Lihir Gold Seeking to Sell $325 Million in Shares

By Jesse Riseborough

March 4 (Bloomberg) -- Lihir Gold Ltd., the second-largest producer on the Australian stock exchange, plans to sell $325 million in new stock to fund expansion of a plant in Papua New Guinea.

The Port Moresby-based company is seeking to sell about 171.7 million new shares, or 7.8 percent of the issued stock, from a floor price of A$3 each, according to a copy of the term sheet seen by Bloomberg News. That’s 9.4 percent lower than yesterday’s closing price of A$3.31, it said.

Chief Executive Officer Arthur Hood is targeting bullion output of more than 1 million ounces this year from its four mines in Papua New Guinea, Australia and Ivory Coast. The plant expansion will cost $700 million and may start to boost production from next year, Lihir said today.

The funds will also be used for other growth opportunities, including in West Africa, where Lihir mines in Ivory Coast, as well as “to provide continued financial strength and flexibility,” the company said.

Goldman Sachs JBWere Pty and Macquarie Capital Advisers Ltd. are advising Lihir on the share sale, according to the term sheet. The sale will close at 8:00 p.m. local time today and the shares are expected to resume trading tomorrow, it said.

Lihir is also being advised by Caliburn Partnership.

To contact the reporters on this story: Jesse Riseborough in Melbourne at jriseborough@bloomberg.net;