Table of Contents
SECURITIES AND EXCHANGE COMMISSION
o | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Cnr Champion Parade and Musgrave Street
Port Moresby, NCD, Papua New Guinea
Mr Stuart MacKenzie
0011 617 3318 3300
Stuart.MacKenzie@LGLgold.com
Level 9, 500 Queen Street,
Brisbane,
Queensland, Australia 4000
Lihir Gold Limited Ordinary Shares of no par value | NASDAQ Global Market* | |
American Depositary Shares, each of which represents ten Lihir Gold Limited Ordinary Shares and which are evidenced by American Depositary Receipts | NASDAQ Global Market |
Lihir Gold Limited Ordinary Shares of no par value: | 2,368,729,935 (including 1,046,662 Restricted Executive Shares) | |
Lihir Gold Limited Treasury “B” Shares | 161,527,405 |
o | U.S. GAAP | |
þ | International Financial Reporting Standards as issued by the International Accounting Standards Board | |
o | Other |
Table of Contents
4 | ||||
6 | ||||
7 | ||||
7 | ||||
8 | ||||
9 | ||||
9 | ||||
11 | ||||
12 | ||||
13 | ||||
27 | ||||
27 | ||||
31 | ||||
56 | ||||
57 | ||||
78 | ||||
79 | ||||
79 | ||||
94 | ||||
96 | ||||
97 | ||||
99 | ||||
100 | ||||
101 | ||||
102 | ||||
102 | ||||
105 | ||||
115 | ||||
122 | ||||
123 | ||||
124 | ||||
124 | ||||
126 | ||||
126 | ||||
127 | ||||
127 | ||||
128 | ||||
129 | ||||
129 | ||||
131 | ||||
131 | ||||
131 | ||||
136 | ||||
141 | ||||
142 | ||||
145 | ||||
145 | ||||
145 | ||||
145 | ||||
146 | ||||
146 | ||||
146 |
2
Table of Contents
146 | ||||||||
147 | ||||||||
147 | ||||||||
147 | ||||||||
147 | ||||||||
147 | ||||||||
147 | ||||||||
148 | ||||||||
148 | ||||||||
149 | ||||||||
149 | ||||||||
153 | ||||||||
154 | ||||||||
154 | ||||||||
154 | ||||||||
154 | ||||||||
155 | ||||||||
156 | ||||||||
161 | ||||||||
162 | ||||||||
164 | ||||||||
EX-4.AK | ||||||||
EX-4.AL | ||||||||
EX-4.AM | ||||||||
EX-4.AN | ||||||||
EX-4.AO | ||||||||
EX-4.AP | ||||||||
EX-8 | ||||||||
EX-12.A | ||||||||
EX-12.B | ||||||||
EX-13.A | ||||||||
EX-13.B |
3
Table of Contents
4
Table of Contents
5
Table of Contents
6
Table of Contents
Table of Contents
Table of Contents
A. | Selected Financial Data |
Year ended December 31, | ||||||||||||||||||||
(In $ millions, except where indicated) | ||||||||||||||||||||
2008 | 2007# | 2006* | 2005* | 2004* | ||||||||||||||||
Amounts calculated in accordance with IFRS: | ||||||||||||||||||||
Statements of Comprehensive Income data: | ||||||||||||||||||||
Revenue(1) | 755.6 | 498.4 | 386.0 | 263.9 | 246.1 | |||||||||||||||
Operating profit before other income/(expense)(2) | 261.3 | 195.9 | 156.2 | 59.7 | 27.1 | |||||||||||||||
Net profit / (loss) after tax(3) | 110.2 | (24.1 | ) | 54.9 | 6.1 | 339.2 | ||||||||||||||
Earnings ($) per share, basic and diluted(4) | 0.053 | (0.014 | ) | 0.042 | 0.005 | 0.264 | ||||||||||||||
Cash dividends ($) per ordinary share | — | — | — | — | — | |||||||||||||||
Number of ordinary shares (millions)(5) | 2,187.1 | 1,903.9 | 1,284.2 | 1,284.2 | 1,284.2 | |||||||||||||||
Statements of Financial Position data(7): | ||||||||||||||||||||
Total assets | 3,363.8 | 2,304.3 | 1,503.4 | 1,325.7 | 1,166.9 | |||||||||||||||
Cash and current receivables held | 85.7 | 189.1 | 51.6 | 133.2 | 88.7 | |||||||||||||||
Current liabilities | 165.2 | 77.8 | 177.3 | 80.8 | 104.3 | |||||||||||||||
Long term obligations | 271.1 | 58.0 | 506.8 | 455.1 | 215.4 | |||||||||||||||
Total shareholders’ equity(6) | 2,927.5 | 2,168.5 | 819.3 | 789.8 | 847.2 | |||||||||||||||
Paid up capital(7) | 3,080.0 | 2,319.7 | 1,027.1 | 1,027.5 | 1,027.5 | |||||||||||||||
Expenditure and Financing data: | ||||||||||||||||||||
Net cash flow from operating activities | 212.4 | (270.0 | ) | 57.3 | (54.5 | ) | 30.3 | |||||||||||||
Net cash flow from investing activities | (270.9 | ) | (178.6 | ) | (203.3 | ) | (99.0 | ) | (87.6 | ) | ||||||||||
Financing activities: | ||||||||||||||||||||
Issuance of ordinary shares | — | 977.4 | — | — | 2.2 | |||||||||||||||
Drawdown of term debt | — | 22.4 | 65.6 | 245.5 | — | |||||||||||||||
Repayment of loans | (0.4 | ) | (421.6 | ) | — | (49.5 | ) | (14.0 | ) | |||||||||||
Dividend paid | — | — | — | — | — | |||||||||||||||
Advance to subsidiaries pre-acquisition | (49.7 | ) | ||||||||||||||||||
Purchase of treasury shares | (0.9 | ) | (1.3 | ) | (0.4 | ) | — | — | ||||||||||||
Net cash flow from financing activities | (51.0 | ) | 576.9 | 65.2 | 139.6 | (11.8 | ) |
(1) | Alternative terminology: “net sales” or “operating revenues”. | |
(2) | Alternative terminology: “income/(loss) from operations” or “income/(loss) from continuing operations”. | |
(3) | Alternative terminology: “Net income/(loss)” since the Company has no discontinued operations |
9
Table of Contents
(4) | Alternative terminology: “net income/(loss) from operations per share” or “income/(loss) from continuing operations per share”. | |
(5) | As adjusted to reflect changes in capital. | |
(6) | Alternative terminology: “net assets”. | |
(7) | Alternative terminology: “capital stock”. | |
* | Revised as follows: | |
a) | A revision of deferred tax balances was undertaken in Lihir Gold Limited which was attributable to the Lihir Island operation and was made to reconcile the previously reported tax balances to amendments sought for various income tax returns for the periods 1998-2004. The effect of this revision for each relevant year was: an increase of $10 million in deferred tax benefit in 2004, a decrease in deferred tax benefit of $3.7 million in 2005, an increase in deferred tax benefit of $1.1 million in 2006, an increase of $1.8 million in deferred tax benefit in the year ended 31 December 2007, an increase of $7.4 million in opening retained earnings at 1 January 2007 and an increase of $9.2 million in deferred tax assets. | |
# b) | Deferred income tax expense increased by $1.8 million to reflect an accounting adjustment in relation to opening deferred tax adjustments in Ballarat Goldfields NL. | |
# c) | Finalisation of the Ballarat business combination and subsequent adjustments to the provisional accounting values as illustrated in Note 30(b) and translation of these final adjustments to the closing $US rate at 31 December 2007. |
10
Table of Contents
Table of Contents
Table of Contents
D. | Risk Factors |
(1) | The Company is dependent on production from Lihir Island |
13
Table of Contents
(2) | The Company’s operations may be adversely affected by difficult geological conditions | |
(a) | Hydrological and geothermal risks |
(b) | Earthquake seismic activity risks |
14
Table of Contents
(c) | Landslide risks |
• | extension of the North Kapit Stockpile; | |
• | higher than long term average rainfall over the previous six months prior to the landslide; and | |
• | a magnitude 7.7 earthquake on September 9, 2005. |
• | flow of water into tension cracks and blockage of subsurface drainage; | |
• | geothermal activity; and | |
• | loss of side restraint and extension upslope. |
(d) | Unstable ground conditions |
(3) | The Company’s business is subject to construction, commissioning and other operational risks |
15
Table of Contents
(4) | The Company’s results are dependent upon gold prices determined by the market |
16
Table of Contents
Price in $ Per Ounce of Gold | ||||||||||||
Year | High | Low | Average | |||||||||
1988 | 484 | 395 | 437 | |||||||||
1989 | 416 | 356 | 381 | |||||||||
1990 | 424 | 346 | 384 | |||||||||
1991 | 403 | 344 | 362 | |||||||||
1992 | 360 | 330 | 344 | |||||||||
1993 | 406 | 326 | 360 | |||||||||
1994 | 396 | 370 | 384 | |||||||||
1995 | 396 | 372 | 384 | |||||||||
1996 | 415 | 367 | 397 | |||||||||
1997 | 366 | 283 | 331 | |||||||||
1998 | 313 | 273 | 294 | |||||||||
1999 | 326 | 253 | 279 | |||||||||
2000 | 313 | 264 | 279 | |||||||||
2001 | 293 | 256 | 271 | |||||||||
2002 | 349 | 278 | 310 | |||||||||
2003 | 416 | 319 | 363 | |||||||||
2004 | 454 | 375 | 409 | |||||||||
2005 | 537 | 411 | 445 | |||||||||
2006 | 725 | 525 | 603 | |||||||||
2007 | 841 | 608 | 695 | |||||||||
2008 | 1,011 | 712 | 872 | |||||||||
2009 (to 29 May) | 989 | 810 | 909 |
(5) | The Company’s insurance may not address all operating risks |
(6) | The Company is subject to political risks |
(a) | Lihir operation |
17
Table of Contents
(b) | Bonikro operation |
(7) | The Company is vulnerable to civil unrest, adverse community relations and land owner compensation issues. |
(a) | Lihir operation | |
(i) | Civil unrest |
(ii) | Community relations |
(iii) | Landowner compensation issues |
18
Table of Contents
(b) | Bonikro operation | |
(i) | Civil unrest |
(ii) | Community relations |
(iii) | Landowner compensation issues |
(c) | Ballarat operation |
(8) | The Company’s prospects are partly dependant on reserve estimates and future experience |
19
Table of Contents
(a) | Ballarat operation is exposed to exploration and development risk |
• | establish the presence, and to quantify the extent and grades (metal content), of mineralized material through drilling; | |
• | determine appropriate metallurgical recovery processes to extract gold from the ore; | |
• | estimate ore reserves; or | |
• | construct, maintain, upgrade or expand mine and processing facilities. |
20
Table of Contents
(9) | The Company is subject to strikes, work slowdowns and other industrial relations risk |
(a) | Lihir operation |
(b) | Bonikro operation |
(c) | Ballarat operation |
(d) | Mt Rawdon operation |
(10) | The Company cannot guarantee it can obtain all the mining and processing inputs required for its operations, including staff |
21
Table of Contents
(11) | The Company is subject to fluctuations in oil prices |
(12) | The Company has limited financial resources |
(13) | The Company’s operations are subject to environmental risks |
(a) | Lihir operation |
(b) | Ballarat operation |
22
Table of Contents
(c) | Mt Rawdon operation |
(d) | Bonikro operation |
(14) | The Company’s mining and exploration rights may be suspended or terminated |
(a) | Lihir operation |
23
Table of Contents
(b) | Bonikro operation |
(c) | Ballarat operation |
(d) | Mt Rawdon operation |
(e) | Côte d’Ivoire |
(15) | The PNG government may not grant the necessary permits to enable the MOPU Project to be completed |
(16) | The Company is vulnerable to currency risks and foreign exchange controls |
24
Table of Contents
(17) | The Company’s dividends to U.S. shareholders are subject to withholding tax |
(18) | The Company’s shareholders are subject to different rights under certain circumstances |
(19) | Difficulty may be experienced in the pursuit of litigation against the Company or its executive officers or directors who are not resident in the United States |
• | the presence of the person to be served within the jurisdiction of the relevant court; or | |
• | the consent of that person to receive service outside the jurisdiction. |
25
Table of Contents
26
Table of Contents
• | Australian Securities Exchange Limited (“ASX”); | |
• | Port Moresby Stock Exchange (“POMSOX”); | |
• | Toronto Stock Exchange (“TSX”); and | |
• | National Association of Security Dealers Automated Quotations (“NASDAQ”). |
• | the Ballarat operation in the State of Victoria in Australia; | |
• | the Bonikro operation in Côte d’Ivoire in West Africa; and | |
• | the Mount Rawdon operation in the State of Queensland in Australia. |
27
Table of Contents
• | representation and liaison services; | |
• | banking and credit arrangements; | |
• | procurement of goods and services; | |
• | recruitment; | |
• | marketing of products; | |
• | tax returns; and | |
• | strategic services. |
28
Table of Contents
(in US$ millions) | 2008 | 2007 | 2006 | |||||||||
Lihir | 153.0 | 156.5 | 185.9 | |||||||||
Ballarat | 118.6 | 65.9 | — | |||||||||
Bonikro | 27.6 | — | — | |||||||||
Côte d’Ivoire exploration | 2.3 | — | — | |||||||||
Mount Rawdon | 1.3 | — | — | |||||||||
Corporate | 1.3 | 0.3 | 1.8 | |||||||||
304.1 | 222.7 | 187.7 | ||||||||||
(a) | $50.6 million for the MOPU Project; | ||
(b) | $102.4 million for other sustaining capital expenditure at the Lihir operation; | ||
(c) | $118.6 million for Ballarat operation’s infrastructure and capitalized development costs (refer Note 1(v) of the financial statements); | ||
(d) | $27.6 million for construction and commissioning of the Bonikro operation; | ||
(e) | $2.3 million for expenditure in further defining existing reserves in Côte d’Ivoire (refer Note 1 (iv) of the financial statements); and | ||
(f) | $1.3 million for each of the Mount Rawdon operation and the Brisbane corporate office. |
(a) | Lihir Island ($82.4 million for the MOPU Project and $4.9 million for other equipment purchases); | ||
(b) | Ballarat ($4.9 million water purification plant and tailings storage upgrade and $1.2 million other equipment purchases); and | ||
(c) | Bonikro ($2.8 million dump trucks and other equipment). |
29
Table of Contents
30
Table of Contents
B. | Business Overview |
(a) | Lihir Operation | |
(1) | Overview |
31
Table of Contents
(2) | Mining | |
(A) | General |
2008 | 2007 | 2006 | ||||||||||
High-grade sulphide ore (K tonnes) | 6,204 | 6,111 | 4,204 | |||||||||
High-grade sulphide ore (g/t Au) | 4.98 | 5.14 | 5.51 | |||||||||
Low-grade sulphide ore (K tonnes) | 8,335 | 4,380 | 3,751 | |||||||||
Low-grade sulphide ore grade (g/t Au) | 2.22 | 2.32 | 2.27 | |||||||||
Total Ore (K tonnes) | 14,539 | 10,491 | 7,955 | |||||||||
Total Ore grade (g/t Au) | 3.4 | 3.96 | 3.98 | |||||||||
Total Waste (K tonnes) | 36,120 | 47,769 | 48,195 | |||||||||
Total Material (K tonnes) | 50,660 | 58,260 | 56,150 |
32
Table of Contents
(B) | Pit Design and Planning |
(C) | Production Scheduling |
(D) | Mill Throughput |
33
Table of Contents
30 deg. C feed temperature pre heat recovery
90 deg. C max feed temperature post heat recovery
Oxygen utilisation = 90%
Quench water added to compartments 1a, 1b and 1c = 7 m3/h/autoclave
34
Table of Contents
(E) | Metallurgical Recovery |
The planned metallurgical recovery is determined from current historical operating experience and realistically expected future plant performance. It has been shown to be a logarithmic average by all material types that varies with gold grade. Reviews undertaken on stockpile material conclude that for lower grade ores the existing logarithmic recovery function is reasonably justified for estimating Ore Reserves under current and future plant operating conditions. However, test work is being undertaken to further evaluate the varying recovery relationships by material type including stockpile material. |
This relationship is described by: |
(F) | Sulphide Content |
(G) | Economic Grade Ore Stockpiles |
(H) | Waste Rock Disposal |
35
Table of Contents
(I) | Blasting |
(J) | Mine Drainage |
(K) | Mining Equipment |
(3) | Processing |
(A) | General |
36
Table of Contents
(B) | Crushing |
(C) | Stockpiling and Blending |
(D) | Grinding and Thickening |
37
Table of Contents
(E) | Pressure Oxidation |
(F) | Energy |
(G) | CCD Washing and Neutralization |
38
Table of Contents
(H) | CIL Processing |
(I) | Gold Recovery |
(J) | Tailings Disposal |
(K) | Economic Grade Ores |
• | The heat recovery circuit commissioned in the third quarter of 2001 enables the pressure oxidation circuit to treat a lower grade of sulphide in ore feed. | |
• | Flotation plant capacity provides an opportunity to increase the sulphide grade of stockpile ore. | |
• | Blending of stockpile ores combined with operation of the flotation circuit will enable feeding of the autoclave circuit at the optimum sulphur level. |
39
Table of Contents
(L) | Limestone Deposits |
(M) | MOPU Project |
(N) | Processing Period after 2022 |
(4) | Infrastructure |
40
Table of Contents
(5) | Logistics |
(6) | Personnel |
(A) | Workforce |
(B) | Occupational Health and Safety |
(C) | Safety Performance |
41
Table of Contents
1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | ||||||||||||||||||||||||||||||||||
LTI | 12 | 11 | 11 | 16 | 11 | 12 | 13 | 12 | 5 | 2 | 3 | |||||||||||||||||||||||||||||||||
LTIFR | 2.05 | 1.70 | 1.75 | 2.30 | 1.80 | 1.50 | 1.50 | 1.53 | 0.53 | 0.18 | 0.26 |
(7) | Community Affairs |
(A) | The Original Integrated Benefits Package (IBP) |
42
Table of Contents
(B) | The revised IBP — Lihir Sustainable Development Plan (LSDP) |
(C) | Equity Participation |
43
Table of Contents
2008 | 2007 | 2006 | ||||||||||
Kina millions | 66.5 | 55.4 | 42.1 | |||||||||
$ millions equivalent | 26.2 | 20.9 | 14.8 |
(D) | Business Development |
(E) | Education Assistance |
44
Table of Contents
(F) | Security |
(G) | Community Health |
(b) | Ballarat Operation |
(1) | Overview |
45
Table of Contents
(2) | Mining | |
(A) | General |
2008 | 2007 | 2006 | ||||||||||
Development (m) | 6,093 | 3,819 | 2,890 | |||||||||
Total Ore (tonnes) | 129,282 | 24,998 | 20,897 | |||||||||
Total Ore (g Au/t) | 3.5 | 3.3 | 3.3 | |||||||||
Total Waste (tonnes) | 296,287 | 217,300 | 191,463 | |||||||||
Total Material (tonnes) | 425,569 | 242,298 | 212,360 |
(B) | Underground Mine Design and Planning |
46
Table of Contents
(C) | Production Scheduling |
(D) | Waste Rock Disposal |
(E) | Mine Dewatering |
(F) | Ventilation |
(3) | Processing | |
(A) | General |
47
Table of Contents
(B) | Crushing |
(C) | Gravity Circuit |
48
Table of Contents
(D) | Concentrate Leaching |
(E) | Gold Room |
(F) | Tailings Storage Facility. |
(4) | Infrastructure |
49
Table of Contents
(5) | Logistics |
(6) | Community Affairs & Management Systems |
(c) | Mount Rawdon Operation |
(1) | Overview |
(2) | Mining | |
(A) | General |
50
Table of Contents
(B) | Pit Design and Planning |
• | mill feed requirements and capacities; | |
• | stripping requirements for the cutback stages; | |
• | loading rates constraints, where only two excavators and associated trucks can operate; and | |
• | haulage limits determined by the size and number of trucks and their productivity. |
• | 13 m to 25 m berm width; | |
• | 30 m bench height; | |
• | Variable Slope angles based on recommendations by Coffey Mining, between 53o and 63.4o inter ramp angles; and | |
• | 25 m wide haul roads typically 1:9 grade. |
(C) | Production Scheduling |
(D) | Mine Equipment |
(3) | Processing |
(A) | Process Plant |
51
Table of Contents
(B) | Mill Recovery |
(4) | Infrastructure |
• | Sunwater — 500 megalitres per annum. | |
• | Burnett Shire — (Option 1) — 400 megalitres per annum. | |
• | Burnett Shire — (Option 2) — 400 megalitres per annum. |
(5) | Logistics |
52
Table of Contents
(6) | Community Affairs |
(d) | Bonikro Operation | |
(1) | Overview |
(2) | Mining |
(A) | General |
(B) | Pit Design and Planning |
53
Table of Contents
• | mill feed requirements and capacities; | |
• | stripping requirements for cutback stages; | |
• | loading rate constraints, where two excavators and associated trucks can operate; and | |
• | haulage limits determined by the size and number of trucks and their productivity. |
• | 20 m to 30 m berm intervals with 2.5 m to 5 m mining benches; | |
• | Variable Slope angles based on recommendations by Coffey Mining, between 37o and 59.6o inter ramp angles; and | |
• | 15 m to 22 m wide haul roads typically 1:9 grade. |
(C) | Mine Equipment |
(3) | Processing |
Residence Time | 24 hours | |
Pulp Density | 48-52% | |
Cyanide Concentration | 0.05% initial | |
pH | >10 | |
Carbon Concentration | 8-10GRS/L |
54
Table of Contents
(4) | Infrastructure |
(5) | Logistics |
(6) | Community Affairs |
55
Table of Contents
C. | Organisational Structure |
Lihir Gold Limited | Ownership Interest | Voting Power | ||||||||
Subsidiaries | Country of Incorporation | (Percent) | (Percent) | |||||||
Niugini Mining Limited | Papua New Guinea | 100 | 100 | |||||||
Niugini Mining (Australia) Pty Ltd | Australia | 100 | 100 | |||||||
Lihir Management Company Limited | Papua New Guinea | 100 | 100 | |||||||
Lihir Business Development Limited | Papua New Guinea | 100 | 100 | |||||||
Lihir Services Australia Pty Ltd | Australia | 100 | 100 | |||||||
Lihir Australian Holdings Pty Ltd | Australia | 100 | 100 | |||||||
Ballarat Goldfields Pty Ltd | Australia | 100 | 100 | |||||||
Berringa Resources Pty Ltd | Australia | 100 | 100 | |||||||
Ballarat West Goldfields Pty Ltd | Australia | 100 | 100 | |||||||
New Resources Pty Ltd | Australia | 100 | 100 | |||||||
Corpique(No.21) Pty Ltd | Australia | 100 | 100 | |||||||
Equigold Pty Ltd | Australia | 100 | 100 | |||||||
Swindon Holdings Pty Ltd | Australia | 100 | 100 | |||||||
Stanmines Pty Ltd | Australia | 100 | 100 | |||||||
Kim Resources Pty Ltd | Australia | 100 | 100 | |||||||
Equigold Mines Côte d’Ivoire SA | Côte d’Ivoire | 90 | 90 | |||||||
Equigold Côte d’Ivoire SA | Côte d’Ivoire | 98 | 98 |
56
Table of Contents
D. | Property, Plant and Equipment | |
(a) | Lihir operation |
(1) | Lihir Island (Niolam Island) |
(2) | Mining Rights |
57
Table of Contents
(3) | Geology |
58
Table of Contents
59
Table of Contents
60
Table of Contents
(4) | Reserve Estimates |
Contained | ||||||||||||||
Reserve | Tonnes | Average grade | Ounces | |||||||||||
Category | (In millions) | (g/t Au) | (millions) | |||||||||||
Un-mined Ore | Proven | 0 | 0 | 0 | ||||||||||
Probable | 180.3 | 2.94 | 17.0 | |||||||||||
Economic Stockpiled Ore | Proven | 59.4 | 2.48 | 4.7 | ||||||||||
Total Reserves | 239.6 | 2.83 | 21.8 |
61
Table of Contents
(5) | Exploration |
62
Table of Contents
(6) | Environmental Considerations | |
(A) | Overview |
63
Table of Contents
(B) | Environmental Plan |
64
Table of Contents
(C) | Land and Habitat Impacts |
(D) | Waste Rock and Marine Impacts |
65
Table of Contents
(E) | Stockpile Drainage |
(F) | Tailings Disposal |
66
Table of Contents
(G) | Rehabilitation and Decommissioning |
(H) | Seismic Considerations |
67
Table of Contents
(7) | Material plans to construct, expand or improve facilities (MOPU Project) |
• | Increase gold production by an average 240,000 ounces per year over the life of the operation. | ||
• | Lift output over the period from 2011 to 2021 by 2.35 million ounces to more than 10 million ounces. | ||
• | Increase gold production by in excess of 1 million ounces over the life of the operation, due to improved processing efficiencies. | ||
• | Provide potential for additional reserves to be established due to the improved project economics, extending the life of the operation. | ||
• | Reduce costs of production by approximately $80 per ounce, following commissioning in 2011. | ||
• | Boost operating cash flows and deliver a significant uplift to net present value. | ||
• | Create operational flexibility to ensure more reliable and consistent production. | ||
• | Involve capital investment of $696 million (as at February 2008) to lift process plant capacity to match the current mining rate. |
68
Table of Contents
• | By maximizing direct feed ore to the autoclaves, the proportion of ore fed through the flotation circuit is reduced, thereby increasing gold recoveries and consequently total gold production. | ||
• | By accelerating processing rates, bringing forward production and optimizing the processing operation. |
(b) | Ballarat operation |
(1) | Overview |
69
Table of Contents
70
Table of Contents
(2) | Ballarat East |
(A) | Geology |
(B) | Mineralization |
71
Table of Contents
Fine Grained Gold (0.0 to 0.3 mm) | 9 | % | ||
Coarse Grained Gold (0.3 to 1.2 mm) | 41 | % | ||
Very Coarse Gold (>1.2 mm) | 50 | % |
72
Table of Contents
(C) | Reserve estimate |
(D) | Exploration |
(E) | Rehabilitation and Decommissioning |
(3) | Other projects |
(A) | Ballarat West |
73
Table of Contents
(B) | Ballarat South |
(C) | Berringa |
(c) | Mount Rawdon Operation |
(1) | Overview |
(2) | Geology and Mineralization |
74
Table of Contents
(4) | Reserve Estimate |
75
Table of Contents
(5) | Rehabilitation and Decommissioning |
(d) | Bonikro operation |
(1) | Overview |
(2) | Geology |
(3) | Mineralization |
76
Table of Contents
(4) | Reserve Estimates |
(5) | Rehabilitation and Decommissioning |
(d) | Insurance |
77
Table of Contents
Table of Contents
(b) | Recent Developments |
(1) | MOPU Project |
(2) | Merger with Equigold |
79
Table of Contents
(3) | Issue of Additional Capital |
(4) | Reserves |
80
Table of Contents
(5) | Reduction in Ballarat Asset Value |
(c) | Critical Accounting Estimates and Judgments |
81
Table of Contents
• | a resource and resource potential review conducted by independent experts appropriately qualified to opine on the existing exploration and drilling data and take into account other factors in forming their opinions; | ||
• | announcements regarding the asset have been sufficiently scrutinised by a JORC recognised Competent Person with sufficient experience relevant to the style of mineralisation and the type of deposit under consideration; | ||
• | clear delineation from drilling of multiple repeats of mineralised faults and structures that hosted ore bodies in the upper levels of the mine that were historically extracted. The drilling intersections are of sufficient tenor to provide confidence of continuity of mineralisation and/or repetition along strike and down dip; | ||
• | historical records of mining at the Ballarat field revealed production in excess of 11 million ounces of gold. Of this, 1.7 million ounces were produced from geological structures similar to those identified in recent drilling below the old workings; | ||
• | a well documented history of previous production and work on stope modelling had given a good indication of the grade and size of individual ore lenses. This information had been used to model the shape of likely ore lenses intersected by drilling; |
82
Table of Contents
• | drilling undertaken by Ballarat Goldfields prior to its acquisition by the Company had successfully intersected multiple repeats of mineralised faults and structures that hosted ore zones in the upper levels of the mine; ore from these upper level zones had been successfully extracted in the past. The drilling intersections were of sufficient spacing and frequency to provide some confidence about continuity of mineralisation below the historically mined ore zones; | ||
• | independent technical evaluation of the mineral assets of Ballarat Goldfields prepared by Grant Samuel & Associates in November 2006; | ||
• | the successful conversion of inferred resource into higher resource categories as drilling density increases from resource definition drilling to stope delineation drilling; | ||
• | positive results from trial mining and pilot processing plant which during 2008 yielded 10,366oz of gold; | ||
• | at the time of acquisition, the Ballarat project was deemed to be in the development phase, with underground decline development and trial mining of the first stopes being undertaken, along with trial processing of small parcels of ore. A significant effort had been expended over several years to develop a model which accurately predicts the resource boundaries and the mineable ore. Drilling results were supportive of the veracity of the model, and preliminary trial mining had indicated mineralisation was present on the structures expected. |
