Lihir dumps Ballarat for just $4.5m
March 5, 2010
Lihir Gold Limited (LGL) said it reached an agreement to off-load its ill-fated Ballarat gold project in Victoria to Castlemaine Goldfields in Victoria. Under the agreement, Lihir said it would receive $4.5 million in cash in addition to a 2.5% royalty interest in future production, capped at $50 million.
At its most recent earnings release, the company took a one-off charge of $413 million after-tax, being the impairment charge and operating losses from the discontinued Ballarat operation. Lihir purchased the mine in October 2006 in a $350 million scrip deal from Ballarat Goldfields.
The disastrous Ballarat investment is also widely suspected to be the reason for the CEO, Arthur Hood, stepping down in January.
The sale is subject to certain conditions including Castlemaine shareholders approving the issue of new equity to raise a minimum of $20 million.
Castlemaine said it would carry the project forward as exploration only, mothballing equipment there.
At 1108 AEDT, Lihir Gold shares were down 1c to $2.93.
At its most recent earnings release, the company took a one-off charge of $413 million after-tax, being the impairment charge and operating losses from the discontinued Ballarat operation. Lihir purchased the mine in October 2006 in a $350 million scrip deal from Ballarat Goldfields.
The disastrous Ballarat investment is also widely suspected to be the reason for the CEO, Arthur Hood, stepping down in January.
The sale is subject to certain conditions including Castlemaine shareholders approving the issue of new equity to raise a minimum of $20 million.
Castlemaine said it would carry the project forward as exploration only, mothballing equipment there.
At 1108 AEDT, Lihir Gold shares were down 1c to $2.93.
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