $353/oz in the prior quarter.
The stronger US dollar against the Australian dollar and the PNG Kina also contributed to reduced costs, as did the lower oil price, Lihir said.
Still in the resources sector and bauxite miner and refiner, Alumina Ltd is looking for a minimum of $644 million in new capital to get it through the resources slump.
Shares in Alumina went into a trading halt yesterday after revealing the announcement.
The company is planning a seven-for-ten non-renounceable entitlement offer of shares at $1 each, through UBS and Macquarie Group.
The proceeds are expected to be used to repay bank debt.
It’s the second time since last August that Alumina has asked the market for money: It raised $910 million in August 2008 at $3 a share. Big losses for some holders.
Alumina yesterday requested the trading halt until the announcement is made or market trading resumes on May 4. The shares last traded at $1.49, so the discount is close to a third.
"Alumina Limited (“Alumina”) today announced that it will raise a minimum of $644 million through a 7 for 10 accelerated non-renounceable pro rata entitlement offer (the “Entitlement Offer”) at an Offer Price of $1.00 per share.
“The funds raised under the Entitlement Offer will be applied by Alumina to repay bank debt and to reinforce its balance sheet," AWC said in the statement to the ASX.
The Institutional Entitlement Offer is being fully underwritten by Macquarie Capital Advisers Limited and UBS AG, Australia Branch (“Joint Lead Managers”).
Alumina Limited’s CEO, John Bevan commented, “The equity raising will strengthen our balance sheet and effectively remove 2010 debt refinancing risk.
"We have great confidence in the resilience of the AWAC assets but we can’t predict when debt and commodity markets will improve and it is prudent to act now to secure funding to support the value of Alumina’s assets for our shareholders.
"We have also rolled over US$100 million of debt facilities that were previously due to mature in 2010, until April 2012, which will take effect following the completion of the Entitlement Offer.
"This equity raising and rollover, combined with the resilience of our operations and the headroom we retain within our existing debt facilities, ensures Alumina is in a strong position to withstand the current volatile market conditions."
Drug distributor and retailer Australian Pharmaceutical Industries posted an 8.7% rise in net profit for six months to February, but has again decided not to pay a dividend to shareholders.
Net earnings were $6.7 million, up from $6.15 million and in line with guidance from the company, but API declined to issue guidance for the remainder of the year.
The shares edged up 1c to 51c in ASX trading yesterday.
API said sales grew 8.1% to $1.7 billion.
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