83
Table of Contents
(d) | Changes in Accounting Policies and New Accounting Standards |
84
Table of Contents
85
Table of Contents
Application date for | ||||||||||
Application date | Preliminary assessment on the impact of the | the Consolidated | ||||||||
Reference | Title | Summary | of standard | Consolidated Entity’s financial report | Entity | |||||
IFRS 2 | Share-based Payment | Amendment relating to vesting conditions and cancellations | Annual period beginning on or after 1 January 2009 | The Consolidated Entity has share-based payment transactions that may be affected by these amendments. The Consolidated Entity has yet to determine the extent of the impact, if any. | Annual period beginning on or after 1 January 2009 | |||||
IFRS 3 | Business Combinations | Comprehensive revision on applying the acquisition method | Annual periods beginning on or after 1 July 2009 | This amendment will impact the accounting for future business combinations effected after adoption of the revised accounting standard. | Annual periods beginning on or after 1 July 2009 | |||||
IFRS 7 | Financial Instruments: Disclosures. | Amendments for disclosure of eligible hedged items. | Annual periods beginning on or after 1 July 2009. | IFRS 7 is a disclosure standard so will have no direct impact on the amounts disclosed in the Consolidated Entities’ financial statements. | Annual periods beginning on or after 1 July 2009. | |||||
IAS 1 | Presentation of Financial Statements | Amendments relating to disclosure of puttable instruments and obligations arising on liquidation | Annual periods beginning on or after 1 January 2009 | At present the Consolidated Entity has no puttable financial instruments as defined under IAS 32 therefore the amendment would have no impact for the Consolidated Entity as at 31 December 2008. | Annual periods beginning on or after 1 January 2009 | |||||
IAS 27 | Consolidated and Separate Financial Statements | Consequential amendments arising from amendments to IFRS 3 | Annual periods beginning on or after 1 July 2009 | This amendment will impact the accounting for future business combinations effected after adoption of the revised accounting standard. | Annual periods beginning on or after 1 July 2009 | |||||
IAS 28 | Investments in Associates | Consequential amendments arising from amendments to IFRS 3 | Annual periods beginning on or after 1 July 2009 | This amendment will impact the accounting for future business combinations effected after adoption of the revised accounting standard. | Annual periods beginning on or after 1 July 2009 | |||||
IAS 31 | Interest in Joint Ventures | Consequential amendments arising from amendments to IFRS 3 | Annual periods beginning on or after 1 July 2009 | This amendment will impact the accounting for future business combinations effected after adoption of the revised accounting standard. | Annual periods beginning on or after 1 July 2009 | |||||
IAS 32 | Financial Instruments: Presentation | Amendments relating to puttable instruments and obligations arising from liquidation | Annual periods beginning on or after 1 January 2009 | At present the Consolidated Entity has no puttable financial instruments as defined under IAS 32 therefore the amendment would have no impact for the Consolidated Entity as at 31 December 2008. | Annual periods beginning on or after 1 January 2009 | |||||
IAS 39 | Financial Instruments: Recognition and Measurement. | Amendments for eligible hedged items. | Annual periods beginning on or after 1 July 2009. | The Consolidated Entity has not yet determined the extent of the impact of these amendments, if any. | Annual periods beginning on or after 1 July 2009. |
86
Table of Contents
Application date for | ||||||||||
Application date | Preliminary assessment on the impact of the | the Consolidated | ||||||||
Reference | Title | Summary | of standard | Consolidated Entity’s financial report | Entity | |||||
IFRIC 15 | Agreements for the construction of real estate. | This interpretation provides clarification of the accounting | Annual periods beginning on or after 1 January 2009. | Not applicable | Annual periods beginning on or after 1 January 2009. | |||||
for agreements for the construction of real estate. | ||||||||||
IFRIC 16 | Hedges of a net investment in a foreign operation. | This interpretation provides clarification for the accounting for hedges of a net investment in a foreign operation. | Annual periods beginning on or after 1 October 2009. | The Consolidated Entity has not yet determined the extent of the impact of these amendments, if any. | Annual periods beginning on or after 1 October 2009. | |||||
IFRIC 17 | Guidance on distributions of non-cash items to owners | This interpretation provides clarification for the accounting for distributions of non cash items to owners | Annual periods beginning on or after 1 July 2009. | Not applicable | Annual periods beginning on or after 1 July 2009. | |||||
Amendments to IFRS | Various | Improvements to International Financial Reporting Standards | Annual periods beginning on or after 1 January 2009 | The Consolidated Entity has not yet determined the extent of the impact of these amendments, if any. | Annual periods beginning on or after 1 January 2009 |
87
Table of Contents
$m | ||||||||||||||||
Note | 2008 | 2007(1) | 2006(1) | |||||||||||||
Revenue | 6 | 755.6 | 498.4 | 386.0 | ||||||||||||
Cost of sales | 8 | (451.3 | ) | (261.3 | ) | (211.0 | ) | |||||||||
Gross profit from mining operations | 304.3 | 237.1 | 175.0 | |||||||||||||
Corporate expense | (31.9 | ) | (25.3 | ) | (12.1 | ) | ||||||||||
Project studies | (2.6 | ) | (7.5 | ) | (0.8 | ) | ||||||||||
Exploration expense | (8.5 | ) | (8.4 | ) | (5.9 | ) | ||||||||||
Operating profit before other income / (expense) | 261.3 | 195.9 | 156.2 | |||||||||||||
Other income / (expense) | ||||||||||||||||
Hedging loss | 9 | (75.5 | ) | (97.2 | ) | (78.3 | ) | |||||||||
Other income | 10 | 0.3 | — | — | ||||||||||||
Other expenses | 10 | (31.3 | ) | (13.8 | ) | — | ||||||||||
Operating profit before finance costs | 154.8 | 84.9 | 77.9 | |||||||||||||
Financial income | 11 | 7.8 | 10.9 | 4.2 | ||||||||||||
Financial expenses | 11 | (0.6 | ) | (131.6 | ) | (6.2 | ) | |||||||||
Profit / (loss) before tax | 162.0 | (35.8 | ) | 75.9 | ||||||||||||
Income tax benefit / (expense) | 12 | (51.8 | ) | 11.7 | (21.0 | ) | ||||||||||
Net profit / (loss) after tax | 110.2 | (24.1 | ) | 54.9 | ||||||||||||
Attributable to equity holders of the Company | 109.3 | (24.1 | ) | 54.9 | ||||||||||||
Attributable to minority interests | 28 | 0.9 | — | |||||||||||||
110.2 | (24.1 | ) | 54.9 | |||||||||||||
Other comprehensive income | ||||||||||||||||
Exchange difference on translation of foreign operations | 27 | (158.5 | ) | 42.6 | — | |||||||||||
Net change in fair value of cash flow hedges | 27 | (32.7 | ) | (59.1 | ) | (50.8 | ) | |||||||||
Deferred loss on cash flow hedges | 27 | 76.7 | 97.8 | — | ||||||||||||
Net change in fair value of available for sale financial assets | 27 | (2.2 | ) | 1.2 | — | |||||||||||
Income tax on other comprehensive income | 12 | (30.6 | ) | (4.9 | ) | 20.4 | ||||||||||
Other comprehensive income for the period net of tax | (147.3 | ) | 77.6 | (30.4 | ) | |||||||||||
Total comprehensive income | (37.1 | ) | 53.5 | 24.5 | ||||||||||||
Attributable to equity holders of the Company | (38.0 | ) | 53.5 | 24.5 | ||||||||||||
Attributable to minority interests | 28 | 0.9 | — | — | ||||||||||||
(37.1 | ) | 53.5 | 24.5 | |||||||||||||
Earnings / (loss) per share | 39 | |||||||||||||||
- Basic (cents/share) | 5.3 | (1.4 | ) | 4.2 | ||||||||||||
- Diluted (cents/share) | 5.3 | (1.4 | ) | 4.2 |
(1) | Revised (refer Note 35 of the financial statements) | |
* | Refer to item 18 Financial Statements |
88
Table of Contents
Operation | FY 2008 | |||
Lihir, PNG | 771,455 | |||
Mt Rawdon, QLD | 53,592 | (1) | ||
Kirkalocka, WA | 9,442 | (2) | ||
Bonikro, Cote d’Ivoire | 36,735 | (3) | ||
Ballarat, VIC | 10,366 | |||
Total | 881,590 |
(1) | The acquisition of Mt Rawdon was effective from 17 June 2008. Mt Rawdon poured 102,415 ounces of gold (full year 2008), with 53,592 ounces attributable to the Consolidated Entity. | |
(2) | The acquisition of Kirkalocka was effective from 17 June 2008 with Kirkalocka ceasing production on 14 August 2008. Kirkalocka poured 30,474 ounces of gold (full year 2008) with 9,442 ounces attributable to the Consolidated Entity. | |
(3) | The acquisition of Bonikro was effective from 17 June 2008 with the Bonikro operation being commissioned in October 2008. |
89
Table of Contents
• | Total revenue for the year rose by 52% to a record $756 million (2007 revenue of $498 million and 2006 revenue of $386 million), driven by a combination of higher production (23%) and a higher gold price (29%). Carbon credits added around $4.5 million to revenue. | ||
• | Total cash operating cost, before depreciation and amortisation, totalled $367 million, up 63% on the previous year (2007 cash operating costs of $225 million and 2006 cash operating costs of $181 million). The increase reflected higher throughput, production and sales volumes, increased fuel prices and adverse exchange rate movements. On a unit cost basis, cost increases were less pronounced. Gross cash costs per ounce rose by 19% and total cash costs by 34%. | ||
• | Mine EBITDA improved strongly for the year, rising 42% to $389 million ($273 million in 2007, in and $204 million 2006). This increase reflected the strong improvement in operational performance at the Lihir operation and the contribution of the newly acquired operations. | ||
• | Underlying profit was a record $185 million, up 54% on the previous year ($120 million in 2007 and $66 million in 2006). Net profit after tax attributable to equity holders of the Company was $109 million, up from a loss of $24 million in 2007 ($156.2 million profit for 2006). | ||
• | Operating cash flows for the year were $212 million. |
90
Table of Contents
91
Table of Contents
(1) | Revised (refer Note 35 of the financial statements) |
92
Table of Contents
• | Lihir sustaining capital and Million Ounce Plant Upgrade — $141 million | ||
• | Ballarat operation infrastructure and development expenditure — $108 million | ||
• | Bonikro, Côte d’Ivoire — $27 million |
(f) | Significant changes in the state of affairs |
• | In June 2008 the group acquired 100% of Equigold. Equigold has five subsidiary companies, three of which are wholly owned and incorporated in Australia: Swindon Holdings Pty Ltd, Stanmines Pty Ltd, and Kim Resources NL and two of which are majority owned and are incorporated in Côte d’Ivoire: Equigold Mines Côte d’IvoireSA (85% interest) and Equigold Côte d’IvoireSA (95% interest). Under the scheme of arrangement for the merger, Equigold shareholders received 33 shares in the Company for every 25 Equigold shares held. | ||
The contribution from these entities for the period June 17, 2008 — December 31, 2008 was $8.2 million net profit before tax and $5.2 million net profit after tax, before any adjustments arising from the business combination, including acquired mineral reserve amortisation charges. The consolidated results for these entities for the whole of the previous corresponding period is impractical to disclose due to differences in reporting currencies and accounting policies. | |||
• | In December 2008, Equigold, Stanmines and Kim Resources changed their company type from no liability companies to proprietary limited companies. | ||
• | In December 2008, the Consolidated Entity acquired an additional 5% interest in Equigold Mines Côte d’Ivoire SA and 3% interest in Equigold Côte d’Ivoire SA from the respective minority interests. |
93
Table of Contents
94
Table of Contents
(in US$ millions) | 2008 | 2007 | 2006 | |||||||||
Lihir | 153.0 | 156.5 | 185.9 | |||||||||
Ballarat | 118.6 | 65.9 | — | |||||||||
Bonikro | 27.6 | — | — | |||||||||
Côte d’Ivoire exploration | 2.3 | — | — | |||||||||
Mount Rawdon | 1.3 | — | — | |||||||||
Corporate | 1.3 | 0.3 | 1.8 | |||||||||
304.1 | 222.7 | 187.7 | ||||||||||
95
Table of Contents
96
Table of Contents
97
Table of Contents
98
Table of Contents
99
Table of Contents
Later than 1 year | Later than 2 years | |||||||||||||||||||
but not later than 2 | but not later than 5 | |||||||||||||||||||
Total | Less than 1 year | years | years | More than 5 years | ||||||||||||||||
$ m | $ m | $ m | $ m | $ m | ||||||||||||||||
Capital (Finance) Lease Obligations | 0.5 | 0.3 | 0.2 | — | — | |||||||||||||||
Operating Lease Obligations | 4.4 | 2.2 | 0.9 | 1.2 | 0.1 | |||||||||||||||
Capital expenditure commitments(i) | 96.9 | 83.7 | 13.2 | — | — | |||||||||||||||
Purchase obligations (ii) | 51.7 | 51.7 | — | — | — | |||||||||||||||
Other Liabilities (ii) | 66.1 | 29.3 | — | 1.4 | 35.4 | |||||||||||||||
Total | 219.6 | 167.2 | 14.3 | 2.6 | 35.5 |
(i) | The major items of capital commitment are: Lihir Island ($82.4 million for the MOPU Project and $4.9 million for other equipment purchases), Ballarat ($4.9 million water purification plant and tailings storage upgrade and $1.2 million other equipment purchases), and Bonikro ($2.8 million dump trucks and other equipment). | |
(ii) | Purchase obligations consist of trade creditors of $45.5 million and employee service related liabilities of $6.2 million. | |
(iii) | Other liabilities represents $55.3 million consisting of current and non-current provisions on the consolidated balance sheet which represents certain employee, rehabilitation and other provisions and deferred settlement payable of $10.8 million which represents the outstanding payment on the acquisition of shares from minority interests. |
100
Table of Contents
G. | Recently issued IFRS standards |
101
Table of Contents
Chairman, Independent Director
Managing Director and Chief Executive Officer
Independent Director
Independent Director
102
Table of Contents
Independent Director
Independent Director
Independent Director
Independent Director
103
Table of Contents
Name | Age | Position with the Company | Year Joined | |||
Arthur Hood | 56 | Managing Director | 2005 | |||
Phil Baker | 54 | Chief Financial Officer | 2007 | |||
Noel Foley | 60 | Executive General Manager Lihir Operations | 2006 | |||
Graham Folland | 51 | Executive General Manager Corporate Development | 2006 | |||
Tim Fry | 45 | Executive General Manager, West Africa and Corporate Services | 2008 | |||
Stuart MacKenzie | 48 | Group Secretary and General Counsel | 2006 |
104
Table of Contents
• | Principles used to determine the nature and amount of remuneration; | |
• | Details of remuneration; | |
• | Service agreements; and | |
• | Share-based compensation. |
• | the Chairman of the Board: $300,000 per annum (with no additional fee for service on any committees); and | |
• | for the other non-executive directors: |
• | base fee: $100,000 per annum; | |
• | fee for serving as Chairman of the Audit Committee: $27,500 per annum; | |
• | fee for serving as Chair of other committees: $20,000 per annum; and | |
• | fee for membership of a committee: $10,000 per annum (per committee), |
105
Table of Contents
• | the Chairman of the Board: $330.000 per annum (with additional fee for service on any committees); and | |
• | for the other non-executive directors: | |
• | base fee: $110,000 per annum; | |
• | fee for serving as Chairman of the Audit Committee: $30,250 per annum; | |
• | fee for serving as Chair of other committees: $22,000 per annum; and | |
• | fee for membership of a committee: $11,000 per annum (per committee) |
2008 | 2007 | |||||||
$ | $ | |||||||
Dr Ross Garnaut(2) (3) | 282,787 | 255,000 | ||||||
Mr Bruce Brook(2) | 118,893 | 107,350 | ||||||
Dr Peter Cassidy(2) | 121,393 | 107,500 | ||||||
Dr Michael Etheridge(2) | 103,306 | 71,735 | ||||||
Mrs Winifred Kamit(1) | 121,393 | 109,850 | ||||||
Mr Geoff Loudon(1) | 112,350 | 100,000 | ||||||
Mr Alister Maitland(2) | 103,306 | 71,735 |
Audit | Remuneration | Safety and | Sustainable | Total | ||||||||||||||||||||
Committee | and Nomination | Technical | Development | Directors | ||||||||||||||||||||
Base fees | fees | Committee fees | Committee fees | Committee fees | fees | |||||||||||||||||||
Dr Ross Garnaut | 282,787 | 282,787 | ||||||||||||||||||||||
Mr Bruce Brook | 94,262 | 24,631 | 118,893 | |||||||||||||||||||||
Dr Peter Cassidy | 94,262 | 9,044 | 18,087 | 121,393 | ||||||||||||||||||||
Dr Michael Etheridge | 94,262 | 9,044 | 103,306 | |||||||||||||||||||||
Mrs Winifred Kamit | 94,262 | 9,044 | 18,087 | 121,393 | ||||||||||||||||||||
Mr Geoff Loudon | 94,262 | 9,044 | 9,044 | 112,350 | ||||||||||||||||||||
Mr Alister Maitland | 94,262 | 9,044 | 103,306 |
Audit Committee — Chairman | Mr Bruce Brook | |
Remuneration and Nomination Committee — Chairman | Dr Ross Garnaut | |
Safety and Technical Committee — Chairman | Dr Peter Cassidy | |
Sustainable Development Committee — Chairperson | Mrs Winifred Kamit |
106
Table of Contents
Notes: | ||
(1) | Fees are paid to Mrs Kamit and Mr Loudon in PNG Kina. Mr Loudon’s fees are donated to the Port Moresby City Mission | |
(2) | Fees are paid to Dr Garnaut, Mr Brook, Dr Cassidy, Dr Etheridge and Mr Maitland in Australian dollars equivalent to the amount reported. | |
(3) | The services of Dr Garnaut are provided through Dr Garnaut’s family company, Maccullochella Pty Limited |
• | competitive in structure and quantum with comparator organizations so as to attract, retain and motivate appropriately qualified and experienced executives; | |
• | acceptability to shareholders; | |
• | performance linkage/alignment of executive compensation; | |
• | transparency; and | |
• | capital management. |
• | has company profit as a core component of plan design; | |
• | focuses on sustained growth in shareholder wealth, consisting of dividends and growth in share price, and delivering constant return on assets as well as focusing the executive on key non-financial drivers of value; and | |
• | attracts and retains high calibre executives. |
• | rewards capability and experience; | |
• | reflects competitive reward for contribution to growth in shareholder wealth; and | |
• | provides a clear structure for earning rewards. |
107
Table of Contents
• | base package including superannuation and benefits; | |
• | short-term performance incentives, and | |
• | long-term incentives through participation in the Lihir Executive Share Plan (the “LESP”). |
108
Table of Contents
STI Target Level | Managing Director | Key management personnel | ||
Attainment of Target | 60% of Base package (before tax) | 40 % of Base package (before tax) |
• | Phil Baker–Chief Financial Officer |
• | Mark Clark – Executive General Manager West Africa and Corporate Services (appointed June 17, 2008, resigned November 14, 2008) |
• | Noel Foley – Executive General Manager, PNG Operations |
• | Graham Folland – Executive General Manager Corporate Development |
• | Tim Fry – Executive General Manager West Africa and Corporate Services (appointed November 1, 2008) |
• | Morgan Hart – Executive General Manager Australia and Africa Operations (appointed June 17, 2008, resigned December 31, 2008) |
• | Peter Smith – Executive General Manager Australia and Africa Operations (appointed March 19, 2009) |
• | Stuart MacKenzie – Group Secretary and General Counsel |
• | Noel Foley – Executive General Manager, Operations |
109
Table of Contents
Long- | Share- | |||||||||||||||||||||||||||||||
term | based | |||||||||||||||||||||||||||||||
2008 | Short-term employee benefits | Post-employment benefits | benefits | payments | ||||||||||||||||||||||||||||
Non | Long | |||||||||||||||||||||||||||||||
Cash salary | Cash | monetary | service | |||||||||||||||||||||||||||||
Name | and fees | bonus | benefits(4) | Superannuation | Other | leave | Share rights | Total | ||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||
Non-executive directors | ||||||||||||||||||||||||||||||||
Dr Ross Garnaut — Chairman | 282,787 | — | — | — | — | — | — | 282,787 | ||||||||||||||||||||||||
Mr Bruce Brook | 118,893 | — | — | — | — | — | — | 118,893 | ||||||||||||||||||||||||
Dr Peter Cassidy | 121,393 | — | — | — | — | — | — | 121,393 | ||||||||||||||||||||||||
Dr Mike Etheridge | 103,306 | — | — | — | — | — | — | 103,306 | ||||||||||||||||||||||||
Mrs Winifred Kamit | 121,393 | — | — | — | — | — | — | 121,393 | ||||||||||||||||||||||||
Mr Geoff Loudon | 112,350 | — | — | — | — | — | — | 112,350 | ||||||||||||||||||||||||
Mr Alister Maitland | 103,306 | — | — | — | — | — | — | 103,306 | ||||||||||||||||||||||||
Sub-total Non- executive directors | 963,428 | — | — | — | — | — | — | 963,428 | ||||||||||||||||||||||||
Executive directors | ||||||||||||||||||||||||||||||||
Arthur Hood | 1,403,782 | 552,516 | 9,422 | 104,051 | 19,868 | 1,740,208 | 3,829,847 | |||||||||||||||||||||||||
Other key management personnel | ||||||||||||||||||||||||||||||||
Phil Baker | 367,475 | 70,767 | 12,395 | (5) | 33,073 | — | 2,074 | 244,482 | 730,266 | |||||||||||||||||||||||
Mark Clark(1) | 166,158 | 12,950 | 2,355 | 16,037 | — | — | — | 197,500 | ||||||||||||||||||||||||
Noel Foley | 277,505 | 37,582 | — | 85,251 | — | — | 260,007 | 660,345 | ||||||||||||||||||||||||
Graham Folland | 304,066 | 59,939 | 25,979 | (6) | 27,366 | — | 2,817 | 222,526 | 642,693 | |||||||||||||||||||||||
Tim Fry(2) | 51,907 | 17,322 | — | 4,672 | — | 10 | — | 73,911 | ||||||||||||||||||||||||
Morgan Hart(3) | 203,767 | 45,032 | 2,355 | 16,276 | — | — | — | 267,430 | ||||||||||||||||||||||||
Stuart MacKenzie | 244,281 | 46,930 | 9,422 | 21,985 | — | 1,748 | 183,017 | 507,383 | ||||||||||||||||||||||||
Total Key management personnel compensation | 3,982,369 | 843,038 | 61,928 | 308,711 | — | 26,517 | 2,650,240 | 7,872,803 |
Notes: | ||
(1) | Mr Clark commenced employment with the Consolidated Entity on 17 June 2008 and ceased employment with the Consolidated Entity on 31 October 2008. | |
(2) | Mr Fry commenced employment with the Consolidated Entity on 17 November 2008. | |
(3) | Mr Hart commenced employment with the Consolidated Entity on 17 June 2008 and ceased employment with Consolidated Entity on 31 December 2008. | |
(4) | Non-monetary benefits include car parking, salary continuance, death and total permanent disablement and motor vehicle benefits. | |
(5) | Included in the total non-monetary benefit is a car benefit of $2,973. | |
(6) | Included in the total non-monetary benefit is a car benefit of $16,576. |
Name | Fixed remuneration | At risk - STI | At risk - LTI | |||||||||||||||||||||
2008 | 2007 | 2008 | 2007 | 2008 | 2007 | |||||||||||||||||||
Executive directors of Lihir Gold Limited | ||||||||||||||||||||||||
Arthur Hood | 20 | % | 22 | % | 12 | % | 14 | % | 68 | % | 64 | % | ||||||||||||
Other key management personnel of Consolidated Entity | ||||||||||||||||||||||||
Phil Baker | 33 | % | 30 | % | 13 | % | 11 | % | 54 | % | 59 | % | ||||||||||||
Mark Clark | 33 | % | — | 13 | % | — | 54 | % | — | |||||||||||||||
Noel Foley | 33 | % | 30 | % | 13 | % | 11 | % | 54 | % | 59 | % |
110
Table of Contents
Name | Fixed remuneration | At risk - STI | At risk - LTI | |||||||||||||||||||||
2008 | 2007 | 2008 | 2007 | 2008 | 2007 | |||||||||||||||||||
Graham Folland | 33 | % | 30 | % | 13 | % | 11 | % | 54 | % | 59 | % | ||||||||||||
Tim Fry | 33 | % | — | 13 | % | — | 54 | % | — | |||||||||||||||
Morgan Hart | 33 | % | — | 13 | % | — | 54 | % | — | |||||||||||||||
Stuart MacKenzie | 33 | % | 30 | % | 13 | % | 11 | % | 54 | % | 59 | % |
• | the Managing Director’s base package; | |
• | 60% of the base package (to represent the Short Term Incentive component of remuneration); and | |
• | 106.67% of the base package (to represent the Long Term Incentive component of remuneration). |
111
Table of Contents
112
Table of Contents
Name | Number of share rights granted during the year | Number of share rights vested during the year | |||||||||||||
2008 | 2007 | 2008 | 2007 | ||||||||||||
Directors of Lihir Gold Limited | |||||||||||||||
Arthur Hood | 1,649,164 | 1,535,255 | 129,249 | 49,208 | |||||||||||
Other key management personnel of the Consolidated Entity | |||||||||||||||
Phil Baker | 192,711 | 251,786 | 45,074 | N/A | |||||||||||
Mark Clark | Nil | N/A | Nil | N/A | |||||||||||
Noel Foley | 183,644 | 246,481 | 41,996 | 50,148 | |||||||||||
Graham Folland | 158,705 | 207,890 | 33,355 | 42,984 | |||||||||||
Tim Fry | Nil | N/A | Nil | N/A | |||||||||||
Morgan Hart | Nil | N/A | Nil | N/A | |||||||||||
Stuart MacKenzie | 136,033 | 181,056 | 30,989 | 14,969 |
(a) | Exercise price: $ nil (2007 — $ nil) | |
(b) | Expected volatility: 46.9% (2007 — 42%) | |
(c) | Risk-free interest rate: 6.8% (2007 — 6.12%) | |
(d) | Expected life of right (years): 10 years (2007 — 10 years) | |
(e) | Weighted average share price at grant date: $2.98 (2007 — $3.08) | |
(f) | Expected dividend yield: 0% (2007 — 0%) |
113
Table of Contents
Name | Date of exercise of share rights | Number share rights exercised during the year | |||||||||
2008 | 2007 | ||||||||||
Directors of Lihir Gold Limited | |||||||||||
Arthur Hood | Sep 2008 | 129,249 | 49,208 | ||||||||
Other key management personnel of the Consolidated Entity | |||||||||||
Phil Baker | — | — | — | ||||||||
Mark Clark | — | — | — | ||||||||
Noel Foley | Sep 2008 | 41,996 | 50,148 | ||||||||
Graham Folland | Sep 2008 | 33,355 | 42,984 | ||||||||
Tim Fry | — | — | — | ||||||||
Morgan Hart | — | — | — | ||||||||
Stuart MacKenzie | Sep 2008 | 30,989 | 14,969 |
114
Table of Contents
• | setting the Company’s values and standards of conduct, including in respect of safe work practices, environmental compliance and social obligations, and ensuring that these are adhered to in the interests of the Company’s shareholders, employees, customers, suppliers and the communities in which it operates; | |
• | safeguarding the reputation of the Company; | |
• | providing leadership of the Company within a framework of prudent and effective controls which enable risks to be assessed and managed; | |
• | setting the Company’s direction, strategies and financial objectives and ensuring that the necessary financial and human resources are in place for the Company to meet its objectives; | |
• | ensuring that the performance of management, and the Board itself, is regularly assessed and monitored; | |
• | ensuring monitoring of compliance with regulatory and ethical standards; and | |
• | appointing, terminating and reviewing the performance of the Managing Director. |
