Lihir Gold Swings to First-Half Loss on Mine Charge

By Jesse Riseborough

Aug. 26 (Bloomberg) -- Lihir Gold Ltd., the second-largest gold mining company on the Australian Stock Exchange, swung to a first-half loss after writing down the value of its Ballarat mine in Victoria state.

Lihir had a net loss of $301 million, or 12.7 cents a share, in the six months ended June 30, compared with profit of $36.5 million, or 1.8 cents, a year earlier, the Port Moresby-based company said today in a statement. Underlying profit more than doubled to a record $154.9 million, the company said.

Chief Executive Officer Arthur Hood booked a $409 million one-time charge on the Ballarat mine after a review last month indicated the operation couldn’t support bulk production. Total gold sales in the half rose 97 percent to $564 million after bullion output almost doubled.

“The Ballarat outcome has certainly been a disappointment for the company and for shareholders,” Hood said in the statement. “Despite this set back, Lihir remains financially sound.”

Lihir rose 5.9 percent to A$2.71 at 10:52 a.m. Sydney time. The stock has dropped 10 percent this year, compared with a gain of 19 percent on the benchmark S&P/ASX 200 Index.

The company produced a record 612,022 ounces of gold in the half and reaffirmed today a full-year forecast of between 1 million and 1.2 million ounces.

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