• | final approval of corporate strategy and performance objectives and reserves and financial plans; | |
• | capital management, including capital raisings, and the approval and monitoring of significant capital expenditure; | |
• | monitoring of financial performance, review and approval of significant financial and other reporting; | |
• | assessing the appropriateness and adequacy of, and monitoring compliance with, corporate governance policies and ethical standards; | |
• | evaluating the performance of the senior management team; | |
• | determining the Company’s risk management policies and reviewing and ratifying its risk management and internal control framework, including insurance, corporate security and prudential limits, codes of conduct, and legal compliance; | |
• | determining the Company’s treasury policies, including gold price hedging, foreign currency and interest rate exposure; and | |
• | the engagement of auditors to review and report to the Board on the Company’s financial results and reporting systems, internal controls and compliance with statutory and regulatory requirements. |
115
Table of Contents
• | the Board may, in accordance with the Company’s constitution, be comprised of a minimum of five Directors and maximum of twelve; and | |
• | the roles of the Chairman of the Board and of the Managing Director should be exercised by different individuals. |
116
Table of Contents
Year Appointed | ||||||
Name | Position & Committee Memberships | As Director | Term Ends | |||
Ross Garnaut | Chairman of Board, Independent Director | 1995 | ||||
Member of Audit Committee | ||||||
Member of Sustainable Development Committee | ||||||
Chairman of Remuneration and Nomination Committee | ||||||
Geoffrey Loudon | Independent Director | 1995 | ||||
Member of Safety and Technical Committee | ||||||
Member of Sustainable Development Committee | ||||||
Peter Cassidy | Independent Director | 2003 | ||||
Chairman of Safety and Technical Committee | ||||||
Member of Remuneration and Nomination Committee | ||||||
Winifred Kamit | �� | Independent Director | 2004 | |||
Chair of Sustainable Development | ||||||
Committee Member of Remuneration and Nomination Committee | ||||||
Arthur Hood | Managing Director | 2005 | October 1, 2010 | |||
Bruce Brook | Independent Director | 2005 | ||||
Chairman of Audit Committee | ||||||
Michael Etheridge | Independent Director | 2007 | ||||
Member of Safety and Technical Committee | ||||||
Alister Maitland | Independent Director | 2007 | ||||
Member of the Audit Committee |
• | Audit; | |
• | Remuneration and Nomination; | |
• | Sustainable Development (formally Environmental and Lihir Impact Committee); and | |
• | Safety and Technical. |
117
Table of Contents
• | Mr Bruce Brook — Committee Chairman | |
• | Dr Ross Garnaut | |
• | Mr Alister Maitland |
• | determining the appropriateness of accounting principles and disclosure practices adopted by management and monitoring compliance with applicable accounting standards and other requirements; | |
• | overseeing the preparation and audit of, and verifying and ensuring the integrity of, the Company’s Financial Statements and reports; | |
• | the appointment, compensation, retention and oversight of the Company’s external auditor or any other public accounting firm engaged for the purpose of performing audit, review or attestation services for the Company; | |
• | reviewing and evaluating the independence, qualifications and performance of the external auditor and managing the relationship between the Company and its external auditor; | |
• | monitoring the adequacy of the Company’s internal financial controls; | |
• | risk management, and compliance systems and processes; | |
• | overseeing the retention, tasking and resourcing of the Company’s internal auditors, monitoring their progress and evaluating their performance; and | |
• | reviewing the financial management of the Company generally and undertaking such other tasks as the Board or the Managing Director may request from time to time. |
• | requires that no person may play a significant role in managing the audit for more than five out of any seven successive years; | |
• | must approve all non-audit work which may be undertaken by the external auditor and exclude them from undertaking such work where it may give rise to a conflict of interest; | |
• | receives periodic statements, at least annually, from the auditors outlining all work undertaken for the Company, and confirming that the auditor has satisfied all professional regulations relating to auditor independence; | |
• | meets with the external auditor independently of management; | |
• | reviews the performance of external auditors at least annually and is responsible for recommending to the Board their appointment, reappointment or termination; |
118
Table of Contents
• | reviews the scope of the annual audit plan and approves the scope of the audit services to be provided; | |
• | reviews any engagement fees or terms proposed by the external auditors; | |
• | reviews and discusses with external auditors or management any significant matters, problems, difficulties or any other major issues regarding financial reporting issues; | |
• | considers whether the external auditors provision of non-audit services to the Company and any other relationship between the external auditor and the Company (if any) is compatible with maintaining the independence and objectivity of the external auditor and maintaining the quality of the audit services provided; and | |
• | if applicable, takes appropriate action in response to the external auditors report to satisfy itself of the external auditor’s independence for the purposes of making a recommendation to the Board. |
119
Table of Contents
Dr Peter Cassidy
Mrs Winifred Kamit
• | reviewing remuneration of Non-Executive Directors, the Managing Director and other senior executives; establishing criteria for membership of the Board and its committees; | |
• | processes for the identification of suitable candidates; reviewing membership of the Board and its committees; | |
• | nominating members of the Board and its committees; | |
• | formulating policies relating to the retirement of Non-Executive Directors; | |
• | reviewing management succession planning, human resources and remuneration policies for the Company generally; | |
• | ensuring the Company’s obligations in relation to employee benefits and entitlements, including superannuation, are met; and | |
• | recruitment, induction, promotion, retention, termination and other general conditions of employment |
Dr Ross Garnaut
Mr Geoff Loudon
120
Table of Contents
• | the interaction between the Company’s activities and the local community, and the ways in which these activities contribute to social and economic development; | |
• | dealings with the local community in relation to land; | |
• | maintaining and improving community health; | |
• | the impact and associated risks of the Company’s activities on the natural marine, terrestrial and atmospheric environment; | |
• | liaising with and monitoring any specialist advisory panels, working groups or committees | |
• | established for the purposes of sustainable development; and | |
• | monitoring the Company’s compliance with the applicable regulatory regimes including both the Company’s compliance with the relevant local and international emission standards and controls and the Company’s reporting obligations pursuant to those standards and codes. |
Mr Geoff Loudon
Dr Michael Etheridge
• | occupational health and safety standards, policies and issues; | |
• | technical issues associated with the Company’s exploration, mining and processing activities, with reference to the standards set by the Company and the standards and norms of the industry more generally; | |
• | review and monitoring of LGL’s reserves and resources (including review of statements made in compliance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the “JORC Code”); and | |
• | the status of major capital projects approved by the Board. |
121
Table of Contents
2008 | 2007 | 2006 | ||||||||||
Lihir Operation | ||||||||||||
Management | 9 | 10 | 12 | |||||||||
Commercial, human resources, towns and site services, community and environment | 373 | 455 | 450 | |||||||||
Mining operations and mine technical | 582 | 570 | 642 | |||||||||
Plant operations and maintenance | 1055 | 879 | 455 | |||||||||
Ballarat Operation | ||||||||||||
Management | 6 | 9 | — | |||||||||
Commercial, human resources, towns and site services, community and environment | 23 | 10 | — | |||||||||
Mining operations and mine technical | 186 | 83 | — | |||||||||
Plant operations and maintenance | 87 | — | — | |||||||||
Mt Rawdon Operation | ||||||||||||
Management | 1 | — | — | |||||||||
Commercial, human resources, towns and site services, community and environment | 8 | — | — | |||||||||
Mining operations and mine technical | 74 | — | — | |||||||||
Plant operations and maintenance | 47 | — | — | |||||||||
Bonikro Operation | ||||||||||||
Management | 1 | — | — | |||||||||
Commercial, human resources, towns and site services, community and environment | 46 | — | — | |||||||||
Mining operations and mine technical | 58 | — | — | |||||||||
Plant operations and maintenance | 136 | — | — | |||||||||
Lihir Services Australia — Brisbane | ||||||||||||
Various corporate support personnel | 99 | 53 | 28 | |||||||||
Côte d’Ivoire regional office | ||||||||||||
Exploration site personnel | 2 | — | — | |||||||||
Various corporate support personnel | 10 | — | — | |||||||||
Total Company employees | 2,803 | 2,069 | 1,587 | |||||||||
Total contractors (full-time equivalent) | 1,893 | 1,893 | 2,250 | |||||||||
Total | 4,696 | 3,962 | 3,837 |
122
Table of Contents
Interest held by directors in shares of the Company | ||||
Ross Garnaut (Director) | 115,296 | (1) | ||
Arthur Hood (Managing Director) | 519,726 | |||
Bruce Brook (Director) | 56,880 | (2) | ||
Peter Cassidy (Director) | 46,074 | (3) | ||
Michael Etheridge (Director) | 61,728 | (4) | ||
Geoffrey Loudon (Director) | 143,840 | |||
Winifred Kamit (Director) | 2,667 | (5) | ||
Alister Maitland (Director) | 82,637 | (6) |
Notes: | ||
(1) | Held by Maccullochella Pty Limited of which Dr Garnaut is a director and shareholder | |
(2) | 13,334 of which are held by Eagle’s Rest 156 Pty Limited as trustee of the Brook Family Superannuation Fund and 20,000 of which are held by Mrs GD Brook. | |
(3) | 26,667 of which are held by Cassidy Waters Pty Limited as trustee for the Cassidy Superannuation Fund | |
(4) | Held by Tectonex Geoconsultants Pty Ltd as trustee for the Etheridge Superannuation Fund | |
(5) | Held by Kamchild Limited of which Mrs Kamit is a director and shareholder | |
(6) | Held by the Alister Maitland Superannuation Fund. |
123
Table of Contents
Percentage/Voting | ||||||||
Substantial Shareholder | Relevant Interest | Power (%) | ||||||
Fidelity Management & Research LLC and Fidelity International Limited | 242,325,016 | 11.07 | ||||||
Commonwealth Bank of Australia | 237,985,334 | 10.05 | ||||||
Merril Lynch & Co Inc | 217,921,656 | 9.96 | ||||||
Nuveen Investments Inc | 214,819,596 | 9.8 | ||||||
BlackRock Group | 212,665,688 | 9.72 |
124
Table of Contents
125
Table of Contents
• | Dr Garnaut was re-appointed as chairman commencing on May 1, 2004, subject to his continuing to hold office as a director and to certain other termination rights set out in the agreement; | |
• | No fees or benefits are payable to Dr Garnaut by reason of his retirement or other termination of office; and | |
• | The Company has agreed to indemnify Dr Garnaut against any liability incurred in defending any proceedings arising from the performance of his duties and responsibilities in which judgment is given in his favor, he is acquitted, or relief is granted to him under the Companies Act. The indemnity does not apply to the extent it would be inconsistent with the Company’s constitution or to the extent the liability is otherwise insured. |
126
Table of Contents
2008 | 2007 | 2006 | ||||||||||||||
Export sales | $ | M | 683.9 | 492.3 | 324.8 | |||||||||||
Export volume | oz's | 792,346 | 707,339 | 642,531 | ||||||||||||
Export volume as % of total sales volume | % | 91.2 | % | 99.8 | % | 100.0 | % |
127
Table of Contents
128
Table of Contents
Year | Ordinary Shares | American Depositary Shares | ||||||||||||||
High | Low | High | Low | |||||||||||||
A$ | A$ | $ | $ | |||||||||||||
2004 | 1.59 | 0.90 | 24.20 | 12.58 | ||||||||||||
2005 | 2.35 | 0.99 | 37.01 | 15.30 | ||||||||||||
2006 | 3.64 | 1.98 | 28.37 | * | 11.46 | * | ||||||||||
2007 | 4.42 | 2.74 | 40.95 | 21.70 | ||||||||||||
2008 | 4.37 | 1.53 | 39.95 | 9.81 |
Ordinary Shares | American Depositary Shares | |||||||||||||||||
Quarter Ending | High | Low | High | Low | ||||||||||||||
A$ | A$ | $ | $ | |||||||||||||||
2007 | March 31 | 3.57 | 2.79 | 28.60 | * | 21.70 | * | |||||||||||
June 30 | 3.25 | 2.91 | 27.63 | 24.50 | ||||||||||||||
September 30 | 3.94 | 2.74 | 36.03 | 22.29 | ||||||||||||||
December 31 | 4.42 | 3.16 | 40.95 | 27.20 | ||||||||||||||
2008 | March 31 | 4.37 | 3.59 | 39.95 | 31.57 | |||||||||||||
June 30 | 3.29 | 2.86 | 31.87 | 26.50 | ||||||||||||||
September 30 | 2.80 | 1.75 | 24.80 | 13.93 | ||||||||||||||
December 31 | 3.13 | 2.25 | 21.93 | 13.98 | ||||||||||||||
2009 | March 31 | 3.29 | 3.20 | 22.79 | 21.97 |
129
Table of Contents
Ordinary Shares | American Depositary Shares | |||||||||||||||
High | Low | High | Low | |||||||||||||
A$ | A$ | $ | $ | |||||||||||||
December 08 | 3.04 | 2.98 | 21.93 | 13.98 | ||||||||||||
January 09 | 3.16 | 3.07 | 21.93 | 16.72 | ||||||||||||
February 09 | 3.38 | 3.29 | 22.96 | 19.33 | ||||||||||||
March 09 | 3.29 | 3.20 | 23.95 | 18.05 | ||||||||||||
April 09 | 3.01 | 3.00 | 24.35 | 19.51 | ||||||||||||
May 09 | 3.30 | 3.26 | 24.44 | 20.89 |
130
Table of Contents
• | the acquisition of, or an agreement to acquire, whether contingent or not, assets the value of which is more than half the value of assets of the company before the acquisition; | |
• | the disposal of, or an agreement to dispose of, whether contingent or not, assets of the company the value of which is more than half the value of the assets of the company before the disposal; or | |
• | a transaction which has or is likely to have the effect of the company acquiring rights or interests, or incurring obligations or liabilities, the value of which is more than half the value of the assets of the company before the transaction. |
131
Table of Contents
• | the power to control the exercise of any right to vote attached to a voting share; | |
• | the power to acquire or dispose of the voting share; or | |
• | having the above powers by virtue of any trust, arrangement, agreement or understanding. |
• | reflected changes made under the new Companies Act (for example, the abolition of par value of shares, the increased power for directors to make distributions of money or property to members and the removal of the requirement that a company have specific objects and powers); or | |
• | took advantage of specific provisions of the new Act which allow the Company to take a course of action (for example, to buy back the company’s shares, to indemnify directors or to pay for D&O liability insurance) if expressly permitted to do so by its constitution. |
• | The Company is incorporated and registered in PNG (Number C1-23423) and is a registered foreign company in Australia (ARBN 069 803 998). Under section 17 of the Companies Act, a company has full capacity to carry on or undertake any business or activity, do any act or enter into any transaction, and in respect of these purposes, it has full rights, powers and privileges. Therefore it is not necessary to list the objects and purposes of the Company in its constitution. | |
• | In accordance with clause 17, a director may vote on a proposal, arrangement or contract in which he is materially interested provided that he has complied with the Companies Act, the Official Listing Rules of the ASX and provided the board does not otherwise determine. | |
• | The constitution contains provisions for the remuneration of directors (including reimbursement of expenses), the indemnification of directors in respect of certain liability or for costs incurred in defending or settling any claim or proceedings relating to such liability, and for effecting insurance for directors to the extent permitted under the Act. These are general powers of the Company which may in the normal course be exercised by a resolution of the Board. An interested director who has declared his or her interest would be entitled to vote on any such resolution unless the board has determined that the director should not exercise any power in relation to the matter. The interested director is not entitled to vote on a resolution to make that preliminary determination. | |
• | There are no specific provisions relating to borrowing powers in the constitution. Clause 20.1 provides that the Board has all necessary power for managing, and for directing and supervising the management |
132
Table of Contents
of, the business and affairs of the Company to the exclusion of the Shareholders and in accordance with clause 21.9 every resolution of the board is decided by a majority of votes. Therefore, the borrowing by the Company is determined by a majority decision of the Board. | ||
• | An exercise of the borrowing power may in certain circumstances be subject to the provisions of the Companies Act (section 110) requiring shareholder approval for major transactions. | |
• | There are no provisions for retirement or non-retirement of directors under an age limit in the constitution. | |
• | Clause 15.5 provides that a director of the Company need not be a shareholder. | |
• | Clause 10A.2(b) provides that Class B shares have no entitlement to dividends. | |
• | Clause 24.1 provides that the Board may declare distributions to the shareholders (other than Class B shareholders) including declaring the property to constitute the distribution and the time of the distribution. Shareholder approval is not required for a distribution. Clause 24.3 provides that where the Board has declared a dividend the obligation of the Company to make the distribution only arises when the Board fixes the time for distribution and that time has arrived. | |
• | Clause 24.8 provides that each dividend in respect of each share must be distributed according to the amount paid up on that share save to the extent that the terms of issue of a share provide otherwise. The Company does not have any partly paid shares on issue. | |
• | Clause 24.18 provides that all dividends declared but unclaimed may (in the case of dividends not to be distributed as money) be realized into money and (in any case) be invested for the benefit of the Company until claimed or until required to be dealt with under any applicable law dealing with unclaimed money. | |
• | Clause 5.6 provides that if a call in relation to a share is due and payable and not paid, the shareholder has no right to receive any dividends and has no right to vote. | |
• | Clause 10A.2(a) provides that the Class B shareholders do not have any voting rights. | |
• | Clause 13.2 provides that each shareholder who is entitle to vote on a resolution (where not disqualified from voting pursuant to the Listing Rules or the Act) has one vote on voting by voice or show of hands, and on a poll he has the number of votes equal to the number of fully paid shares held by that person. | |
• | Under clause 15.3, one third of the directors (excluding the managing director) retire by rotation each year and are eligible for re-election. | |
• | Clause 27.3 provides that after distribution of assets to repay paid up capital any surplus assets will be distributed to the shareholders in proportion to the amount paid up by the shareholder on each share, save to the extent that the terms of issue of a share provide otherwise. | |
• | Clause 10A.2(d) provides that the Class B shares are redeemable at the option of the Company for consideration of K100 per million (or part thereof) of those shares. | |
• | Clause 2.6(b) provides that the Company is authorized to redeem any redeemable shares subject to the provisions of the Listing Rules and the securities clearing house business rules of Australia. | |
• | There are no provisions in the constitution in relation to sinking funds. | |
• | Clause 5 provides that the Board may make calls on a shareholder in respect of any or all of the amount unpaid on the share unless the terms of issue make that payment payable at a fixed time. The constitution does not expose the shareholders to any liability to further capital calls by the Company. | |
• | There are no provisions discriminating against any existing or prospective holder of such securities as a result of such shareholder owning a substantial number of shares in the constitution. |
133
Table of Contents
• | Under the Companies Act, any provision of the constitution can be altered by special resolution of the shareholders requiring a 75% majority vote of those attending and voting. | |
• | Clause 8.2 provides that where the Company by ordinary shareholders’ resolution consolidates, divides or sub-divides its shares, the Company may also by special resolution determine that, as between the shares resulting from the consolidation, division or sub-division, one or more of those shares has some preference or special advantage as regards dividends, capital, voting or otherwise over or compared with the other shares. | |
• | Clause 8.3 provides that if the shares are divided into different classes of shares, the rights attached to any class of shares may only be varied or abrogated with either the written consent of 75% of the shareholders of that class, or, sanction of a special resolution passed at a separate meeting of that class of shareholders. | |
• | Clause 8.4 provides that the board may do anything to give effect to any resolution authorizing or effecting the alteration of the share capital of the Company, the variation or abrogation of rights attaching to any class of shares, or to adjust the rights of all parties. | |
• | Clause 11.3 provides that the board may convene a special meeting of the Company at any time. Alternatively, clause 11.4 provides that the shareholders may requisition the holding of a special meeting as provided by section 102(b) of the Companies Act, which requires a written request of shareholders holding shares carrying not less than 5% of the voting rights. | |
• | Clause 11.2 provides that the Company must hold an annual general meeting in accordance with the Companies Act, which must be held not later than 15 months after the previous annual general meeting. | |
• | Fourteen days’ written notice of the meeting must be sent to the shareholders, directors and auditor of the Company, stating the nature of the business, the text of any special resolution and, if required by the Official Listing Rules of the ASX, include a form of proxy. | |
• | All shareholders (including Class B shareholders) may attend a meeting of shareholders either in person, by proxy, by attorney or (in the case of a shareholder which is a body corporate) by a representative. | |
• | Clause 12.2 provides that no business may be transacted by a meeting of shareholders unless a quorum of three is present. Clause 12.3 provides that, where a quorum is not present within 30 minutes after the time appointed for the meeting, (in the case of a meeting requisitioned by shareholders), the meeting is dissolved, or in the case of any other meeting, it is adjourned to the same time and the same place the following week, and if there is not a quorum within 30 minutes of the appointed time of that meeting, it is dissolved. | |
In 1995, the Company was granted an exemption with respect to the quorum requirement under NASDAQ Rule 4350(f), which requires each issuer to provide for a quorum as specified in its by-laws for any meeting of the holders of common stock, which shall in no case be less than 33 1/3% of the outstanding shares of the Company’s common voting stock. The Company complied with the quorum requirements set forth in the previous paragraph. | ||
• | There are no limitations on rights to own securities, including the rights of non-resident or foreign shareholders to hold or exercise voting rights on the securities imposed by foreign law, or by the charter or other constituent document of the Company in the constitution. | |
• | There are no provisions in the constitution that would have an effect of delaying, deferring or preventing a change in control of the Company, and that would operate only with respect to a merger, acquisition or corporate restructuring involving the Company (or any of its subsidiaries). | |
• | There are no provisions in the constitution governing the ownership threshold above which shareholder ownership must be disclosed. |
134
Table of Contents
• | The Company is incorporated, and has its principal activities, in PNG. As such it is subject to the Companies Act, the Securities Act of PNG and the Takeovers Code under the Securities Act of PNG. The general effect of this legislation is referred to elsewhere in this Annual Report. | |
• | In relation to an increase in capital by the issue of new shares, clause 2.1 provides that this power is conferred on the board of directors subject to the listing rules of any applicable stock exchange (namely the Australian Securities Exchange, Port Moresby Stock Exchange and the NASDAQ Stock Exchange). The conditions in this regard are no more stringent than is required by law. There are no pre-emptive rights of existing shareholders. |
135
Table of Contents
136
Table of Contents
• | obtaining approvals from applicable regulatory bodies such as the Foreign Investment Review Board, the Australian Securities and Investments Commission, the ASX, POMSoX, NASDAQ, SEC, PNGSC and the TSX as appropriate; | ||
• | obtaining exchange control approval from the Bank of Papua New Guinea; | ||
• | under decree 96-634 of August 9, 1996 determining the terms of application of Law 95-553 of July 18, 1995 being the Mining Code of the Republic of the Ivory Coast, obtaining the authorization of theAdministration des Minesto implement the Scheme; | ||
• | obtaining Equigold shareholder approval of the Scheme at the scheme meeting by the requisite majorities under theCorporations Act;and | ||
• | obtaining Court approval of the Scheme in accordance with section 411(4)(b) of theCorporations Act. |
137
Table of Contents
(b) a contract with dnx PNG Ltd for the supply of services at the Lihir operation.
138
Table of Contents
139
Table of Contents
140
Table of Contents
a) | to comply with any conditions or approvals issued by the Central Bank before September 3, 2007; | |
b) | obtain prior approval from the Central Bank to operate a bank account outside PNG; | |
c) | to obtain prior approval from the Central Bank to give a guarantee or to grant security to a non-resident where there is no direct benefit to the resident entity or its business in PNG; and | |
d) | to report certain transactions (by lodgment of the prescribed forms) to the Central Bank for example reporting any physical commodity exports from PNG. |
a) | proceeds from the sale of mining products; | |
b) | the proceeds of bank loans and insurance policies in an aggregate amount, sufficient to pay threemonths anticipated loan servicing obligations; | |
c) | payments for goods and services to persons resident outside of PNG; | |
d) | dividends to non-PNG shareholders; and | |
e) | payments for certain approved reductions in share capital. |
141
Table of Contents
• | a dealer in securities; | |
• | a trader in securities that elects to use a mark-to-market method of accounting for securities holdings; | |
• | a tax-exempt organization; | |
• | a life insurance company; | |
• | a person liable for alternative minimum tax; | |
• | a person that actually or constructively owns 10% or more of our voting stock; | |
• | a person that holds shares or ADSs as part of a straddle or a hedging or conversion transaction; or | |
• | a person whose functional currency is not the U.S. dollar. |
• | a citizen or resident of the United States; | |
• | a domestic corporation; | |
• | an estate whose income is subject to United States federal income tax regardless of its source; or | |
• | a trust if a United States court can exercise primary supervision over the trust’s administration and one or more United States persons are authorized to control all substantial decisions of the trust. |
142
Table of Contents
143
Table of Contents
• | is domiciled in PNG, unless the person’s permanent place of abode is outside PNG; or | ||
• | has been in PNG for more than one half of the year of income, unless that person has a usual place of abode outside PNG and does not intend to take up residence in PNG. |
144
Table of Contents
• | if transferred through a stock broker registered to operate on the Port Moresby Stock Exchange, the transfer is exempt from stamp duty; | ||
• | otherwise at the rate of 1% of the value of the securities, payable by the purchaser or transferee. |
145
Table of Contents
Delivery | ||
Date | Ounces | |
31/03/2009 | 30,678 | |
30/06/2009 | 15,339 | |
30/09/2009 | 14,149 | |
31/12/2009 | 14,149 | |
31/03/2010 | 14,149 | |
30/06/2010 | 14,149 | |
30/09/2010 | 13,184 | |
115,797 | ||
146
Table of Contents
147
Table of Contents
• | Hired a taxation specialist with a strong background in interpreting and applying tax accounting literature, as well as the application of IFRS accounting principles to complex and non-routine transactions. | ||
• | Engaged external taxation consultants with the specialist skills in Papua New Guinea Tax law, to work with the above specialist on reviewing historic tax returns, and ensuring all returns are fully up to date. | ||
• | Strengthened reconciliation controls between tax and book values of assets. | ||
• | Improved the fixed asset register with greater functionality for recording tax vs. book value for assets. |
148
Table of Contents
§ | Code of Conduct | ||
§ | Conflicts of Interest Policy | ||
§ | Whistleblower Policy & Procedure | ||
§ | Market & Shareholder Communication Policy | ||
§ | Continuous Disclosure Policy | ||
§ | Board Communications Policy |
• | Compliance with laws | ||
• | Dealing with public officials | ||
• | Giving or receiving gifts or benefits | ||
• | Conflicts of interests | ||
• | Confidentiality | ||
• | Insider Trading | ||
• | Information Systems | ||
• | Financial controls and records | ||
• | Sustainability | ||
• | Equal Opportunity, employee harassment and discrimination | ||
• | Occupational Health and Safety |
149
Table of Contents
• | A definition of what is a “conflict of interest” | ||
• | A procedure to facilitate the disclosure of the conflict of interest | ||
• | A procedure to allow the standing notification of a conflict of interest; and | ||
• | Steps to be taken to handle the conflict of interest. |
• | A plain English description of the Company’s obligations under ASX Listing Rule 3.1 (the continuous disclosure obligation) and its parallel application on the other markets on which LGL securities are traded (namely POMSoX, NASDAQ and TSX). | ||
• | Commitments by LGL to use multiple delivery systems to ensure stakeholders are informed about the business, including email, internet and the LGL website. | ||
• | Initiatives to promote shareholder participation at general meetings including advanced notice, multimedia presentations, efficient streamlined proxy appointment processes and information sessions. | ||
• | A commitment by LGL to self-assess its corporate governance practices against the ASX Corporate Governance Council’s Principles for Good Corporate Governance and report the outcome in the LGL annual report. |
150
Table of Contents
• | A plain English definition of price sensitive information, including several examples. | ||
• | The establishment of a Disclosure Committee which is tasked with deciding what information is to be disclosed to the market, co-ordination of disclosure between the various markets, regulators, analysts and the website, overseeing the education of the business on LGL’s disclosure obligations and monitoring of compliance with this policy. The Disclosure Committee is made up of (a minimum of two of) the CEO, CFO, Group Secretary and GM Corporate Affairs. | ||
• | A process to follow for market speculation or rumors, including responding to regulator enquiries; and | ||
• | The policy on release of price sensitive information to analysts, investors and the media. |
(a) | any major events at an LGL’s operation likely to have a material impact on production or the general functioning of that operation (which may trigger the continuous disclosure policy). | ||
(b) | any significant event at an LGL’s operation that, may have the effect of reducing or limiting production or result in the urgent need for additional unforseen capital expenditure; | ||
(c) | any event which is likely to impact negatively on a supplier or contractor to LGL requiring LGL to either adopt contingencies or engage alternative suppliers; | ||
(d) | any significant safety, environmental, industrial or community incident; (e) financial matters that significantly affect the company or need to be discussed; | ||
(f) | industrial relations issues (or employment issues generally) that have the short term potential to negatively impact on an LGL operation (such as news of an impending strike); or | ||
(g) | any event that is considered prudent by Executive Employees or the Group Secretary to inform the Board. |
• | full fair and accurate timely disclosure in all reports and documents including all public communications; | ||
• | commitment to a work environment where the health, safety and well-being of employees, contractors, visitors and other parties affected by the Company’s operations are paramount; | ||
• | compliance with all laws, regulations and other requirements relating to all aspects of business and personal conduct within PNG and the countries with which the Company interacts; | ||
• | integrity, honesty, transparency and respect in all interactions (whether internal or with groups outside the Company) including with Lihirian and other representative groups in relation to issues important to the community; | ||
• | excellence in the management of environmental responsibilities to ensure minimisation of any adverse effects on the environment or impact on the local community; | ||
• | adoption of the highest standards of business administration, accountability and corporate governance, including the ethical use of all Company resources, funds, equipment, information and time; | ||
• | high standards of proprietary when dealing in any tradable securities of the Company, including shares, options and prescribed interests. | ||
• | fairness, within the framework of commitments to local community groups, to potential and existing employees in all areas of recruitment, training and administration of employee benefits; | ||
• | initiative and personal commitment by all employees, contractors and agents working on behalf of the Company, to the highest standards of work performance and the effective achievement of Company objectives; and | ||
• | accountability and willingness to take responsibility. |
151
Table of Contents
152
Table of Contents
(a) | review the performance of the external auditors at least annually and be responsible for recommending to the Board their appointment, re-appointment or termination; | |
(b) | review the scope of the annual audit program, or audit plan and approve the scope of the audit services to be provided; | |
(c) | review any engagement fees or terms proposed by the external auditors; | |
(d) | consider whether the external auditor’s provision of non-audit services to the Company and any other relationship between the external auditor and the Company (if any) is compatible with maintaining the independence and objectivity of the external auditor and maintaining the quality of the audit services provided; and | |
(e) | if applicable, take appropriate action in response to the external auditor’s report to satisfy itself of the external auditor’s independence for the purposes of making a recommendation to the Board. |
2008 Fees | 2007 Fees | 2006 Fees | ||||||||||
Services provided | $000 | $000 | $000 | |||||||||
Audit fees | 1,197 | 685 | 455 | |||||||||
Audit-related fees | 422 | 642 | 112 | |||||||||
Tax fees | 141 | 54 | 79 |
• | comfort letters; | ||
• | statutory audits; | ||
• | attest services; | ||
• | consents; and | ||
• | assistance with and review of documents filed with the SEC. |
• | employee benefit plan audits; | ||
• | due diligence related to mergers and acquisitions; | ||
• | accounting assistance and audits in connection with proposed or consummated acquisitions; | ||
• | internal control reviews; and | ||
• | consultations concerning financial accounting and reporting standards. |
• | tax compliance services, including the preparation of original and amended tax returns; |
153
Table of Contents
• | tax consultations, such as assistance and representation in connection with tax audits and appeals, tax advice related to mergers and acquisitions, employee benefit plans and requests for rulings or technical advice from taxing authorities; and | ||
• | tax planning services. |
Total number of | Maximum number (or | |||||||||||
shares purchased | approximate dollar value) of | |||||||||||
Average price | as part of publicly | shares that may yet be | ||||||||||
Total number of | paid per share | announced plans | purchased under the plans | |||||||||
Period | shares purchased | (A$) | or programs | or programs | ||||||||
September 2008 | 546,575(1) | $ | 2.74744 | 564,575 | Nil |
(1) | 546,575 shares purchased on market in accordance with the 2007 Lihir Executive Share Plan (LESP), announced by invitation letter to all participants dated January, 31 2007. For further information see “Item 6B. Compensation — (d) Share based compensation.” |
• | In 1995, the Company was granted an exemption with respect to the quorum requirement under NASDAQ Marketplace Rule 4350(f), now rule 5620, which requires each issuer to provide for a quorum as specified in its by-laws for any meeting of the holders of common stock, which shall in no case be less than 33 1/3% of the outstanding shares of the Company’s common voting stock. The Company complies with the quorum requirements set forth in Item 10.B (b) above. | ||
• | Rule 5605 requires independent directors to have regularly scheduled meetings at which only independent directors are present. During 2008, the Chairman organized two Non-Executive Director (NED) meeting sessions to facilitate NED discussions in the absence of management. NED sessions are regularly held in conjunction with scheduled Board meetings. |
154
Table of Contents
Table of Contents
“Alteration” | Change in the mineral composition of a rock | |
“Anhydrite” | Mineral form of calcium sulfate | |
“Argillic alteration” | Alteration composed of clay minerals | |
“Arsenopyrite” | A sulfide mineral of iron and arsenic | |
“Autoclave” | Vessel used for chemical reactions at high temperature and pressure; for example, to oxidize sulfide ore | |
“Autogenous threshold” | The level of sulfur feed at which the heat generated by oxidation of the sulfides is sufficient to propagate the reaction. | |
“Ball mill” | A mill using metal balls as the grinding medium | |
“BCM” | Bank Cubic Meter (a volume of material in its insitu state). | |
“Bench” | The horizontal floor along which mining progresses in a pit, also used to describe the horizontal segment between two such floors. The thickness of such a segment is referred to as the “bench height”. As the pit progresses to lower levels, safety benches are left in the walls to catch any rock falling from above. | |
“Brecciation; breccia” | Fracturing of pre-existing rocks by natural forces; a rock type formed in this manner | |
“Bullion” | Gold or silver in bars or ingots | |
“Calcining” | To reduce to a powder or friable state by heat | |
“Caldera” | Large basin shaped, typically circular crater resulting from volcanic activity | |
“Carbon-in-leach” | Method of extracting gold from solution using carbon | |
“Concentrate” | Material that has been processed to increase the content of contained metal or mineral relative to the contained waste | |
“Counter-current decantation” or “CCD” | The clarification and concentration of slurry material by the use of several thickeners in series, with the washing solution flowing in the opposite direction to the slurry | |
“Cut-off grade” | In resource/reserve estimation, the lowest grade of mineralized material that can be economically extracted | |
“Cyanidation” | A standard method of extracting gold and silver from crushed or ground mineralized rock using sodium cyanide | |
“Cyanide leaching” | The extraction of a precious metal from an ore by its dissolution in a cyanide solution | |
“Dilution” | Waste which is commingled with ore in the mining process |
156
Table of Contents
“Dore” | A mixture of gold and other metals, mostly silver, usually the raw metal produced from a precious metal mine | |
“Electro-winning” | The process of removal of gold from solution by the action of electric currents | |
“Elution” | The process of desorption (taking of gold from carbon) | |
“Epithermal” | A term applied to deposits formed at shallow depths from ascending solutions of moderate temperatures | |
“Exsolution” | To be removed from solution | |
“Feasibility study” | A technical and financial study of a project at sufficient level of accuracy and detail to allow a decision as to whether the project should proceed | |
“Flocculant” | An additive introduced to promote aggregation in a solution. | |
“Flotation” | The process of concentrating ground mineral particles by attaching them to air bubbles in a slurry using chemical reagents and recovering the mineralized froth generated by aeration | |
“Free gold” | Gold not chemically or physically entrapped and hence amenable to relatively simple extraction processes. | |
“Friable” | Said of a rock or mineral that crumbles naturally or is easily broken, pulverized, or reduced to powder, such as soft or poorly cemented sandstone. | |
“Fumaroles” | Vents in a volcanic region from which gases and vapors emanate at high temperatures | |
“GAAP” | Generally accepted accounting principles. | |
“Geochemistry” | The study of the variation of chemical elements in rocks and soils; a method of exploration based on this | |
“Geotechnical” | Pertaining to the engineering properties of rocks and soils | |
“Geothermal” | Pertaining to the heat of the earth’s interior | |
“Grade” | The metal (or mineral) content per unit of rock | |
“Grinding” | Reducing mineralized rock to the consistency of fine sand by crushing the abrading in a rotating steel grinding mill | |
“Gyratory Crusher” | A primary crusher consisting of a vertical spindle, the foot of which is mounted in an eccentric bearing within a conical shell. The top carries a conical crushing head revolving eccentrically in a conical maw. | |
“Hydrological” | Pertaining to the science of hydrology | |
“kPa” | A unit of pressure — an abbreviation for “kilopascals, gauge”. | |
“Joint venture” | An arrangement in which two entities unite to form a new, jointly-owned entity to achieve a specific purpose. |
157
Table of Contents
“Lime” | Calcium oxide; artificially made from limestone | |
“Limestone” | Rock composed mainly of calcium carbonate | |
“Lithology” | The physical characteristics of rock | |
“Mafic” | Descriptive of rocks containing or made up of ferro-magnesian minerals (usually dark in color) | |
“Magma; magmatic” | Liquid molten rock; pertaining to processes and rocks involving magma | |
“Marcasite” | Iron sulfide mineral (a form of pyrite) | |
“Metallurgy” | The science and technology of metals, usually pertaining to the processing of metals and minerals in mining | |
“Mill feed grade” | The grade of material feed to the mill, equivalent to received at mill | |
“Milling/mill” | The comminution of the ore, although the term has come to cover the broad range of machinery inside the treatment plant where economically valuable minerals are separated from the ore | |
“Mineable” | The portion of a resource for which extraction is technically and economically feasible | |
“Mineral deposit” | A mineralized underground body which has been intersected by a sufficient number of closely-spaced drill holes and/or underground sampling to support sufficient tonnage and ore grade to warrant further exploration or development; a mineral deposit or mineralized material does not qualify as a commercially mineable ore body (Reserves), as prescribed under standards of the Commission, until a final and comprehensive economic, technical, and legal feasibility study based upon the test results is concluded. | |
“Net smelter returns” | The value received for a mineral after refining, less the cost of transporting the mineral to the refinery and the cost of refining | |
“Open pit” | Surface mining in which the ore is extracted from a pit. The geometry of the pit may vary with the characteristics of the ore body. | |
“Ore” | Material that contains one or more minerals, at least one of which has commercial value and which can be recovered at a profit | |
“Ore body” | A continuous well defined mass of material of sufficient ore content to make extraction economically feasible | |
“Ore grade” | The average amount of the valuable metal or mineral contained in a specific mass of ore; for gold, this is usually expressed as troy ounces per short ton (2,000 pounds avoirdupois) or grams per tonne | |
“Ounces” | Troy ounces of 31.103 grams, or 1.097 Avoirdupois ounces | |
“Outcrop” | That part of a rock formation exposed on surface | |
“Oxide ore” | Gold ore that has been subjected to oxidation through natural weathering and surface water percolation to the extent that the minerals are readily treatable by standard processes |
158
Table of Contents
“Phyllic alteration” | Hydrothermal alteration of rocks involving the secondary formation of quartz and sericite | |
“Pit shell” | Designed outline of an open pit mine containing all the open pit ore reserves | |
“Pleistocene” | A subdivision of geologic time, about 10,000-2 million years before the present | |
“Potassic alteration” | Hydrothermal alteration of rock involving the secondary formation of potash feldspar, commonly the mineral orthoclase, usually with biotite | |
“Pressure oxidation” | A method of processing refractory sulfide ore | |
“Propylitic alteration” | Hydrothermal alteration of basic rocks involving the secondary formation of chlorite, epidote, calcite and sulfide | |
“Pyrite” | Iron sulfide mineral | |
“RC hole” | A reverse circulation drill hole produced by percussion drilling in which rock cuttings are recovered instead of core. “Reverse circulation” refers to the air flow which flows downward around the outside of the drill pipe, returning with the rock cuttings through the drill bit face and stem. | |
“Reactive sulfur” | In mineral processing involving pressure oxidation, sulfur in the form of sulfide | |
“Refining” | The final stage of metal production in which final impurities are removed from the molten metal by introducing air and fluxes. The impurities are removed as gases or slag | |
“Refractory ore” | Ore not amenable to standard processing techniques | |
“ROM” | Run of mine pads | |
“Sampling” | Taking small pieces of rock at intervals along exposed mineralization for assay (to determine the mineral content) | |
“SAG” | “Semi-autogenous grinding”, a method of comminution that utilizes the rock fragments to assist in the grinding process | |
“Seismic” | Pertaining to shock waves that pass through the earth | |
“Shotcreting” | Application by pressure spraying of a setting medium with the characteristics of concrete for stabilization of rock faces. | |
“Silt curtain” | A flooding barrier to be deployed offshore from watercourses, which causes temporary ponding of sediment laden fresh water within its confines to enhance settling, and mixing with sea water, as the turbid stream is forced underneath the barrier | |
“Slurry” | A fluid comprising fine solids suspended in a solution (generally water containing additives) | |
“Smelting” | Thermal processing whereby molten metal is liberated from beneficiated ore or concentrate with impurities separating as lighter slag |
159
Table of Contents
“Stockpile” | A store of unprocessed ore | |
“Stripping” | The process of removing overburden or waste to expose ore | |
“Stripping ratio” | In open pit mining, the ratio of waste material to ore, usually expressed as tonnes waste : tonnes ore | |
“Sulfide ore” | Ore characterized by the inclusion of metal in the crystal structure of a sulfide mineral. This type of ore is often refractory ore | |
“Superannuation fund” | A contributory pension fund. | |
“Surface mixed layer” | Uppermost layer of the ocean that is constantly mixed by wind and wave action | |
“Tailings” | The finely-ground waste product from ore processing | |
“Underground Mine” | Mining of an ore body beneath the earths surface where ore is recovered using trucks via a portal or hoisted via a shaft |
160
Table of Contents
“US$/ oz. Gold” | US dollars per troy ounce of gold | |
“US$/ t ore” | US dollars per tonne of ore | |
“C” | Degrees Celsius | |
“g Au/t” | Grams of gold per tonne | |
“ha” | Hectares | |
“kg” | Kilograms | |
“kg Au/t” | Kilograms of gold per tonne | |
“kPa” | kilo Pascals | |
“kt” | kilo tonnes | |
“m2” | Square meters | |
“m3” | Cubic meters | |
“mtpy” | Million tonnes per year | |
“t/d” | Tonnes per day | |
“t/h” | Tonnes per hour | |
Unit Equivalents | ||
“Celsius degrees” | (Fahrenheit degrees minus 32.0) times 5/9 | |
“1 cubic meter” | 35.314 cubic feet | |
“1 gram” | 0.03215 troy ounces | |
“1 gram Au/tonne” | 0.02917 troy ounces gold/short ton | |
“1 hectare” | 2.471 acres | |
“1 kilogram” | 2.205 pounds | |
“1 kilometer” | 0.62 statute miles | |
“1 kilopascal” | 0.145 pounds per square inch | |
“1 kilo tonne” | 1102.31 short tons | |
“1 meter” | 3.281 feet | |
“1 millimeter” | 0.039 inches | |
“1 square kilometer” | 0.3861 square miles | |
“1 square meter” | 10.764 square feet | |
“1 tonne” | 1.1023 short tons |
161
Table of Contents
F-A-1 | ||||
F-1 | ||||
F-2 | ||||
F-3 | ||||
F-5 | ||||
F-6 |
162
Table of Contents
ABN 52 780 433 757
Cuthbertson Street
PO Box 484
PORT MORESBY
PAPUA NEW GUINEA
Telephone (675) 321 1500
Facsimile (675) 321 1428
Website: www.pwc.com.pg
-F-A-1
Table of Contents
Port Moresby, Papua New Guinea
29 June 2009
-F-A-2
Table of Contents
$m | ||||||||||||||||
Note | 2008 | 2007(1) | 2006(1) | |||||||||||||
Revenue | 6 | 755.6 | 498.4 | 386.0 | ||||||||||||
Cost of sales | 8 | (451.3 | ) | (261.3 | ) | (211.0 | ) | |||||||||
Gross profit from mining operations | 304.3 | 237.1 | 175.0 | |||||||||||||
Corporate expense | (31.9 | ) | (25.3 | ) | (12.1 | ) | ||||||||||
Project studies | (2.6 | ) | (7.5 | ) | (0.8 | ) | ||||||||||
Exploration expense | (8.5 | ) | (8.4 | ) | (5.9 | ) | ||||||||||
Operating profit before other income / (expense) | 261.3 | 195.9 | 156.2 | |||||||||||||
Other income / (expense) | ||||||||||||||||
Hedging loss | 9 | (75.5 | ) | (97.2 | ) | (78.3 | ) | |||||||||
Other income | 10 | 0.3 | — | — | ||||||||||||
Other expenses | 10 | (31.3 | ) | (13.8 | ) | — | ||||||||||
Operating profit before finance costs | 154.8 | 84.9 | 77.9 | |||||||||||||
Financial income | 11 | 7.8 | 10.9 | 4.2 | ||||||||||||
Financial expenses | 11 | (0.6 | ) | (131.6 | ) | (6.2 | ) | |||||||||
Profit / (loss) before tax | 162.0 | (35.8 | ) | 75.9 | ||||||||||||
Income tax benefit / (expense) | 12 | (51.8 | ) | 11.7 | (21.0 | ) | ||||||||||
Net profit / (loss) after tax | 110.2 | (24.1 | ) | 54.9 | ||||||||||||
Attributable to equity holders of the Company | 109.3 | (24.1 | ) | 54.9 | ||||||||||||
Attributable to minority interests | 28 | 0.9 | — | |||||||||||||
110.2 | (24.1 | ) | 54.9 | |||||||||||||
Other comprehensive income | ||||||||||||||||
Exchange difference on translation of foreign operations | 27 | (158.5 | ) | 42.6 | — | |||||||||||
Net change in fair value of cash flow hedges | 27 | (32.7 | ) | (59.1 | ) | (50.8 | ) | |||||||||
Deferred loss on cash flow hedges | 27 | 76.7 | 97.8 | — | ||||||||||||
Net change in fair value of available for sale financial assets | 27 | (2.2 | ) | 1.2 | — | |||||||||||
Income tax on other comprehensive income | 12 | (30.6 | ) | (4.9 | ) | 20.4 | ||||||||||
Other comprehensive income for the period net of tax | (147.3 | ) | 77.6 | (30.4 | ) | |||||||||||
Total comprehensive income | (37.1 | ) | 53.5 | 24.5 | ||||||||||||
Attributable to equity holders of the Company | (38.0 | ) | 53.5 | 24.5 | ||||||||||||
Attributable to minority interests | 28 | 0.9 | — | — | ||||||||||||
(37.1 | ) | 53.5 | 24.5 | |||||||||||||
Earnings / (loss) per share | 39 | |||||||||||||||
- Basic (cents/share) | 5.3 | (1.4 | ) | 4.2 | ||||||||||||
- Diluted (cents/share) | 5.3 | (1.4 | ) | 4.2 |
(1) | Revised (refer Note 35) |
-F- 1 -
Table of Contents
$m | ||||||||||||||||
1 January | ||||||||||||||||
2007(1) | 2007(1) | |||||||||||||||
Note | 2008 | Revised | Revised | |||||||||||||
ASSETS | ||||||||||||||||
CURRENT ASSETS | ||||||||||||||||
Cash and cash equivalents | 13 | 64.7 | 174.2 | 47.0 | ||||||||||||
Receivables | 15 | 21.0 | 14.9 | 4.6 | ||||||||||||
Inventories | 16 | 140.0 | 102.8 | 75.3 | ||||||||||||
Derivative financial instruments | 24 | (g) | 0.4 | — | 0.3 | |||||||||||
Other assets | 5.1 | 2.3 | 5.5 | |||||||||||||
Total current assets | 231.2 | 294.2 | 132.7 | |||||||||||||
NON-CURRENT ASSETS | ||||||||||||||||
Receivables | 15 | 0.4 | 0.4 | 0.5 | ||||||||||||
Inventories | 16 | 255.0 | 169.1 | 141.7 | ||||||||||||
Derivative financial instruments | 24 | (g) | 0.3 | — | 2.4 | |||||||||||
Deferred mining costs | 17 | 259.5 | 218.3 | 148.3 | ||||||||||||
Property plant and equipment | 18 | 2,166.2 | 1,425.0 | 951.2 | ||||||||||||
Intangible assets | 19 | 417.3 | 93.5 | — | ||||||||||||
Available-for-sale financial assets | 20 | 2.3 | 2.5 | 33.0 | ||||||||||||
Deferred income tax asset | 12 | 31.6 | 101.3 | 93.6 | ||||||||||||
Investments in subsidiaries | 29 | — | — | — | ||||||||||||
Total non-current assets | 3,132.6 | 2,010.1 | 1,370.7 | |||||||||||||
Total assets | 3,363.8 | 2,304.3 | 1,503.4 | |||||||||||||
LIABILITIES | ||||||||||||||||
CURRENT LIABILITIES | ||||||||||||||||
Accounts payable & accrued liabilities | 21 | 102.1 | 64.0 | 46.6 | ||||||||||||
Provisions | 22 | 18.5 | 13.5 | 6.4 | ||||||||||||
Borrowings and finance facilities | 23 | 0.3 | 0.3 | 62.5 | ||||||||||||
Derivative financial instruments | 24 | (g) | 33.5 | — | 61.5 | |||||||||||
Income tax payable | — | — | 0.3 | |||||||||||||
Deferred settlement payable | 25 | 10.8 | — | — | ||||||||||||
Total current liabilities | 165.2 | 77.8 | 177.3 | |||||||||||||
NON-CURRENT LIABILITIES | ||||||||||||||||
Provisions | 22 | 36.8 | 15.2 | 14.2 | ||||||||||||
Borrowings and finance facilities | 23 | 0.2 | 0.7 | 218.6 | ||||||||||||
Derivative financial instruments | 24 | (g) | 18.9 | — | 274.0 | |||||||||||
Deferred income tax liability | 12 | 215.2 | 42.1 | — | ||||||||||||
Total non-current liabilities | 271.1 | 58.0 | 506.8 | |||||||||||||
Total liabilities | 436.3 | 135.8 | 684.1 | |||||||||||||
NET ASSETS | 2,927.5 | 2,168.5 | 819.3 | |||||||||||||
EQUITY | ||||||||||||||||
Share capital | 26 | 3,080.0 | 2,319.7 | 1,027.1 | ||||||||||||
Reserves | 27 | (312.6 | ) | (170.0 | ) | (250.7 | ) | |||||||||
Retained earnings | 27 | 128.1 | 18.8 | 42.9 | ||||||||||||
Total equity attributable to equity holders of the Company | 2,895.5 | 2,168.5 | 819.3 | |||||||||||||
Minority interests | 28 | 32.0 | — | — | ||||||||||||
TOTAL EQUITY | 2,927.5 | 2,168.5 | 819.3 | |||||||||||||
(1) | Revised (refer Note 35) |
-F- 2 -
Table of Contents
Attributable to equity holders of the Company | ||||||||||||||||||||||||
Issued | Retained | Minority | Total | |||||||||||||||||||||
Capital | Reserves | Earnings | Total(1) | interest | Equity(1) | |||||||||||||||||||
$m | $m | $m | $m | $m | $m | |||||||||||||||||||
Balance at 1 January 2006 | 1,027.5 | (225.7 | ) | (18.3 | ) | 783.5 | — | 783.5 | ||||||||||||||||
Correction of prior year error | — | — | 6.3 | 6.3 | — | 6.3 | ||||||||||||||||||
Revised balance(1) | 1,027.5 | (225.7 | ) | (12.0 | ) | 789.8 | — | 789.8 | ||||||||||||||||
Total comprehensive income / (expense) for the period(1) | — | (30.4 | ) | 54.9 | 24.5 | — | 24.5 | |||||||||||||||||
Share based payments to employees and other parties | — | 5.5 | — | 5.5 | — | 5.5 | ||||||||||||||||||
Deferred tax on share based payments to employees | — | (0.1 | ) | — | (0.1 | ) | — | (0.1 | ) | |||||||||||||||
Purchase of treasury shares | (0.4 | ) | — | — | (0.4 | ) | — | (0.4 | ) | |||||||||||||||
Balance at 31 December 2006 | 1,027.1 | (250.7 | ) | 42.9 | 819.3 | — | 819.3 | |||||||||||||||||
Balance at 1 January 2007 | 1,027.1 | (250.7 | ) | 42.9 | 819.3 | — | 819.3 | |||||||||||||||||
Total comprehensive income / (expense) for the period(1) | — | 77.6 | (24.1 | ) | 53.5 | — | 53.5 | |||||||||||||||||
Share based payments to employees | — | 2.9 | — | 2.9 | — | 2.9 | ||||||||||||||||||
Deferred tax on share based payments to employees | — | 0.2 | — | 0.2 | — | 0.2 | ||||||||||||||||||
Issue of shares — on acquisition of Ballarat | 316.5 | — | — | 316.5 | — | 316.5 | ||||||||||||||||||
Issue of shares — rights issue/placement (net of transaction costs) | 977.4 | — | — | 977.4 | — | 977.4 | ||||||||||||||||||
Purchase of treasury shares | (1.3 | ) | — | — | (1.3 | ) | — | (1.3 | ) | |||||||||||||||
Balance at 31 December 2007 | 2,319.7 | (170.0 | ) | 18.8 | 2,168.5 | — | 2,168.5 | |||||||||||||||||
Balance at 1 January 2008 | 2,319.7 | (170.0 | ) | 18.8 | 2,168.5 | — | 2,168.5 | |||||||||||||||||
Total comprehensive income / (expense) for the period | — | (147.3 | ) | 109.3 | (38.0 | ) | 0.9 | (37.1 | ) | |||||||||||||||
Share based payments to employees | — | 4.7 | — | 4.7 | — | 4.7 | ||||||||||||||||||
Deferred tax on share based payments to employees | — | 0.8 | — | 0.8 | — | 0.8 |
-F- 3 -
Table of Contents
Attributable to equity holders of the Company | ||||||||||||||||||||||||
Issued | Retained | Minority | Total | |||||||||||||||||||||
Capital | Reserves | Earnings | Total(1) | interest | Equity(1) | |||||||||||||||||||
$m | $m | $m | $m | $m | $m | |||||||||||||||||||
Minority interest on acquisition of subsidiaries | — | — | — | — | 49.1 | 49.1 | ||||||||||||||||||
Purchase of minority interests | — | 4.4 | — | 4.4 | (18.0 | ) | (13.6 | ) | ||||||||||||||||
Issue of shares — on acquisition of Equigold NL | 756.0 | — | — | 756.0 | — | 756.0 | ||||||||||||||||||
Issue of shares — MRL Capital Limited | 5.2 | (5.2 | ) | — | — | — | — | |||||||||||||||||
Purchase of treasury shares | (0.9 | ) | — | — | (0.9 | ) | — | (0.9 | ) | |||||||||||||||
Balance at 31 December 2008 | 3,080.0 | (312.6 | ) | 128.1 | 2,895.5 | 32.0 | 2,927.5 | |||||||||||||||||
(2) | Revised (refer Note 35) |
-F- 4 -
Table of Contents
$m | ||||||||||||||||
Note | 2008 | 2007 | 2006 | |||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||||||
Receipts from customers | 747.7 | 472.4 | 329.3 | |||||||||||||
Payments arising from suppliers & employees | (539.7 | ) | (365.9 | ) | (268.7 | ) | ||||||||||
Cash generated from operations | 208.0 | 106.5 | 60.6 | |||||||||||||
Purchase of gold to close out hedge book | — | (648.4 | ) | — | ||||||||||||
Receipts on close out of hedge book | — | 279.9 | — | |||||||||||||
Income tax refund received | 4.6 | — | — | |||||||||||||
Interest and finance charges paid | (0.2 | ) | (8.0 | ) | (3.3 | ) | ||||||||||
Net cash flow from operating activities | 14 | 212.4 | (270.0 | ) | 57.3 | |||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||||||
Interest received | 3.5 | 9.7 | 1.4 | |||||||||||||
Purchase of property plant and equipment | (277.9 | ) | (206.7 | ) | (170.8 | ) | ||||||||||
Interest and financing charges capitalized | (2.9 | ) | — | — | ||||||||||||
Proceeds on disposal of property, plant & equipment | 0.1 | — | 0.1 | |||||||||||||
Payments for acquisition of minority interests | (2.8 | ) | — | — | ||||||||||||
Payments for investments | — | (1.2 | ) | (34.0 | ) | |||||||||||
Acquisition of subsidiary net of cash acquired | 30 | 9.1 | 19.6 | — | ||||||||||||
Net cash flow from investing activities | (270.9 | ) | (178.6 | ) | (203.3 | ) | ||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||||||
Drawdown of secured debt | — | 22.4 | 65.6 | |||||||||||||
Repayment of secured debt | (0.4 | ) | (88.2 | ) | — | |||||||||||
Repayment of gold loan | — | (333.4 | ) | — | ||||||||||||
Proceeds of equity issue | — | 989.0 | — | |||||||||||||
Underwriting expenses | — | (11.6 | ) | — | ||||||||||||
Advance to subsidiary pre acquisition | (49.7 | ) | — | — | ||||||||||||
Payment for treasury shares | (0.9 | ) | (1.3 | ) | (0.4 | ) | ||||||||||
Net cash flow from financing activities | (51.0 | ) | 576.9 | 65.2 | ||||||||||||
Net increase / (decrease) in cash and cash equivalents | (109.5 | ) | 128.3 | (80.8 | ) | |||||||||||
Cash and cash equivalents at beginning of year | 174.2 | 47.0 | 127.8 | |||||||||||||
Effects of exchange rate changes to cash held | — | (1.1 | ) | — | ||||||||||||
Cash and cash equivalents at end of year | 13 | 64.7 | 174.2 | 47.0 | ||||||||||||
-F- 5 -
Table of Contents
1. | derivative financial instruments are measured at fair value | |
2. | financial instruments at fair value through profit and loss are measured at fair value | |
3. | available for sale financial assets are measured at fair value. |
-F- 6 -
Table of Contents
-F- 7 -
Table of Contents
-F- 8 -
Table of Contents
Approximate | Approximate | |||||||||||
percentage | percentage | |||||||||||
depreciated as | depreciated as | |||||||||||
Fixed asset classification | unit-of-use | straight-line | Depreciation rate | |||||||||
Deferred expenditure | 100 | % | — | Based on applicable reserves | ||||||||
Land & buildings | 100 | % | — | Based on applicable reserves | ||||||||
Plant & equipment | 85 | % | 15 | % | 2 – 20 years | |||||||
Total average | 90 | % | 10 | % | — |
-F- 9 -
Table of Contents
-F- 10 -
Table of Contents
-F- 11 -
Table of Contents
-F- 12 -
Table of Contents
(1) | hedges of the fair value of recognised assets, liabilities or firm commitments (fair value hedge); | |
(2) | hedges of a particular cash flow risk associated with a recognised asset, liability or highly probable forecast transaction (cash flow hedge); or | |
(3) | hedges of a net investment in a foreign operation (net investment hedge). |
-F- 13 -
Table of Contents
-F- 14
Table of Contents
1. | The Lihir Executive Share Plan (the “LESP”), which provides benefits to the executives of the Company; and | |
2. | Share issues made to local Lihirian landowners through MRL Capital Limited (“MRL”). |
-F- 15 -
Table of Contents
1. | the product is in a form suitable for delivery and no further processing is required by, or on behalf of, the Consolidated Entity; | |
2. | the quantity and quality (grade) of the product can be determined with reasonable accuracy; | |
3. | the product has been dispatched to the customer and is no longer under the physical control of the Consolidated Entity (or property in the product has earlier passed to the customer); | |
4. | the selling price can be measured reliably; | |
5. | it is probable that the economic benefits associated with the transaction will flow to the Consolidated Entity; and | |
6. | the costs incurred or to be incurred in respect of the transaction can be measured reliably. |
-F- 16 -
Table of Contents
1. | cash on hand and at call deposits with banks or financial institutions, net of bank overdrafts; and | |
2. | investments in money market instruments with less than 90 days to maturity from the date of acquisition. |
-F- 17 -
Table of Contents
-F- 18 -
Table of Contents
1. | Assets and liabilities for each Statements of Financial Position presented are translated at the closing rate at the date of that Statements of Financial Position | |
2. | Income and expenses for each Statements of Comprehensive Income are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and | |
3. | All resulting exchange differences are recognised in the foreign currency translation reserve. |
-F- 19 -
Table of Contents
-F- 20 -
Table of Contents
• | a resource and resource potential review conducted by independent experts appropriately qualified to opine on the existing exploration and drilling data and take into account other factors in forming their opinions; | ||
• | announcements regarding the asset have been sufficiently scrutinised by a JORC recognised Competent Person with sufficient experience relevant to the style of mineralisation and the type of deposit under consideration; | ||
• | clear delineation from drilling of multiple repeats of mineralised faults and structures that hosted ore bodies in the upper levels of the mine that were historically extracted. The drilling intersections are of sufficient tenor to provide confidence of continuity of mineralisation and/or repetition along strike and down dip; | ||
• | historical records of mining at the Ballarat field revealed production in excess of 11 million ounces of gold. Of this, 1.7 million ounces were produced from geological structures similar to those identified in recent drilling below the old workings; | ||
• | a well documented history of previous production and work on stope modelling had given a good indication of the grade and size of individual ore lenses. This information had been used to model the shape of likely ore lenses intersected by drilling; | ||
• | drilling undertaken by Ballarat Goldfields NL prior to the Company’s acquisition had successfully intersected multiple repeats of mineralised faults and structures that hosted ore zones in the upper levels of the mine; ore from these upper level zones had been successfully extracted in the past. The drilling intersections were of sufficient spacing and frequency to provide some confidence about continuity of mineralisation below the historically mined ore zones; | ||
• | independent technical evaluation of the mineral assets of Ballarat Goldfields prepared by Grant Samuel & Associates in November 2006; | ||
• | the successful conversion of inferred resource into higher resource categories as drilling density increases from resource definition drilling to stope delineation drilling; | ||
• | positive results from trial mining and pilot processing plant which during 2008 yielded 10,366oz of gold; | ||
• | at the time of acquisition, Ballarat was deemed to be in the development phase, with underground decline development and trial mining of the first stopes being undertaken, along with trial processing of small parcels of ore. A significant effort had been expended over several years to develop a model which accurately predicts the resource boundaries and the mineable ore. Drilling results were supportive of the veracity of the model, and preliminarly trial mining had indicated mineralization was present in the structures expected. |
-F- 21 -
Table of Contents
-F- 22 -
Table of Contents
Preliminary assessment on the | Application date for | |||||||||
Application date | impact of the Consolidated | the Consolidated | ||||||||
Reference | Title | Summary | of standard | Entity’s financial report | Entity | |||||
IFRS 2 | Share-based Payment | Amendment relating to vesting conditions and cancellations | Annual period beginning on or after 1 January 2009 | The Consolidated Entity has share-based payment transactions that may be affected by these amendments. The Consolidated Entity has yet to determine the extent of the impact, if any. | Annual period beginning on or after 1 January 2009 | |||||
IFRS 3 | Business Combinations | Comprehensive revision on applying the acquisition method | Annual periods beginning on or after 1 July 2009 | This amendment will impact the accounting for future business combinations effected after adoption of the revised accounting standard. | Annual periods beginning on or after 1 July 2009 | |||||
IFRS 7 | Financial Instruments: Disclosures. | Amendments for disclosure of eligible hedged items. | Annual periods beginning on or after 1 July 2009. | IFRS 7 is a disclosure standard so will have no direct impact on the amounts disclosed in the Consolidated Entity’s financial statements. | Annual periods beginning on or after 1 July 2009. | |||||
IAS 1 | Presentation of Financial Statements | Amendments relating to disclosure of puttable instruments and obligations arising on liquidation | Annual periods beginning on or after 1 January 2009 | At present the Consolidated Entity has no puttable financial instruments as defined under IAS 32 therefore the amendment would have no impact for the Consolidated Entity as at 31 December 2008. | Annual periods beginning on or after 1 January 2009 | |||||
IAS 27 | Consolidated and Separate Financial Statements | Consequential amendments arising from amendments to IFRS 3 | Annual periods beginning on or after 1 July 2009 | This amendment will impact the accounting for future business combinations effected after adoption of the revised accounting standard. | Annual periods beginning on or after 1 July 2009 | |||||
IAS 28 | Investments in Associates | Consequential amendments arising from amendments to IFRS 3 | Annual periods beginning on or after 1 July 2009 | This amendment will impact the accounting for future business combinations effected after adoption of the revised accounting standard. | Annual periods beginning on or after 1 July 2009 |
-F- 23 -
Table of Contents
Preliminary assessment on the | Application date for | |||||||||
Application date | impact of the Consolidated | the Consolidated | ||||||||
Reference | Title | Summary | of standard | Entity’s financial report | Entity | |||||
IAS 31 | Interest in Joint Ventures | Consequential amendments arising from amendments to IFRS 3 | Annual periods beginning on or after 1 July 2009 | This amendment will impact the accounting for future business combinations effected after adoption of the revised accounting standard. | Annual periods beginning on or after 1 July 2009 | |||||
IAS 32 | Financial Instruments: Presentation | Amendments relating to puttable instruments and obligations arising from liquidation | Annual periods beginning on or after 1 January 2009 | At present the Consolidated Entity has no puttable financial instruments as defined under IAS 32 therefore the amendment would have no impact for the Consolidated Entity as at 31 December 2008. | Annual periods beginning on or after 1 January 2009 | |||||
IAS 39 | Financial Instruments: Recognition and Measurement. | Amendments for eligible hedged items. | Annual periods beginning on or after 1 July 2009. | The Consolidated Entity has not yet determined the extent of the impact of these amendments, if any. | Annual periods beginning on or after 1 July 2009. | |||||
IFRIC 15 | Agreements for the construction of real estate. | This interpretation provides clarification of the accounting for agreements for the construction of real estate. | Annual periods beginning on or after 1 January 2009. | Not applicable | Annual periods beginning on or after 1 January 2009. | |||||
IFRIC 16 | Hedges of a net investment in a foreign operation. | This interpretation provides clarification for the accounting for hedges of a net investment in a foreign operation. | Annual periods beginning on or after 1 October 2009. | The Consolidated Entity has not yet determined the extent of the impact of these amendments, if any. | Annual periods beginning on or after 1 October 2009. | |||||
IFRIC 17 | Guidance on distributions of non-cash items to owners | This interpretation provides clarification for the accounting for distributions of non cash items to owners | Annual periods beginning on or after 1 July 2009. | Not applicable | Annual periods beginning on or after 1 July 2009. |
-F- 24 -
Table of Contents
Preliminary assessment on the | Application date for | |||||||||
Application date | impact of the Consolidated | the Consolidated | ||||||||
Reference | Title | Summary | of standard | Entity’s financial report | Entity | |||||
Amendments to IFRS | Various | Improvements to International Financial Reporting Standards | Annual periods beginning on or after 1 January 2009 | The Consolidated Entity has not yet determined the extent of the impact of these amendments, if any. | Annual periods beginning on or after 1 January 2009 |
• | Interest revenue | ||
• | Finance costs | ||
• | Hedging gains or losses | ||
• | Income taxes | ||
• | Corporate expenses |
-F- 25 -
Table of Contents
• | Cash and cash equivalents | ||
• | Current and deferred tax balances | ||
• | Interest bearing loans and borrowings | ||
• | Derivative financial instruments | ||
• | Assets and liabilities of the corporate office |
-F- 26 -
Table of Contents
Australia | ||||||||||||||||||||||||
Papua | (Mount | Total | ||||||||||||||||||||||
New | Rawdon/ | Australia | Consolidated | |||||||||||||||||||||
Profit and loss | Guinea | Kirkalocka) | (Ballarat) | Africa | Unallocated | Entity | ||||||||||||||||||
Year ended 31 December 2008 | US$m | US$m | US$m | US$m | US$m | US$m | ||||||||||||||||||
Revenue from external customers | 667.1 | 60.0 | 7.0 | 21.5 | — | 755.6 | ||||||||||||||||||
Cost of sales (excluding depreciation and amortisation) | (322.3 | ) | (33.2 | ) | (7.0 | ) | (5.0 | ) | 1.0 | (366.5 | ) | |||||||||||||
Mine EBITDA | 344.8 | 26.8 | — | 16.5 | 1.0 | 389.1 | ||||||||||||||||||
Non-cash cost of sales | ||||||||||||||||||||||||
Depreciation and amortisation of mineral reserves | — | (14.2 | ) | — | (12.0 | ) | — | (26.2 | ) | |||||||||||||||
Other depreciation and amortisation | (66.0 | ) | (1.9 | ) | — | (7.7 | ) | (0.9 | ) | (76.5 | ) | |||||||||||||
(66.0 | ) | (16.1 | ) | — | (19.7 | ) | (0.9 | ) | (102.7 | ) | ||||||||||||||
Change in inventories and deferred waste | 15.2 | — | — | 2.8 | — | 18.0 | ||||||||||||||||||
Gross profit from mining activities | 294.0 | 10.7 | — | (0.5 | ) | 0.1 | 304.3 | |||||||||||||||||
Corporate expense | — | — | — | (0.9 | ) | (31.0 | ) | (31.9 | ) | |||||||||||||||
Project studies | (2.6 | ) | — | — | — | — | (2.6 | ) | ||||||||||||||||
Exploration expense | (5.8 | ) | — | (0.4 | ) | (2.3 | ) | — | (8.5 | ) | ||||||||||||||
Operating profit / (loss) before other income / (expense) | 285.6 | 10.7 | (0.4 | ) | (3.7 | ) | (30.9 | ) | 261.3 | |||||||||||||||
Hedging profit / (loss) | — | — | — | — | (75.5 | ) | (75.5 | ) | ||||||||||||||||
Other income and (expenses) | (28.0 | ) | — | — | — | (3.0 | ) | (31.0 | ) | |||||||||||||||
Net finance costs | — | — | — | — | 7.2 | 7.2 | ||||||||||||||||||
Profit / (loss) before income tax | 257.6 | 10.7 | (0.4 | ) | (3.7 | ) | (102.2 | ) | 162.0 | |||||||||||||||
Income tax expense | (51.8 | ) | ||||||||||||||||||||||
Net profit / (loss) after tax | 110.2 | |||||||||||||||||||||||
Ounces produced (Kozs) | 772 | 63 | 10 | 37 | ||||||||||||||||||||
Total cash costs per ounce | 406 | 407 | — | 307 | ||||||||||||||||||||
Capital expenditure | 141 | 1 | 108 | 27 | 1 |
-F- 27 -
Table of Contents
Australia | ||||||||||||||||||||||||
Papua | (Mount | Total(1) | ||||||||||||||||||||||
New | Rawdon/ | Australia | Consolidated | |||||||||||||||||||||
Profit and loss | Guinea | Kirkalocka) | (Ballarat) | Africa | Unallocated | Entity | ||||||||||||||||||
Year ended 31 December 2007 | US$m | US$m | US$m | US$m | US$m | US$m | ||||||||||||||||||
Revenue from external customers | 497.6 | — | 0.8 | — | — | 498.4 | ||||||||||||||||||
Cost of sales (excluding depreciation and amortisation) | (224.5 | ) | — | (0.8 | ) | — | — | (225.3 | ) | |||||||||||||||
Mine EBITDA | 273.1 | — | — | — | — | 273.1 | ||||||||||||||||||
Non-cash cost of sales | ||||||||||||||||||||||||
Depreciation and amortisation of mineral reserves | — | — | — | — | — | — | ||||||||||||||||||
Other depreciation and amortisation | (50.3 | ) | — | — | — | (0.1 | ) | (50.4 | ) | |||||||||||||||
Change in inventories and deferred waste | 14.4 | — | — | — | — | 14.4 | ||||||||||||||||||
Gross profit from mining activities | 237.2 | — | — | — | (0.1 | ) | 237.1 | |||||||||||||||||
Corporate expense | — | — | — | — | (25.3 | ) | (25.3 | ) | ||||||||||||||||
Project studies | (7.5 | ) | — | — | — | — | (7.5 | ) | ||||||||||||||||
Exploration expense | (8.2 | ) | — | (0.2 | ) | — | — | (8.4 | ) | |||||||||||||||
Operating profit / (loss) before other income / (expense) | 221.5 | — | (0.2 | ) | — | (25.4 | ) | 195.9 | ||||||||||||||||
Hedging profit / (loss) | — | — | — | — | (97.2 | ) | (97.2 | ) | ||||||||||||||||
Other income and (expenses) | (13.0 | ) | — | — | — | 0.1 | (12.9 | ) | ||||||||||||||||
Net finance costs | — | — | — | — | (121.6 | ) | (121.6 | ) | ||||||||||||||||
Profit / (loss) before income tax | 208.5 | — | (0.2 | ) | — | (244.1 | ) | (35.8 | ) | |||||||||||||||
Income tax expense(1) | 11.7 | |||||||||||||||||||||||
Net profit / (loss) after tax | (24.1 | ) | ||||||||||||||||||||||
Ounces produced (Kozs) | 700 | 1.1 | ||||||||||||||||||||||
Total cash costs per ounce | 305 | — | ||||||||||||||||||||||
Capital expenditure | 149 | 58 |
Australia | ||||||||||||||||||||||||
Papua | (Mount | Total(1) | ||||||||||||||||||||||
New | Rawdon/ | Australia | Consolidated | |||||||||||||||||||||
Profit and loss | Guinea | Kirkalocka) | (Ballarat) | Africa | Unallocated | Entity | ||||||||||||||||||
Year ended 31 December 2006 | US$m | US$m | US$m | US$m | US$m | US$m | ||||||||||||||||||
Revenue from external customers | 386.0 | — | — | — | — | 386.0 | ||||||||||||||||||
Cost of sales (excluding depreciation and amortisation) | (181.7 | ) | — | — | — | — | (181.7 | ) | ||||||||||||||||
Mine EBITDA | 204.3 | — | — | — | — | 204.3 | ||||||||||||||||||
Non-cash cost of sales | ||||||||||||||||||||||||
Depreciation and amortisation of mineral reserves | — | — | — | — | — | — | ||||||||||||||||||
Other depreciation and amortisation | (37.3 | ) | — | — | — | (37.3 | ) | |||||||||||||||||
-F- 28 -
Table of Contents
Australia | ||||||||||||||||||||||||
Papua | (Mount | Total(1) | ||||||||||||||||||||||
New | Rawdon/ | Australia | Consolidated | |||||||||||||||||||||
Profit and loss | Guinea | Kirkalocka) | (Ballarat) | Africa | Unallocated | Entity | ||||||||||||||||||
Year ended 31 December 2006 | US$m | US$m | US$m | US$m | US$m | US$m | ||||||||||||||||||
Change in inventories and deferred waste | 8.0 | — | — | — | — | 8.0 | ||||||||||||||||||
Gross profit from mining activities | 175.0 | — | — | — | — | 175.0 | ||||||||||||||||||
Corporate expense | — | — | — | — | (12.1 | ) | (12.1 | ) | ||||||||||||||||
Project studies | (0.8 | ) | — | — | — | — | (0.8 | ) | ||||||||||||||||
Exploration expense | (5.9 | ) | — | — | — | (5.9 | ) | |||||||||||||||||
Operating profit / (loss) before other income / (expense) | 168.3 | — | — | — | (12.1 | ) | 156.2 | |||||||||||||||||
Hedging profit / (loss) | — | — | — | — | (78.3 | ) | (78.3 | ) | ||||||||||||||||
Other income and (expenses) | — | — | — | — | — | — | ||||||||||||||||||
Net finance costs | — | — | — | — | (2.0 | ) | (2.0 | ) | ||||||||||||||||
Profit / (loss) before income tax | 168.3 | — | — | — | (92.4 | ) | 75.9 | |||||||||||||||||
Income tax expense(1) | (21.0 | ) | ||||||||||||||||||||||
Net profit / (loss) after tax | 54.9 | |||||||||||||||||||||||
Ounces produced (Kozs) | 651 | — | — | — | — | |||||||||||||||||||
Total cash costs per ounce | 297 | — | — | — | — | |||||||||||||||||||
Capital expenditure | 171 | — | — | — | — |
Australia | ||||||||||||||||||||||||
Papua | (Mount | Total | ||||||||||||||||||||||
New | Rawdon/ | Australia | Consolidated | |||||||||||||||||||||
Guinea | Kirkalocka) | (Ballarat) | Africa | Unallocated | Entity | |||||||||||||||||||
Balance Sheet | US$m | US$m | US$m | US$m | US$m | US$m | ||||||||||||||||||
As at 31 December 2008 | ||||||||||||||||||||||||
Assets and liabilities | ||||||||||||||||||||||||
Segment assets | 1,745.1 | 203.1 | 476.6 | 667.2 | 271.8 | 3,363.8 | ||||||||||||||||||
Segment liabilities | (85.0 | ) | (24.6 | ) | (19.2 | ) | (13.2 | ) | (294.3 | ) | (436.3 | ) | ||||||||||||
As at 31 December 2007(1) | ||||||||||||||||||||||||
Assets and liabilities | ||||||||||||||||||||||||
Segment assets | 1,578.6 | — | 481.9 | — | 243.8 | 2,304.3 | ||||||||||||||||||
Segment liabilities | (79.2 | ) | — | (11.6 | ) | — | (45.0 | ) | (135.8 | ) | ||||||||||||||
As at 31 December 2006(1) | ||||||||||||||||||||||||
Assets and liabilities | ||||||||||||||||||||||||
Segment assets | 1,300.0 | — | 33.0 | — | 170.3 | 1,503.4 | ||||||||||||||||||
Segment liabilities | (348.6 | ) | — | — | — | (335.5 | ) | (684.1 | ) |
(1) | Revised (refer Note 35) |
-F- 29 -
Table of Contents
2008 | ||||||
Customer | $m | Segment reporting revenue | ||||
1 | 89.1 | Papua New Guinea / Africa | ||||
2 | 82.7 | Papua New Guinea | ||||
3 | 79.2 | Papua New Guinea | ||||
4 | 77.5 | Papua New Guinea |
2007 | ||||||
Customer | $m | Segment reporting revenue | ||||
1 | 86.6 | Papua New Guinea | ||||
2 | 55.1 | Papua New Guinea | ||||
3 | 52.3 | Papua New Guinea |
2006 | ||||||
Customer | $m | Segment reporting revenue | ||||
1 | 54.1 | Papua New Guinea | ||||
2 | 50.7 | Papua New Guinea | ||||
3 | 43.5 | Papua New Guinea | ||||
4 | 42.2 | Papua New Guinea | ||||
5 | 42.2 | Papua New Guinea | ||||
6 | 38.5 | Papua New Guinea |
$m | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
Gold sales | 749.7 | 493.0 | 384.4 | |||||||||
Silver sales | 1.4 | 0.1 | 1.6 | |||||||||
Other revenue(1) | 4.5 | 5.3 | — | |||||||||
755.6 | 498.4 | 386.0 | ||||||||||
(1) | Other revenue includes certified emission reduction certificate credits |
-F- 30 -
Table of Contents
$m | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
Equity settled share-based payment compensation | 4.7 | 2.9 | 0.5 | |||||||||
Other personnel expenses | 88.1 | 66.0 | 41.2 | |||||||||
92.8 | 68.9 | 41.7 | ||||||||||
$m | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
Operating costs | (459.5 | ) | (304.6 | ) | (237.5 | ) | ||||||
Royalties, levies & production taxes | (17.8 | ) | (13.2 | ) | (9.4 | ) | ||||||
Refining costs | (3.6 | ) | (0.5 | ) | (0.3 | ) | ||||||
Depreciation & amortisation | (102.7 | ) | (50.4 | ) | (37.3 | ) | ||||||
Deferred mining costs | 40.0 | 70.0 | 56.3 | |||||||||
Changes in inventories | 94.2 | 41.2 | 19.4 | |||||||||
Stores inventories obsolescence | (0.1 | ) | (0.8 | ) | (1.0 | ) | ||||||
Foreign exchange loss | (1.8 | ) | (3.0 | ) | (1.2 | ) | ||||||
(451.3 | ) | (261.3 | ) | (211.0 | ) | |||||||
$m | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
Cash hedging loss | (9.9 | ) | (21.4 | ) | (61.2 | ) | ||||||
Non-cash hedging loss(1) | (65.6 | ) | (75.8 | ) | (17.1 | ) | ||||||
(75.5 | ) | (97.2 | ) | (78.3 | ) | |||||||
(1) | 2008 amount of $75.5 million reflecting $76.7 million from the closed-out LGL hedge book in 2007 and the net effect, after fair value adjustments, of delivering into the acquired Equigold hedge book. |
$m | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
Other income | ||||||||||||
Other income | 0.3 | — | — | |||||||||
0.3 | — | — | ||||||||||
Other expenses | ||||||||||||
Impairment of listed equity securities(1) | (3.2 | ) | — | — | ||||||||
Property, plant and equipment disposal loss | (28.1 | ) | (13.8 | ) | — | |||||||
(31.3 | ) | (13.8 | ) | - | ||||||||
(1) | Listed share investments with a significant or prolonged decline in fair value below cost have been impaired. The impairment loss is equivalent to the difference in the listed market valuation at 31 December 2008 and the cost of the respective securities. |
-F- 31 -
Table of Contents
$m | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
Financial income | ||||||||||||
Interest income | 3.5 | 9.7 | 1.4 | |||||||||
Foreign exchange gain | 4.2 | — | — | |||||||||
Gold lease rate fees | — | 0.3 | 2.8 | |||||||||
Other income | 0.1 | 0.9 | — | |||||||||
7.8 | 10.9 | 4.2 | ||||||||||
Financial expenses | ||||||||||||
Loss on repayment of gold loan | — | (117.9 | ) | — | ||||||||
Foreign exchange loss | — | (5.8 | )(1) | — | ||||||||
Interest expense on debt facilities | — | (4.8 | ) | (1.5 | ) | |||||||
Other interest & financing | (0.6 | ) | (3.1 | ) | (4.7 | ) | ||||||
(0.6 | ) | (131.6 | ) | (6.2 | ) | |||||||
(1) | Represents realised foreign exchange in relation to un-favourable movements arising from receiving funds from the capital raising in A$ transaction and locking in the purchase cost of gold for the close out of the hedge book as well as settling other foreign denominated application of funds, including the repayment of debt facilities and investment in subsidiary. |
-F- 32 -
Table of Contents
$m | ||||||||||||
2008 | 2007(1) | 2006 | ||||||||||
Income Tax Expense | ||||||||||||
Current tax | — | — | 0.3 | |||||||||
— | — | 0.3 | ||||||||||
Deferred tax | 52.3 | (10.1 | ) | 22.5 | ||||||||
Under / (over) provided in prior years | (0.5 | ) | (1.6 | ) | (1.5 | ) | ||||||
51.8 | (11.7 | ) | 21.0 | |||||||||
Total income tax expense / (benefit) | 51.8 | (11.7 | ) | 21.0 | ||||||||
Numerical reconciliation of income tax expense to prima facie tax payable Profit / (loss) before tax | 162.0 | (35.8 | ) | 75.9 | ||||||||
Deduct Côte d’Ivoire profit not taxable under tax holiday | (4.4 | ) | — | — | ||||||||
157.6 | (35.8 | ) | 75.9 | |||||||||
Prima facie income tax expense on before tax profit at 30% | 47.3 | (10.7 | ) | 22.8 | ||||||||
Tax effect of amounts which are not deductible (taxable) in calculating taxable income | ||||||||||||
- Expenses not deductible / (Income not taxable) for tax purposes | 5.1 | 1.0 | (0.2 | ) | ||||||||
- Recognition of tax losses not previously recognized | — | (0.2 | ) | — | ||||||||
- Section 72A double deductions | (0.1 | ) | (0.2 | ) | (0.1 | ) | ||||||
52.3 | (10.1 | ) | 22.5 | |||||||||
Adjustment for current tax of prior periods | ||||||||||||
Over provided in prior years | (0.5 | ) | (1.6 | ) | (1.5 | ) | ||||||
Tax expense / (benefit) | 51.8 | (11.7 | ) | 21.0 | ||||||||
Deferred Income Tax | ||||||||||||
Deferred tax assets: | 230.8 | 244.4 | ||||||||||
230.8 | 244.4 | |||||||||||
Deferred tax liabilities: | (414.4 | ) | (185.3 | ) | ||||||||
(414.4 | ) | (185.3 | ) | |||||||||
Balance at beginning of year | 59.2 | 93.5 | ||||||||||
Credited / (charged) to profit and loss | (51.9 | ) | �� | 11.7 | ||||||||
Acquired on business combination | (188.0 | ) | (37.5 | ) | ||||||||
Translation adjustments | 27.7 | (3.8 | ) | |||||||||
Tax charged to equity | (30.6 | ) | (4.7 | ) | ||||||||
Balance at end of year | (183.6 | ) | 59.2 | |||||||||
Deferred tax asset — PNG | 31.6 | 101.3 | ||||||||||
Deferred tax — CDI | — | — | ||||||||||
Deferred tax liability — Australia | (215.2 | ) | (42.1 | ) |
(1) | Revised (refer Note 35) |
F-33
Table of Contents
Accelerated | ||||||||||||||||||||||||||||
tax | Provisions of | Mining | ||||||||||||||||||||||||||
Deferred tax assets: | depreciation | assets | Derivatives | Tax losses | tenements | Other(1) | Total(2) | |||||||||||||||||||||
At 1 January 2007 | — | 8.9 | 99.8 | 72.9 | — | 0.4 | 182.0 | |||||||||||||||||||||
Credited / (charged) to profit and loss | — | 3.1 | (0.3 | ) | 30.5 | — | 1.8 | 35.1 | ||||||||||||||||||||
Acquired on business combination | — | — | — | 29.3 | — | 2.9 | 32.2 | |||||||||||||||||||||
Credited / (charged) to equity | — | — | (99.5 | ) | 95.0 | — | (0.4 | ) | (4.9 | ) | ||||||||||||||||||
At 1 January 2008 | — | 12.0 | — | 227.7 | — | 4.7 | 244.4 | |||||||||||||||||||||
Credited / (charged) to profit and loss | — | (1.2 | ) | 0.1 | (20.6 | ) | — | (4.5 | ) | (26.2 | ) | |||||||||||||||||
Translation Adjustment | — | 2.3 | 3.9 | — | — | 1.0 | 7.2 | |||||||||||||||||||||
Acquired on business combination | — | 4.0 | 15.8 | — | — | 4.0 | 23.8 | |||||||||||||||||||||
Charged to equity | — | — | (4.1 | ) | (15.7 | ) | — | 1.4 | (18.4 | ) | ||||||||||||||||||
At 31 December 2008 | — | 17.1 | 15.7 | 191.4 | — | 6.6 | 230.8 | |||||||||||||||||||||
Accelerated | ||||||||||||||||||||||||||||||||
tax | Consuma | Deferred | Prepaid | Mining | ||||||||||||||||||||||||||||
Deferred tax liabilities: | depreciation | ble stores | mining | insurance | tenements | Derivatives | Other(1) | Total(2) | ||||||||||||||||||||||||
At 1 January 2007 | (40.6 | ) | (4.2 | ) | (44.5 | ) | (0.2 | ) | — | — | 1.0 | (88.5 | ) | |||||||||||||||||||
Charged/(credited) to profit and loss | 2.5 | (2.2 | ) | (21.5 | ) | (0.6 | ) | — | — | (1.5 | ) | (23.3 | ) | |||||||||||||||||||
Acquired on business combination | — | — | — | — | (66.8 | ) | — | (6.9 | ) | (73.7 | ) | |||||||||||||||||||||
(Credited)/charged to equity | — | — | — | — | — | — | 0.2 | 0.2 | ||||||||||||||||||||||||
At 1 January 2008 | (38.1 | ) | (6.4 | ) | (66.0 | ) | (0.8 | ) | (66.8 | ) | — | (7.2 | ) | (185.3 | ) | |||||||||||||||||
Charged/(credited) to profit and loss | (20.3 | ) | (8.3 | ) | (10.0 | ) | — | (0.4 | ) | (0.4 | ) | 13.7 | (25.6 | ) | ||||||||||||||||||
Translation Adjustment | — | — | (0.2 | ) | — | 20.4 | — | 0.3 | 20.5 | |||||||||||||||||||||||
Acquired on business combination | — | — | (0.9 | ) | — | (209.5 | ) | — | (1.4 | ) | (211.8 | ) | ||||||||||||||||||||
Charged to equity | — | — | — | — | — | — | (12.2 | ) | (12.2 | ) | ||||||||||||||||||||||
At 31 December 2008 | (58.4 | ) | (14.7 | ) | (77.1 | ) | (0.8 | ) | (256.3 | ) | (0.4 | ) | (6.8 | ) | (414.4 | ) | ||||||||||||||||
(1) | Other includes share-based payments | |
(2) | Revised (refer Note 35) |
-F- 34 -
Table of Contents
-F- 35 -
Table of Contents
$m | ||||||||||||
Before | Tax | |||||||||||
2008 | tax | effect | Net of tax | |||||||||
Exchange difference on translation of foreign operations | (158.5 | ) | (11.5 | ) | (170.0 | ) | ||||||
Deferred loss on cash flow hedges | 44.0 | (19.6 | ) | 24.4 | ||||||||
Net change in fair value of available for sale financial assets | (2.2 | ) | 0.5 | (1.7 | ) | |||||||
Other comprehensive income | (116.7 | ) | (30.6 | ) | (147.3 | ) | ||||||
$m | ||||||||||||
Before | Tax | |||||||||||
2007 | tax | effect | Net of tax | |||||||||
Exchange difference on translation of foreign operations | 42.6 | — | 42.6 | |||||||||
Deferred loss on cash flow hedges | 38.7 | (4.5 | ) | 34.2 | ||||||||
Net change in fair value of available for sale financial assets | 1.2 | (0.4 | ) | 0.8 | ||||||||
Other comprehensive income | 82.5 | (4.9 | ) | 77.6 | ||||||||
$m | ||||||||||||
Before | Tax | |||||||||||
2006 | tax | effect | Net of tax | |||||||||
Deferred loss on cash flow hedges | (50.8 | ) | 20.4 | (30.4 | ) | |||||||
Other comprehensive income | (50.8 | ) | 20.4 | (30.4 | ) | |||||||
$m | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
Cash at bank and on hand | 64.7 | 44.7 | 21.4 | |||||||||
Short-term deposits with financial institutions | — | 129.5 | 25.6 | |||||||||
64.7 | 174.2 | 47.0 | ||||||||||
-F- 36 -
Table of Contents
-F- 37 -
Table of Contents
$m | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
Reconciliation of cash flow from operating activities to operating profit after tax | ||||||||||||
Net profit / (loss) after tax | 110.2 | (24.1 | ) | 54.9 | ||||||||
Add back non-cash items: | ||||||||||||
Depreciation and amortisation | 102.7 | 50.4 | 37.3 | |||||||||
Fair value losses | — | 0.4 | 1.7 | |||||||||
Amortisation of deferred hedging costs (net) | — | — | 17.1 | |||||||||
Provision for doubtful debts | 0.7 | 1.3 | 0.4 | |||||||||
Non-cash hedging loss | 65.6 | 75.4 | — | |||||||||
Impairment losses | 3.2 | — | — | |||||||||
Other non-cash items | (0.8 | ) | (0.7 | ) | — | |||||||
Share based payment expenses | 4.7 | 2.9 | 0.6 | |||||||||
Hedge book restructure payments and receipts | ||||||||||||
Purchase of gold to close out hedge book | — | (648.4 | ) | — | ||||||||
Receipts on close out of hedge book | — | 279.9 | — | |||||||||
Add back items presented in investing or financing (Profit) / loss on disposal of assets | 27.9 | 13.8 | — | |||||||||
Interest income | (3.5 | ) | (9.7 | ) | (1.4 | ) | ||||||
Interest and financing costs | 0.2 | 117.9 | — | |||||||||
Change in operating assets and liabilities net of purchase of subsidiary and translation differences | ||||||||||||
(Increase) / decrease in debtors and prepayments | (8.0 | ) | (6.0 | ) | 0.1 | |||||||
(Increase) / decrease in inventories | (107.4 | ) | (54.3 | ) | (19.8 | ) | ||||||
(Increase) / decrease in deferred mining costs | (36.4 | ) | (70.0 | ) | (56.3 | ) | ||||||
Increase / (decrease) in operating payables | (1.8 | ) | 12.7 | (0.7 | ) | |||||||
Increase / (decrease) in operating provisions | (1.3 | ) | 7.1 | 2.9 | ||||||||
Increase / (decrease) in provision for income taxes payable | 4.6 | (0.3 | ) | 0.3 | ||||||||
Increase / (decrease) in provision for deferred income tax | 51.8 | (18.3 | ) | 20.2 | ||||||||
Net cash flow from operating activities | 212.4 | (270.0 | ) | 57.3 | ||||||||
$m | ||||||||||||
2008 | 2007 | |||||||||||
CURRENT | ||||||||||||
Other amounts receivable from third parties | 25.9 | 19.1 | ||||||||||
Less: Provision for impairment | (4.9 | ) | (4.2 | ) | ||||||||
Other debtors — related parties and controlled entities | — | — | ||||||||||
21.0 | 14.9 | |||||||||||
NON-CURRENT | ||||||||||||
Other debtors — related parties and controlled entities | — | — | ||||||||||
Other amounts receivable from third parties | 0.4 | 0.4 | ||||||||||
0.4 | 0.4 | |||||||||||
-F- 38 -
Table of Contents
$m | ||||||||||||
2008 | 2007 | |||||||||||
CURRENT | ||||||||||||
Stores at net realisable value | 74.2 | 55.8 | ||||||||||
Ore stockpiles | 47.7 | 39.9 | ||||||||||
Gold in circuit | 7.9 | 3.9 | ||||||||||
Finished goods | 10.2 | 3.2 | ||||||||||
140.0 | 102.8 | |||||||||||
NON-CURRENT | ||||||||||||
Ore stockpiles | 255.0 | 169.1 | ||||||||||
255.0 | 169.1 | |||||||||||
$m | ||||||||||||
2008 | 2007 | |||||||||||
NON-CURRENT | ||||||||||||
Deferred mining costs | 259.5 | 218.3 | ||||||||||
259.5 | 218.3 | |||||||||||
$m | ||||||||
2008 | 2007 | |||||||
Carrying amount at start of year | 218.3 | 148.3 | ||||||
- Acquired on business combination | 2.9 | — | ||||||
- Cash overburden costs attributable to current year mining activity | (7.7 | ) | (49.7 | ) | ||||
- Non-cash overburden costs attributable to current year mining activity(1) | (1.0 | ) | (10.5 | ) | ||||
- Total cash costs of material mined during the period (cash) | 41.7 | 110.8 | ||||||
- Total non-cash costs of material mined during the period | 6.2 | 19.4 | ||||||
- Translation adjustments | (0.9 | ) | — | |||||
Carrying amount at end of year | 259.5 | 218.3 | ||||||
(1) | Non-cash costs comprise depreciation and amortisation on operating property, plant and equipment. |
-F- 39 -
Table of Contents
$m | ||||||||||||
Note | 2008 | 2007(1) | ||||||||||
LAND AND BUILDINGS | ||||||||||||
Cost brought forward | 125.7 | 118.8 | ||||||||||
Transfers from capital works in progress | 9.5 | 5.8 | ||||||||||
Assets acquired through business combination | 30 | 1.5 | 1.0 | |||||||||
Translation adjustments | (0.9 | ) | 0.1 | |||||||||
Disposals | (1.9 | ) | — | |||||||||
Cost carried forward | 133.9 | 125.7 | ||||||||||
Depreciation brought forward | (31.6 | ) | (28.3 | ) | ||||||||
Disposals | 0.2 | — | ||||||||||
Charge for the year | (4.2 | ) | (3.3 | ) | ||||||||
Depreciation carried forward | (35.6 | ) | (31.6 | ) | ||||||||
Net book value | 98.3 | 94.1 | ||||||||||
PLANT AND EQUIPMENT | ||||||||||||
Cost brought forward | 965.9 | 701.2 | ||||||||||
Additions | 15.8 | 6.2 | ||||||||||
Transfers from capital works in progress | 217.4 | 278.9 | ||||||||||
Assets acquired through business combination | 30 | 27.2 | 2.6 | |||||||||
Translation adjustments | (7.9 | ) | 0.3 | |||||||||
Reclassification | — | (5.2 | ) | |||||||||
Disposals / transfers | (42.1 | ) | (18.1 | ) | ||||||||
Cost carried forward | 1,176.3 | 965.9 | ||||||||||
Depreciation brought forward | (283.0 | ) | (247.5 | ) | ||||||||
Charge for the year | (64.9 | ) | (38.3 | ) | ||||||||
Reclassification | — | 0.2 | ||||||||||
Disposals | 17.7 | 2.6 | ||||||||||
Depreciation carried forward | (330.2 | ) | (283.0 | ) | ||||||||
Net book value | 846.1 | 682.9 | ||||||||||
DEFERRED DEVELOPMENT(2) | ||||||||||||
Cost brought forward | 639.1 | 290.9 | ||||||||||
Additions | 105.1 | 41.6 | ||||||||||
Transfers from capital works in progress | 42.0 | 10.3 | ||||||||||
Assets acquired through business combination | 30 | 6.3 | 267.5 | |||||||||
Translation adjustments | (86.8 | ) | 28.8 | |||||||||
Disposals / transfers | (2.1 | ) | — | |||||||||
Cost carried forward | 703.6 | 639.1 | ||||||||||
Depreciation brought forward | (101.3 | ) | (93.2 | ) | ||||||||
Charge for the year | (12.9 | ) | (8.1 | ) | ||||||||
Disposals | 0.4 | — | ||||||||||
Depreciation carried forward | (113.8 | ) | (101.3 | ) | ||||||||
Net book value | 589.8 | 537.8 | ||||||||||
(1) | Revised (refer Note 35) |
-F- 40 -
Table of Contents
$m | ||||||||||||
Note | 2008 | 2007(1) | ||||||||||
MINE PROPERTIES | ||||||||||||
Cost brought forward | — | — | ||||||||||
Assets acquired through business combination | 30 | 624.1 | — | |||||||||
Translation adjustments | (67.7 | ) | — | |||||||||
Cost carried forward | 556.4 | — | ||||||||||
Depreciation brought forward | — | — | ||||||||||
Charge for the year | (26.2 | ) | — | |||||||||
Disposals | — | — | ||||||||||
Depreciation carried forward | (26.2 | ) | — | |||||||||
Net book value | 530.2 | — | ||||||||||
CAPITAL WORKS IN PROGRESS | ||||||||||||
Cost brought forward | 107.7 | 205.0 | ||||||||||
Additions | 183.2 | 171.5 | ||||||||||
Transfers | (268.9 | ) | (295.0 | ) | ||||||||
Assets acquired through business combination | 30 | 83.8 | 23.6 | |||||||||
Translation adjustments | (15.2 | ) | 2.6 | |||||||||
Costs carried forward | 90.6 | 107.7 | ||||||||||
REHABILITATION | ||||||||||||
Cost brought forward | 5.2 | 6.8 | ||||||||||
Assets acquired through business combination | 30 | 2.2 | — | |||||||||
Additions / (deductions) | 6.7 | (1.6 | ) | |||||||||
Cost carried forward | 14.1 | 5.2 | ||||||||||
Amortisation brought forward | (2.7 | ) | (2.5 | ) | ||||||||
Charge for the year | (0.2 | ) | (0.2 | ) | ||||||||
Amortisation carried forward | (2.9 | ) | (2.7 | ) | ||||||||
Net book value | 11.2 | 2.5 | ||||||||||
Total property, plant & equipment | 2,166.2 | 1,425.0 | ||||||||||
(1) | Revised (refer Note 35) | |
(2) | Development properties classification, totalling $302.0 million in 2007 financial statements reclassified as deferred development. |
-F- 41 -
Table of Contents
$m | ||||||||||||
Note | 2008 | 2007(1) | ||||||||||
MINING INFORMATION | ||||||||||||
Cost brought forward | 49.2 | �� | — | |||||||||
Acquired through business combination | 30 | — | 44.5 | |||||||||
Translation adjustments | (10.4 | ) | 4.7 | |||||||||
Cost carried forward | 38.8 | 49.2 | ||||||||||
Closing net book value | 38.8 | 49.2 | ||||||||||
EXPLORATION RIGHTS | ||||||||||||
Cost brought forward | 1.9 | — | ||||||||||
Acquired through business combination | 30 | 162.3 | 1.7 | |||||||||
Translation adjustments | (0.2 | ) | 0.2 | |||||||||
Cost carried forward | 164.0 | 1.9 | ||||||||||
Closing net book value | 164.0 | 1.9 | ||||||||||
LICENSES | ||||||||||||
Cost brought forward | 0.1 | — | ||||||||||
Acquired through business combination | 30 | — | 0.1 | |||||||||
Translation adjustments | (0.1 | ) | — | |||||||||
Cost carried forward | — | 0.1 | ||||||||||
Closing net book value | — | 0.1 | ||||||||||
GOODWILL | ||||||||||||
Cost brought forward | 35.3 | — | ||||||||||
Acquired through business combination | 30 | 165.2 | 31.7 | |||||||||
Translation adjustments | (7.2 | ) | 3.6 | |||||||||
Cost carried forward | 193.3 | 35.3 | ||||||||||
Closing net book value | 193.3 | 35.3 | ||||||||||
OTHER INTANGIBLE ASSETS | ||||||||||||
Cost brought forward | 7.7 | 5.2 | ||||||||||
Acquired through business combination | 30 | 16.2 | — | |||||||||
Disposals | (0.2 | ) | — | |||||||||
Additions | — | 2.5 | ||||||||||
Cost carried forward | 23.7 | 7.7 | ||||||||||
Amortisation brought forward | (0.7 | ) | (0.2 | ) | ||||||||
Charge for the year(2) | (1.8 | ) | (0.5 | ) | ||||||||
Amortisation carried forward | (2.5 | ) | (0.7 | ) | ||||||||
Closing net book value | 21.2 | 7.0 | ||||||||||
Total intangible assets | 417.3 | 93.5 | ||||||||||
(1) | Revised (refer Note 35) | |
(2) | Amortisation of $1.8 million is included in depreciation and amortisation expense in the Statements of Comprehensive Income |
-F- 42 -
Table of Contents
$m | ||||
Ballarat CGU | 28.1 | |||
Equigold | 165.2 | |||
193.3 | ||||
(1) | Gold price per ounce used for long-term forecast sale cash flows was A$1,363 for 2009, A$1,285 for 2010 and A$1,143 for 2011 and beyond. | |
(2) | Production schedule assuming a progressive ramp up during the four years from 2009 to 2012. | |
(3) | Total production over the life of the mine of more than 4 million ounces. The critical judgements in assessing the ultimate total mined resource of Ballarat are set out in Note 2. |
(1) | The real cash flows for each SBP case with varying lives ranging from 19 years to 23 years; | |
(2) | A real post-tax discount rate of 6.8%. |
-F- 43 -
Table of Contents
• | Reduction in the gold price used from 2011 and beyond of A$82 per ounce | ||
• | Delay in the mine production ramp up schedule of more than 12 months | ||
• | Reduction in the projected total life of mine gold production of 20%. |
$m | ||||||||
2008 | 2007 | |||||||
At beginning of year | 2.5 | 33.0 | ||||||
Additions(1) | 0.2 | 1.3 | ||||||
Acquired through business combination(2) | 6.8 | — | ||||||
De-classification on business combination(3) | — | (33.0 | ) | |||||
Translation | (1.8 | ) | — | |||||
Impairment | (3.2 | ) | — | |||||
Revaluation surplus / (deficit) transfer to Equity | (2.2 | ) | 1.2 | |||||
At end of year | 2.3 | 2.5 | ||||||
$m | ||||||||
2008 | 2007 | |||||||
Listed securities: | ||||||||
Equity securities | 2.3 | 2.5 | ||||||
2.3 | 2.5 | |||||||
(1) | During the year, the Consolidated Entity acquired 1 million shares of Rex Minerals Limited as consideration for the North Creswick exploration licence. | |
(2) | During the year, the Consolidated Entity acquired 12 million shares of Mount Magnet South NL and 10.4 million shares of Adamus Resources Limited on acquisition of Equigold Pty Limited (formerly Equigold NL). | |
(3) | At 31 December 2006, after entering into a merger proposal between the Company and Ballarat, Lihir Australian Holdings Pty Ltd held an 11% interest in Ballarat. These equity securities were carried at fair value. Upon completion of the merger, the remaining shares were acquired and the wholly owned Ballarat was consolidated into the Consolidated Entity’s accounts. |
$m | ||||||||
2008 | 2007 | |||||||
CURRENT | ||||||||
Trade creditors and accruals | 102.1 | 64.0 | ||||||
Amounts payable to related parties and controlled entities | — | — | ||||||
102.1 | 64.0 | |||||||
-F- 44 -
Table of Contents
$m | ||||||||
2008 | 2007 | |||||||
CURRENT | ||||||||
Employee provisions | 18.5 | 13.5 | ||||||
18.5 | 13.5 | |||||||
NON CURRENT | ||||||||
Employee provisions | 4.4 | 3.1 | ||||||
Other provisions | 8.8 | 1.4 | ||||||
Rehabilitation provision | 23.6 | 10.7 | ||||||
36.8 | 15.2 | |||||||
$m | ||||||||
2008 | 2007 | |||||||
Employee provisions current | ||||||||
Annual leave | 8.1 | 5.4 | ||||||
Sick leave | 1.4 | 1.0 | ||||||
Service bonus | 3.1 | 3.7 | ||||||
Short-term incentives | 3.3 | 2.1 | ||||||
Long service leave current | 1.3 | 1.3 | ||||||
Other employee provisions | 1.3 | — | ||||||
18.5 | 13.5 | |||||||
$m | ||||||||
2008 | 2007 | |||||||
Employee provisions non-current | ||||||||
Long service leave | 2.7 | 3.1 | ||||||
Service bonus | 1.7 | — | ||||||
4.4 | 3.1 | |||||||
$m | ||||||||
2008 | 2007 | |||||||
Rehabilitation provision | ||||||||
Carrying amount at start of year | 10.7 | 11.1 | ||||||
- additional / (reduction in) provision for changes in estimated cash outflows | 2.8 | (1.7 | ) | |||||
- additional provision due to ground disturbance | 1.8 | 0.1 | ||||||
- change in discount and inflation rate | 1.9 | — | ||||||
- acquisition of subsidiaries | 7.4 | 0.5 | ||||||
- interest charge | 0.5 | 0.7 | ||||||
- translation adjustment | (1.5 | ) | — | |||||
Carrying amount at end of year | 23.6 | 10.7 | ||||||
-F- 45 -
Table of Contents
$m | ||||||||
2008 | 2007 | |||||||
CURRENT | ||||||||
Finance leases (Note 37) | 0.3 | 0.3 | ||||||
0.3 | 0.3 | |||||||
NON CURRENT | ||||||||
Finance leases (Note 37) | 0.2 | 0.7 | ||||||
0.2 | 0.7 | |||||||
1. | Credit risk | |
2. | Liquidity risk | |
3. | Market risk, consisting of: |
• | Foreign exchange risk | ||
• | Interest rate risk | ||
• | Commodity price risk |
2008 | ||||||||
$m | ||||||||
Carrying | ||||||||
amount | Fair value | |||||||
Financial assets | ||||||||
Available for sale financial assets(1) | 2.3 | 2.3 |
-F- 46 -
Table of Contents
2008 | ||||||||
$m | ||||||||
Carrying | ||||||||
amount | Fair value | |||||||
Receivables(2) | 21.4 | 21.2 | ||||||
Cash and cash equivalents | 64.7 | 64.7 | ||||||
Derivative financial instruments(3) (4) | 0.7 | 0.7 | ||||||
Financial liabilities | ||||||||
Derivative financial instruments(3) (4) | 52.4 | 52.4 | ||||||
Finance lease liabilities | 0.5 | 0.5 | ||||||
Accounts payable(2) | 54.6 | 54.6 | ||||||
Deferred settlement payable | 10.8 | 10.8 |
(1) | The fair value of available for sale financial assets is calculated based upon the market price of the security as at balance date. | |
(2) | The carrying value less impairment provision is taken to be the approximate fair value of receivables and accounts payable due to their short-term nature. | |
(3) | The fair value of commodity contract derivative financial instruments is estimated based upon quotes from the market makers of each specific instrument and represents the estimated amounts that the Company would expect to receive or pay to terminate the agreements as at balance date. | |
(4) | The fair value of forward exchange contract derivative financial instruments is estimated based upon the listed market price and represents the estimated amounts that the Company would expect to receive or pay to terminate the agreements as at balance date. |
2007 | ||||||||
$m | ||||||||
Carrying | ||||||||
amount | Fair value | |||||||
Financial assets | ||||||||
Available for sale financial assets(1) | 2.5 | 2.5 | ||||||
Receivables(2) | 15.3 | 15.3 | ||||||
Cash and cash equivalents | 174.2 | 174.2 | ||||||
Financial liabilities | ||||||||
Finance lease liabilities | 1.0 | 1.0 | ||||||
Accounts payable(2) | 24.9 | 24.9 |
(1) | The fair value of available for sale financial assets is calculated based upon the market price of the security as at balance date. | |
(2) | The carrying value less impairment provision is taken to be the approximate fair value of receivables and accounts payable due to their short-term nature. |
-F- 47 -
Table of Contents
• | has a policy for establishing credit limits for the entities dealt with; | ||
• | may require collateral where appropriate; and | ||
• | monitors the overall financial strength of customers through publicly available credit information. |
Neither | Past due but not impaired | |||||||||||||||||||||||
Past due | past due | Less | Between | Greater | ||||||||||||||||||||
Carrying | and | nor | than 30 | 30 and 90 | than 90 | |||||||||||||||||||
amount | impaired | impaired | days | days | days | |||||||||||||||||||
$m | $m | $m | $m | $m | $m | |||||||||||||||||||
2008 | ||||||||||||||||||||||||
Other amounts receivable from third parties (current) | 21.0 | 5.0 | 4.7 | 0.6 | 1.0 | 14.7 | ||||||||||||||||||
Other amounts receivable from third parties (non-current) | 0.4 | — | — | — | — | 0.4 | ||||||||||||||||||
2007 | ||||||||||||||||||||||||
Other amounts receivable from third parties (current) | 14.9 | 4.2 | 4.8 | 1.6 | 2.7 | 5.8 | ||||||||||||||||||
Other amounts receivable from third parties (non-current) | 0.4 | — | — | — | — | 0.4 |
-F- 48 -
Table of Contents
Total | Total | |||||||||||||||||||||||
Less than | Between 1 | Between 2 | Over 5 | contractual | carrying | |||||||||||||||||||
1 year | & 2 years | & 5 years | years | cash flows | amount | |||||||||||||||||||
2008 | ||||||||||||||||||||||||
Trade and other payables | 54.6 | — | — | — | 54.6 | 54.6 | ||||||||||||||||||
Finance lease liabilities | 0.3 | 0.2 | — | — | 0.5 | 0.5 | ||||||||||||||||||
Derivative financial instruments | 33.5 | 18.9 | — | — | 52.4 | 52.4 | ||||||||||||||||||
Deferred settlement payable | 10.8 | — | — | — | 10.8 | 10.8 | ||||||||||||||||||
2007 | ||||||||||||||||||||||||
Trade and other payables | 24.9 | — | — | — | 24.9 | 24.9 | ||||||||||||||||||
Finance lease liabilities | 0.3 | 0.4 | 0.3 | — | 1.0 | 1.0 |
-F- 49 -
Table of Contents
(1) | translational exposure in respect of non-functional currency monetary items | |
(2) | transactional exposure in respect of non-functional currency expenditure and revenues. |
-F- 50 -
Table of Contents
Foreign exchange risk | ||||||||||||||||||||
-10% | +10% | |||||||||||||||||||
Carrying | Profit | |||||||||||||||||||
amount | Equity | before tax | Equity | Profit | ||||||||||||||||
2008 | $m | $m | $m | $m | $m | |||||||||||||||
Australian dollar denominated balances | ||||||||||||||||||||
Cash and cash equivalents | 4.3 | — | (0.4 | ) | — | 0.4 | ||||||||||||||
Receivables | 0.1 | — | — | — | — | |||||||||||||||
Derivative financial instruments | (51.7 | ) | 5.2 | — | (5.2 | ) | — | |||||||||||||
Finance lease liabilities | (0.5 | ) | — | (0.1 | ) | — | 0.1 | |||||||||||||
Accounts payable | (5.4 | ) | — | 0.5 | — | (0.5 | ) | |||||||||||||
PNG kina denominated balances | ||||||||||||||||||||
Cash and cash equivalents | 1.9 | — | (0.2 | ) | — | 0.2 | ||||||||||||||
Receivables | 8.9 | — | (0.9 | ) | — | 0.9 | ||||||||||||||
Accounts payable | (6.1 | ) | — | 0.6 | — | (0.6 | ) | |||||||||||||
CFA franc denominated balances | ||||||||||||||||||||
Cash and cash equivalents | 0.6 | — | (0.1 | ) | — | 0.1 | ||||||||||||||
Accounts payable | (2.1 | ) | — | 0.2 | — | (0.2 | ) | |||||||||||||
Total increase / (decrease) | 5.2 | (0.4 | ) | (5.2 | ) | 0.4 | ||||||||||||||
-F- 51 -
Table of Contents
Foreign exchange risk | ||||||||||||||||||||
-10% | +10% | |||||||||||||||||||
Carrying | Profit | |||||||||||||||||||
amount | Equity | before tax | Equity | Profit | ||||||||||||||||
2007 | $m | $m | $m | $m | $m | |||||||||||||||
Australian dollar denominated balances | ||||||||||||||||||||
Cash and cash equivalents | 59.3 | — | (5.9 | ) | — | 5.9 | ||||||||||||||
Receivables | — | — | — | — | — | |||||||||||||||
Derivative financial instruments | — | — | — | — | — | |||||||||||||||
Finance lease liabilities | — | — | — | — | — | |||||||||||||||
Accounts payable | (2.6 | ) | — | 0.3 | — | (0.3 | ) | |||||||||||||
PNG kina denominated balances | ||||||||||||||||||||
Cash and cash equivalents | 7.5 | — | (0.7 | ) | — | 0.7 | ||||||||||||||
Receivables | 6.7 | — | (0.7 | ) | — | 0.7 | ||||||||||||||
Accounts payable | (1.1 | ) | — | 0.1 | — | (0.1 | ) | |||||||||||||
CFA franc denominated balances | ||||||||||||||||||||
Cash and cash equivalents | — | — | — | — | — | |||||||||||||||
Accounts payable | — | — | — | — | — | |||||||||||||||
Total increase / (decrease) | (6.9 | ) | 6.9 | |||||||||||||||||
-F- 52 -
Table of Contents
Interest rate risk | ||||||||||||||||||||
-50bps | +50bps | |||||||||||||||||||
Carrying | Profit | |||||||||||||||||||
amount | Equity | before tax | Equity | Profit | ||||||||||||||||
2008 | $m | $m | $m | $m | $m | |||||||||||||||
Cash and cash equivalents | 64.7 | (0.3 | ) | (0.3 | ) | 0.3 | 0.3 | |||||||||||||
Total increase / (decrease) | (0.3 | ) | (0.3 | ) | 0.3 | 0.3 | ||||||||||||||
Interest rate risk | ||||||||||||||||||||
-50bps | +50bps | |||||||||||||||||||
Carrying | Profit | |||||||||||||||||||
amount | Equity | before tax | Equity | Profit | ||||||||||||||||
2007 | $m | $m | $m | $m | $m | |||||||||||||||
Cash and cash equivalents | 174.2 | (0.6 | ) | (0.6 | ) | 0.6 | 0.6 | |||||||||||||
Total increase / (decrease) | (0.6 | ) | (0.6 | ) | 0.6 | 0.6 | ||||||||||||||
-F- 53 -
Table of Contents
Gold price risk | ||||||||||||||||||||
+10% | -10% | |||||||||||||||||||
Profit | ||||||||||||||||||||
Carrying amount | Equity | before tax | Equity | Profit | ||||||||||||||||
2008 | $m | $m | $m | $m | $m | |||||||||||||||
Derivative financial instruments liability | 52.4 | (9.9 | ) | (9.9 | ) | 9.9 | 9.9 | |||||||||||||
Total increase / (decrease) | (9.9 | ) | (9.9 | ) | 9.9 | 9.9 | ||||||||||||||
$m | ||||||||
Derivative financial instruments | 2008 | 2007 | ||||||
Current assets - - Forward currency contracts | 0.4 | — | ||||||
0.4 | — | |||||||
Non-current assets - - Forward currency contracts | 0.3 | — | ||||||
0.3 | — | |||||||
Current liabilities - - Forward commodity contracts | 33.5 | — | ||||||
33.5 | — | |||||||
Non-current liabilities - - Forward commodity contracts | 18.9 | — | ||||||
18.9 | — | |||||||
-F- 54 -
Table of Contents
Contract | ||||||||||||||||||||||||||||
price | Total | |||||||||||||||||||||||||||
per | Less than 1 | Between 1 & | Between 2 & | carrying | ||||||||||||||||||||||||
2008 | Ounces | ounce | year | 2 years | 5 years | Over 5 years | value | |||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||
- Forward currency contracts | 0.4 | 0.3 | — | — | 0.7 | |||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||
- Forward commodity contracts | 115,797 | A$600 | 33.5 | 18.9 | — | — | 52.4 |
Total gross pre-tax | Total net post-tax hedge | |||||||||||
hedge loss | Total tax effect | loss | ||||||||||
Designation Year | $m | $m | $m | |||||||||
2009 | 102.3 | (30.7 | ) | 71.6 | ||||||||
2010 | 81.9 | (24.6 | ) | 57.3 | ||||||||
2011 | 44.2 | (13.2 | ) | 31.0 | ||||||||
2012 | 5.8 | (1.7 | ) | 4.1 | ||||||||
2013 | 6.0 | (1.8 | ) | 4.2 | ||||||||
240.2 | (72.0 | ) | 168.2 | |||||||||
-F- 55 -
Table of Contents
Contract | ||||||||||||||||||||||||||||
price per | Less than 1 | Between 1 & | Between 2 & | |||||||||||||||||||||||||
2008 | Ounces | ounce | year | 2 years | 5 years | Over 5 years | Total | |||||||||||||||||||||
- Forward commodity contracts | 115,797 | A$600 | A$25.1m | A$14.0m | — | — | A$39.1m |
$m | ||||||||
2008 | 2007 | |||||||
CURRENT | ||||||||
Deferred settlement payable | 10.8 | — | ||||||
10.8 | — | |||||||
$m | ||||||||
2008 | 2007 | |||||||
(a) Issued and paid up capital | ||||||||
Ordinary shares | ||||||||
Opening balance | 2,319.7 | 1,027.1 |
-F- 56 -
Table of Contents
$m | ||||||||
2008 | 2007 | |||||||
New issues — MRL Capital Limited | 5.2 | — | ||||||
New issues — Equigold acquisition | 756.0 | — | ||||||
New issues — Ballarat acquisition | — | 316.5 | ||||||
New issues — capital raising | — | 989.0 | ||||||
Less: Transaction costs | — | (11.6 | ) | |||||
Shares reclassified as treasury shares(1) | (0.9 | ) | (1.3 | ) | ||||
Closing balance | 3,080.0 | 2,319.7 | ||||||
Number of shares ’000 | ||||||||
2008 | 2007 | |||||||
(b) Issued and paid up capital | ||||||||
Opening balance | 1,903,912 | 1,284,049 | ||||||
New issues — capital raising | — | 508,277 | ||||||
New issues — MRL Capital Limited | 3,284 | — | ||||||
New issues — Equigold acquisition | 280,405 | — | ||||||
New issues — Ballarat acquisition | — | 111,996 | ||||||
Shares reclassified as treasury shares(1) | (546 | ) | (410 | ) | ||||
Closing balance | 2,187,055 | 1,903,912 | ||||||
(1) | The treasury restricted executive shares are shares purchased for the LESP (see Note 31, Share Based Payments). On consolidation, shares held under the LESP are offset against share capital. |
-F- 57 -
Table of Contents
$m | ||||||||
2008 | 2007 Revised | |||||||
(a) Reserves | ||||||||
Hedging reserve – cash flow hedges | (197.4 | ) | (221.9 | ) | ||||
Employee Share based payments reserve | 8.8 | 3.3 | ||||||
Landowner Share based payments reserve | — | 5.2 | ||||||
Fair value reserve | (0.8 | ) | 0.8 | |||||
Foreign currency translation reserve | (127.6 | ) | 42.6 | |||||
Other reserves | 4.4 | — | ||||||
(312.6 | ) | (170.0 | ) | |||||
Movements: | ||||||||
Hedging reserve – cash flow hedges | ||||||||
Opening balance | (221.9 | ) | (256.1 | ) | ||||
Fair value of cash flow hedges | (32.7 | ) | (59.1 | ) | ||||
Deferred hedging gains / (losses) | 76.7 | 97.8 | ||||||
Deferred taxation | (19.5 | ) | (4.5 | ) | ||||
(197.4 | ) | (221.9 | ) | |||||
Employee share based payments reserve | ||||||||
Opening balance | 3.3 | 0.2 | ||||||
Share rights expensed | 4.7 | 2.9 | ||||||
Deferred taxation | 0.8 | 0.2 | ||||||
8.8 | 3.3 | |||||||
Landowners share based payments reserve | ||||||||
Opening balance | 5.2 | 5.2 | ||||||
Shares issued | (5.2 | ) | — | |||||
— | 5.2 | |||||||
Fair value reserve | ||||||||
Opening balance | 0.8 | — | ||||||
Fair value of available for sale financial assets | (2.0 | ) | 1.2 | |||||
Deferred tax | 0.4 | (0.4 | ) | |||||
(0.8 | ) | 0.8 | ||||||
Foreign currency translation reserve | ||||||||
Opening balance | 42.6 | — | ||||||
Currency translation differences arising during the year | (158.5 | ) | 42.6 | |||||
Deferred tax | (11.7 | ) | — | |||||
(127.6 | ) | 42.6 | ||||||
Other reserve | ||||||||
Opening balance | — | — | ||||||
Purchase of minority interests | 4.4 | — | ||||||
4.4 | — | |||||||
(b) Retained Profits(1) | ||||||||
Movements in retained profits / (losses) were as follows: | ||||||||
Opening balance | 18.8 | 42.9 | ||||||
Net profit for the year | 109.3 | (24.1 | ) | |||||
128.1 | 18.8 | |||||||
(1) | Revised (refer Note 35) |
-F- 58 -
Table of Contents
• | the fair value of options issued to employees but not exercised | ||
• | the fair value of shares issued to employees | ||
• | in the parent entity — the fair value of shares and options issued to employees of subsidiaries. |
• | the fair value of shares issued to local landowners. |
$m | ||||||||
2008 | 2007 | |||||||
Minority interest in Equigold Côte d’Ivoire SA and Equigold Mines Côte d’Ivoire SA | ||||||||
Share capital | 31.1 | — | ||||||
Retained earnings | 0.9 | — | ||||||
32.0 | — | |||||||
Movements in minority interest in retained earnings: | ||||||||
Balance at the beginning of the year | — | — | ||||||
Interest in profit / (loss) after tax | 0.9 | — | ||||||
0.9 | — | |||||||
Total minority interests | 32.0 | — | ||||||
-F- 59 -
Table of Contents
Name of subsidiary | % ownership interest | Country of incorporation | ||||
Niugini Mining Limited | 100 | % | Papua New Guinea | |||
Niugini Mining Australia Pty Ltd | 100 | % | Australia | |||
Lihir Management Company Limited | 100 | % | Papua New Guinea | |||
Lihir Business Development Limited | 100 | % | Papua New Guinea | |||
Lihir Services Australia Pty Ltd | 100 | % | Australia | |||
Lihir Australian Holdings Pty Ltd | 100 | % | Australia | |||
Ballarat Goldfields Pty Ltd | 100 | % | Australia | |||
New Resource Pty Ltd | 100 | % | Australia | |||
Berringa Resources Pty Ltd | 100 | % | Australia | |||
Ballarat West Goldfields Pty Ltd | 100 | % | Australia | |||
Corpique No. 21 Pty Ltd | 100 | % | Australia | |||
Equigold Pty Ltd | 100 | % | Australia | |||
Swindon Holdings Pty Ltd | 100 | % | Australia | |||
Stanmines Pty Ltd | 100 | % | Australia | |||
Kim Resources Pty Ltd | 100 | % | Australia | |||
Equigold Mines CI SA | 90 | % | Côte d’Ivoire | |||
Equigold CI SA | 98 | % | Côte d’Ivoire |
-F- 60 -
Table of Contents
Provisional fair | ||||||||||||
Carrying value | Fair value(1) | value | ||||||||||
US$m | adjustments | US$m | ||||||||||
Cash and cash equivalents | 14.4 | — | 14.4 | |||||||||
Receivables | 8.3 | — | 8.3 | |||||||||
Inventories | 12.7 | 5.9 | 18.6 | |||||||||
Other assets | 0.3 | — | 0.3 | |||||||||
Deferred mining costs | 2.9 | — | 2.9 | |||||||||
Property, plant, equipment and capitalised exploration | 159.0 | (38.0 | ) | 121.0 | ||||||||
Mineral reserves and resources | — | 624.1 | 624.1 | |||||||||
Exploration potential | — | 162.3 | 162.3 | |||||||||
Intangibles assets | — | 16.2 | 16.2 | |||||||||
Available for sale financial asset | 6.8 | — | 6.8 | |||||||||
Accounts payable & accrued liabilities | (16.8 | ) | — | (16.8 | ) | |||||||
Contingent liabilities(2) | — | (10.0 | ) | (10.0 | ) | |||||||
Provisions | (13.1 | ) | — | (13.1 | ) | |||||||
Derivative financial instruments | (52.8 | ) | — | (52.8 | ) | |||||||
Deferred income tax assets / (liabilities) | 21.5 | (209.5 | ) | (188.0 | ) | |||||||
Borrowings | (49.0 | ) | — | (49.0 | ) | |||||||
Net assets | 94.2 | 551.0 | 645.2 | |||||||||
Goodwill arising on business combination(1) | — | 165.2 | 165.2 | |||||||||
Minority interests | — | (49.1 | ) | (49.1 | ) | |||||||
Total cost | 94.2 | 667.1 | 761.3 | |||||||||
(1) | The goodwill balance is a result of the acquisition of certain assets for which a deferred tax liability is recognised on acquisition that differs from the available tax base of these assets. | |
(2) | In attributing value to the potential exploration projects acquired, it has been assumed that through the realisation of these projects the Côte d’Ivoire government will take a 10% stake on any projects that proceed to operate as mining projects. This potential 10% interest has been recognised as a contingent liability. |
-F- 61 -
Table of Contents
US$m | ||||
Shares issued (280,405,288 shares at A$2.87 at rate of US$0.9394 per A$1) | 756.0 | |||
Direct costs relating to the acquisition | 5.3 | |||
761.3 | ||||
Year ended | ||||
31 December | ||||
2008 US$m | ||||
Acquisition of subsidiary net of cash acquired: | ||||
Cash balances acquired | 14.4 | |||
Less: direct cash costs of acquisition | (5.3 | ) | ||
Net cash inflow | 9.1 | |||
Provisional fair | ||||||||||||
value as | ||||||||||||
previously | ||||||||||||
reported | Final | |||||||||||
US$m | Adjustments(1) | US$m | ||||||||||
Cash and cash equivalents | 22.6 | — | 22.6 | |||||||||
Receivables | 0.7 | — | 0.7 | |||||||||
Inventory | 0.4 | — | 0.4 | |||||||||
Prepayments | 0.1 | — | 0.1 | |||||||||
Property, plant and equipment | 27.2 | — | 27.2 | |||||||||
Intangibles — exploration rights, mining information and forestry licence | 46.3 | — | 46.3 | |||||||||
Development property — mining tenements | 225.0 | (5.1 | ) | 219.9 | ||||||||
Development property — development assets | 47.6 | — | 47.6 | |||||||||
Deferred tax asset | 20.8 | 8.5 | 29.3 | |||||||||
Accounts payable | (3.9 | ) | — | (3.9 | ) | |||||||
Borrowings | (1.1 | ) | — | (1.1 | ) | |||||||
Provisions | (1.0 | ) | — | (1.0 | ) | |||||||
Deferred tax liability | (68.0 | ) | 1.2 | (66.8 | ) | |||||||
Net assets | 316.7 | 4.6 | 321.3 | |||||||||
Goodwill arising on business combination(2) | 36.3 | (4.6 | ) | 31.7 | ||||||||
Total cost | 353.0 | — | 353.0 | |||||||||
(1) | The main adjustments relate to finalisation of the available tax losses and tax obligations on acquisition and the associated iterative effect on mining tenements, goodwill and deferred tax liabilities. As required under IFRS 3, all adjustments have been presented as if the accounting had been completed on acquisition. | |
(2) | The goodwill balance is a result of the acquisition of certain assets for which a deferred tax liability is recognised on acquisition that differs from the available tax base of these assets |
-F- 62 -
Table of Contents
US$m | ||||
Shares issued | 316.5 | |||
Cash paid | 33.0 | |||
Direct costs relating to the acquisition | 3.5 | |||
353.0 | ||||
31 December | ||||
2007 | ||||
US$m | ||||
Acquisition of subsidiary net of cash acquired: | ||||
Cash balances acquired | 22.6 | |||
Less: direct cash costs of acquisition | (3.0 | ) | ||
Net inflow of cash | 19.6 | |||
-F- 63 -
Table of Contents
(1) | Exercise price: $ nil (2007 — $ nil) | |
(2) | Expected volatility: 46.9% (2007 — 42%) | |
(3) | Risk-free interest rate: 6.81% (2007 — 6.12%) | |
(4) | Expected life of right (years): 10 years (2007 — 10 years) | |
(5) | Weighted average share price at grant date: $2.98 (2007 — $3.08) | |
(6) | Expected dividend yield: 0% (2007 — 0%) |
Per share | ||||||||||||||||||||||||||||||||
right | ||||||||||||||||||||||||||||||||
indicative | Number | Number | Number | Number | Number | |||||||||||||||||||||||||||
Exercise price | value | Performance | Number at | granted during | exercised | forfeited during | Other Changes | outstanding at | exercisable at | |||||||||||||||||||||||
US$ | US$ | conditions | 1-Jan-08 | period | during period | period | (1) | 31-Dec-08 | 31-Dec-08 | |||||||||||||||||||||||
— | 2.529 | 1 | 163,183 | — | (114,133 | ) | (46,944 | ) | 31,238 | 33,344 | 33,344 | |||||||||||||||||||||
— | 2.602 | 2 | 167,192 | — | (4,459 | ) | — | (151,182 | ) | 11,551 | 11,551 | |||||||||||||||||||||
— | 1.928 | 3 | 250,763 | — | (213,395 | ) | — | 24,061 | 61,429 | 61,429 | ||||||||||||||||||||||
— | 1.978 | 4 | 250,775 | — | (213,396 | ) | — | 24,052 | 61,431 | 61,431 | ||||||||||||||||||||||
— | — | 5 | 7,603 | — | (1,192 | ) | — | — | 6,411 | 6,411 | ||||||||||||||||||||||
— | 1.542 | 6 | 1,840,903 | 2,154,285 | — | (48,313 | ) | — | 3,946,875 | — | ||||||||||||||||||||||
— | 1.507 | 7 | 1,840,928 | 2,154,307 | — | (48,313 | ) | — | 3,946,922 | — | ||||||||||||||||||||||
Total | 4,521,347 | 4,308,592 | (546,575 | ) | (143,570 | ) | (71,831 | ) | 8,067,963 | 174,166 | ||||||||||||||||||||||
(1) | This represents the transfer of some of the share rights from performance condition 2 evenly across performance conditions 1, 3 & 4. |
-F- 64 -
Table of Contents
Per share right | ||||||||||||||||||||||||||||||||
indicative | Number | Number | Number | Number | Number | |||||||||||||||||||||||||||
Exercise price | value | Performance | Number at | granted during | exercised | forfeited during | outstanding at | exercisable at | ||||||||||||||||||||||||
US$ | US$ | conditions | 1-Jan-07 | period | during period | period | 31-Dec-07 | 31-Dec-07 | ||||||||||||||||||||||||
— | 2.529 | 1 | 120,814 | 123,870 | (48,940 | ) | (32,561 | ) | 163,183 | 39,313 | ||||||||||||||||||||||
— | 2.501 | 2 | 165,961 | 123,876 | (122,645 | ) | — | 167,192 | 43,316 | |||||||||||||||||||||||
— | 1.943 | 3 | 181,213 | 185,791 | (102,597 | ) | (13,644 | ) | 250,763 | 64,972 | ||||||||||||||||||||||
— | 1.892 | 4 | 181,221 | 185,801 | (102,603 | ) | (13,644 | ) | 250,775 | 64,974 | ||||||||||||||||||||||
— | — | 5 | — | 40,731 | (33,128 | ) | — | 7,603 | 7,603 | |||||||||||||||||||||||
— | 1.562 | 6 | — | 1,840,903 | — | — | 1,840,903 | — | ||||||||||||||||||||||||
— | 1.506 | 7 | — | 1,840,928 | — | — | 1,840,928 | — | ||||||||||||||||||||||||
Total | 649,209 | 4,341,900 | (409,913 | ) | (59,849 | ) | 4,521,347 | 220,178 |
Number exercised | Exercise date | Weighted average price at exercise date(1) | ||||
546,575 | 23-29 Sep 2008 | A$2.75 |
(1) | Purchased over a 7 day period due to restrictions on the volume that could be traded on any one day. |
$m | ||||||||
2008 | 2007 | |||||||
Executive share plan | 4.7 | 2.9 | ||||||
4.7 | 2.9 | |||||||
1. | Individuals are set key performance indicators (KPI’s) based around the Company’s performance in line with Board policies to raise the long-term value of the Company. The performance conditions were assessed by the Board. | ||
2. | This performance condition was assessed by the Board against changes in the net present value of the Company. This assessment was to have regard to the amount and timing of net expected cash flows, as indicated by reserves, costs and other relevant factors. Certain potential sources of change in the Company’s net present value were not included in the assessment of this performance condition as they have been assessed by the Board to be beyond the individuals’ control and the control of the management team generally. | ||
3. | This performance condition was assessed by the Board by reference to the performance of the: |
• | Company’s “total shareholder return” or TSR over the performance period from the VWAP Month Employed until the testing date using the VWAP (volume weighted average share price); and | ||
• | Average “total shareholder return” of the Comparator Group using the Comparator Group’s VWAP for the same time periods as applicable above. |
-F- 65 -
Table of Contents
Total shareholder return or TSR is, broadly, share price growth and dividends reinvested, excluding the impacts of franking credits and taxations. | |||
4. | This performance condition was assessed to the extent to which the Company’s TSR increased over the performance period using the VWAP Month for each participant as the starting share value for the TSR until the testing date VWAP. | ||
5. | This grant was made to existing participants who held share rights at the time of the 3 for 1 Entitlement offer and were unable to participate in the offer due to trading restrictions leading up to the capital raising. In recognition of Participants in the LESP not being eligible to participate in the Entitlement Offer, the Directors resolved that the number of share rights vested for each Participant be adjusted to take into account each Participant’s entitlement to share rights had they been eligible to participate. The grant is subject to the same three year service period restrictions. | ||
6. | This performance measure will be assessed on the extent to which Company’s TSR increases over the performance period compared to growth in the TSX Global Gold Index (“Index”) over the performance period. | ||
7. | This performance measure will be assessed on the extent to which the Company’s TSR increases over the performance period compared to the TSR growth of companies in the Comparator Group over the performance period. |
• | Dr Garnaut was re-appointed as chairman for a three-year period commencing on May 1, 2004, subject to his continuing to hold office as a director and to certain other termination rights set out in the agreement; | ||
• | No fees or benefits are payable to Dr Garnaut by reason of his retirement or other termination of office; and |
(i) | Chairman — Non-Executive Dr Ross Garnaut |
-F- 66 -
Table of Contents
(ii) | Executive Directors Mr Arthur Hood, Managing Director |
(iii) | Non-Executive Directors |
Mr Bruce Brook Dr Peter Cassidy Dr Michael Etheridge Mrs Winifred Kamit Mr Geoff Loudon Mr Alister Maitland |
Name | Position | Employer | ||
Phil Baker | Chief Financial Officer | Lihir Services Australia Pty Ltd | ||
Mark Clark | Executive General Manager West Africa and Corporate Services (appointed 17 June 2008, resigned 31 October 2008) | Lihir Services Australia Pty Ltd | ||
Noel Foley | Executive General Manager, PNG Operations | Lihir Gold Limited | ||
Graham Folland | Executive General Manager Corporate Development | Lihir Services Australia Pty Ltd | ||
Tim Fry | Executive General Manager West Africa and Corporate Services (appointed 1 November 2008) | Lihir Services Australia Pty Ltd | ||
Morgan Hart | Executive General Manager Australia and Africa Operations (appointed 17 June 2008, resigned 31 December 2008) | Lihir Services Australia Pty Ltd | ||
Stuart MacKenzie | Group Secretary and General Counsel | Lihir Services Australia Pty Ltd |
Name | Position | Employer | ||
Phil Baker | Chief Financial Officer (from January 21, 2007) | Lihir Services Australia Pty Ltd | ||
Joe Dowling | General Manager Corporate Affairs | Lihir Services Australia Pty Ltd | ||
Murray Eagle | General Manager External Affairs & Sustainable Development (retired January, 31 2008) | Lihir Gold Limited | ||
Noel Foley | Executive General Manager, Operations | Lihir Gold Limited | ||
Graham Folland | General Manager Corporate Development | Lihir Services Australia Pty Ltd | ||
Paul Fulton | Chief Financial Officer (from January 1, 2007 to January 20, 2007) | Lihir Services Australia Pty Ltd |
-F- 67 -
Table of Contents
Name | Position | Employer | ||
Richard Laufmann | Executive General Manager Australian Operations and Business Development (from 8 March 2007 to 8 June 2007) | Lihir Services Australia Pty Ltd | ||
Stuart MacKenzie | Group Secretary and General Counsel | Lihir Services Australia Pty Ltd | ||
Wojciech Ozga | General Manager, Ballarat Operations (from 8 March 2007, resigned January, 31 2008) | Lihir Services Australia Pty Ltd | ||
Ron Yung | General Manager Organization Performance | Lihir Services Australia Pty Ltd |
$ | ||||||||
2008 | 2007 | |||||||
Short-term employee benefits | 3,923,907 | 4,884,602 | ||||||
Post-employment benefits | 308,711 | 424,112 | ||||||
Termination benefits | — | 842,467 | ||||||
Long-term benefits | 26,517 | 25,967 | ||||||
Share-based payments | 2,650,240 | 1,920,781 | ||||||
6,909,375 | 8,097,929 |
Balance at | Equity settled | Balance at | ||||||||||||||||||||||||||||||
start of the | compensation | Equity settled | Other | end of the | Vested and | |||||||||||||||||||||||||||
Name | year | (rights issue) | compensation | Exercised | changes | year | exercisable | Unvested | ||||||||||||||||||||||||
Directors of Lihir Gold Limited | ||||||||||||||||||||||||||||||||
Arthur Hood | 1,667,724 | — | 1,649,164 | (129,249 | ) | (85,028 | ) | 3,102,611 | — | 3,102,611 | ||||||||||||||||||||||
Other key management personnel of the Consolidated Entity | ||||||||||||||||||||||||||||||||
Phil Baker | 251,786 | — | 192,711 | — | — | 444,497 | 45,074 | 399,423 | ||||||||||||||||||||||||
Mark Clark | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Noel Foley | 242,342 | — | 183,644 | (41,996 | ) | (1,388 | ) | 382,602 | — | 382,602 | ||||||||||||||||||||||
Graham Folland | 204,343 | — | 158,705 | (33,355 | ) | (451 | ) | 329,242 | — | 329,242 | ||||||||||||||||||||||
Tim Fry | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Morgan Hart | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Stuart MacKenzie | 179,821 | — | 136,033 | (30,989 | ) | — | 284,865 | — | 284,865 | |||||||||||||||||||||||
2,546,016 | — | 2,320,257 | (235,589 | ) | (86,867 | ) | 4,543,817 | 45,074 | 4,498,743 | |||||||||||||||||||||||
-F- 68 -
Table of Contents
Balance at | Equity settled | Balance at | Vested | |||||||||||||||||||||||||||||
start of the | compensation | Equity settled | Other | end of the | and | |||||||||||||||||||||||||||
Name | year | (rights issue) | compensation | Exercised | changes | year | exercisable | Unvested | ||||||||||||||||||||||||
Directors of Lihir Gold Limited | ||||||||||||||||||||||||||||||||
Arthur Hood | 181,677 | 4,061 | 1,531,194 | (49,208 | ) | — | 1,667,724 | — | 1,667,724 | |||||||||||||||||||||||
Other key management personnel of the Consolidated Entity | ||||||||||||||||||||||||||||||||
Phil Baker | — | — | 251,786 | — | — | 251,786 | — | 251,786 | ||||||||||||||||||||||||
Joe Dowling | 35,945 | 3,072 | 160,679 | (37,220 | ) | (1,797 | ) | 160,679 | — | 160,679 | ||||||||||||||||||||||
Murray Eagle | 54,225 | 3,547 | 213,977 | (4,634 | ) | (2,711 | ) | 264,404 | 51,514 | 212,890 | ||||||||||||||||||||||
Noel Foley | 47,926 | 4,139 | 242,342 | (50,148 | ) | (1,917 | ) | 242,342 | — | 242,342 | ||||||||||||||||||||||
Graham Folland | 41,080 | 1,593 | 206,297 | (42,984 | ) | (1,643 | ) | 204,343 | — | 204,343 | ||||||||||||||||||||||
Stuart MacKenzie | 13,734 | 4,634 | 176,422 | (14,969 | ) | — | 179,821 | — | 179,821 | |||||||||||||||||||||||
Wojciech Ozga | — | 165,235 | — | — | 165,235 | — | 165,235 | |||||||||||||||||||||||||
Ron Yung | 18,885 | 1,235 | 196,949 | (19,307 | ) | (1,171 | ) | 196,591 | — | 196,591 | ||||||||||||||||||||||
Paul Fulton | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
393,472 | 22,281 | 3,144,881 | (218,470 | ) | (9,239 | ) | 3,332,925 | 51,514 | 3,281,411 | |||||||||||||||||||||||
Received during | ||||||||||||||||
the year on the | ||||||||||||||||
Balance at the | exercise of share | Other changes | Balance at the | |||||||||||||
Name | start of the year | rights | during the year | end of the year | ||||||||||||
Directors of Lihir Gold Limited | ||||||||||||||||
Dr Ross Garnaut | 101,523 | — | 12,000 | 113,523 | ||||||||||||
Mr Arthur Hood | 353,704 | 129,249 | 35,000 | 517,953 | ||||||||||||
Mr Bruce Brook | 33,334 | — | 20,000 | 53,334 | ||||||||||||
Dr Peter Cassidy | 44,301 | — | — | 44,301 | ||||||||||||
Dr Michael Etheridge | 61,728 | — | — | 61,728 | ||||||||||||
Mrs Winifred Kamit | 2,667 | — | — | 2,667 | ||||||||||||
Mr Geoff Loudon | 143,840 | — | — | 143,840 | ||||||||||||
Mr Alister Maitland | 30,864 | — | 50,000 | 80,864 | ||||||||||||
Other key management personnel of the Consolidated Entity | ||||||||||||||||
Phil Baker | 10,000 | — | (10,000 | ) | — | |||||||||||
Noel Foley | 97,070 | 41,996 | 11,500 | 150,566 | ||||||||||||
Graham Folland | 47,651 | 33,355 | 7,642 | 88,648 | ||||||||||||
Tim Fry | — | — | 2,457 | 2,457 | ||||||||||||
Morgan Hart | 1,386,000 | — | (389,510 | ) | 996,490 | |||||||||||
Stuart MacKenzie | 14,969 | 30,989 | — | 45,958 |
-F- 69 -
Table of Contents
Received during | ||||||||||||||||
the year on the | ||||||||||||||||
Balance at the | exercise of share | Other changes | Balance at the | |||||||||||||
Name | start of the year | rights | during the year | end of the year | ||||||||||||
Directors of Lihir Gold Limited | ||||||||||||||||
Dr Ross Garnaut | 53,225 | — | 48.298 | 101,523 | ||||||||||||
Mr Arthur Hood | 228,371 | 49,208 | 76,125 | 353,704 | ||||||||||||
Mr Bruce Brook | 10,000 | — | 23,334 | 33,334 | ||||||||||||
Dr Peter Cassidy | 33,225 | — | 11,076 | 44,301 | ||||||||||||
Dr Michael Etheridge | — | — | 61,728 | 61,728 | ||||||||||||
Mrs Winifred Kamit | 2,000 | — | 667 | 2,667 | ||||||||||||
Mr Geoff Loudon | 143,840 | — | — | 143,840 | ||||||||||||
Mr Alister Maitland | — | — | 30,864 | 30,864 | ||||||||||||
Other key management personnel of the Consolidated Entity | ||||||||||||||||
Phil Baker | — | — | 10,000 | 10,000 | ||||||||||||
Joe Dowling | 15,000 | 37,220 | 5,000 | 57,220 | ||||||||||||
Murray Eagle(1) | — | 4,634 | — | 4,634 | ||||||||||||
Noel Foley | 35,191 | 50,148 | 11,731 | 97,070 | ||||||||||||
Graham Folland | 3,500 | 42,984 | 1,167 | 47,651 | ||||||||||||
Stuart MacKenzie | — | 14,969 | — | 14,969 | ||||||||||||
Wojciech Ozga(1) | — | — | 54,000 | 54,000 | ||||||||||||
Ron Yung | 2,000 | 19,307 | 667 | 21,974 |
(1) | Employment with Consolidated Entity ceased on 31 January 2008. |
-F- 70 -
Table of Contents
Number in | ||||||||||
Interest paid | Consolidated | |||||||||
Balance at the | and payable for | Interest not | Balance at the | Entity at the end | ||||||
start of the year | the year | charged | end of the year | of the year | ||||||
$ | $ | $ | $ | $ | ||||||
2008 | — | — | — | — | — | |||||
2007 | — | — | 373 | 8,769 | 1(1) |
Remuneration and benefit band | Number of employees | |||||
$US | 2008 | 2007 | 2006 | |||
$ 30,001 - $ 40,000 | 13 | 37 | 48 | |||
$ 40,001 - $ 50,000 | 74 | 27 | 25 | |||
$ 50,001 - $ 60,000 | 55 | 24 | 17 | |||
$ 60,001 - $ 70,000 | 75 | 20 | 14 | |||
$ 70,001 - $ 80,000 | 77 | 26 | 7 | |||
$ 80,001 - $ 90,000 | 55 | 13 | 11 | |||
$ 90,001 - $100,000 | 45 | 11 | 8 | |||
$100,001 - $110,000 | 29 | 15 | 7 | |||
$110,001 - $120,000 | 30 | 17 | 10 | |||
$120,001 - $130,000 | 41 | 36 | 6 | |||
$130,001 - $140,000 | 30 | 24 | 7 | |||
$140,001 - $150,000 | 25 | 29 | 5 | |||
$150,001 - $160,000 | 16 | 21 | 5 | |||
$160,001 - $170,000 | 21 | 20 | 6 | |||
$170,001 - $180,000 | 17 | 37 | 6 | |||
$180,001 - $190,000 | 10 | 10 | 8 | |||
$190,001 - $200,000 | 15 | 2 | 2 | |||
$200,001 - $210,000 | 8 | 2 | 1 | |||
$210,001 - $220,000 | 6 | 4 | 5 | |||
$220,001 - $230,000 | 3 | 1 | — | |||
$230,001 - $240,000 | 2 | 1 | 3 | |||
$240,001 - $250,000 | 3 | 3 | 1 | |||
$250,001 - $260,000 | 4 | 3 | — | |||
$260,001 - $270,000 | 2 | 4 | 1 | |||
$270,001 - $280,000 | 2 | 1 | 1 | |||
$280,001 - $290,000 | 3 | — | 1 | |||
$300,001 - $310,000 | 1 | — | — | |||
$310,001 - $320,000 | 4 | — | 1 |
-F- 71 -
Table of Contents
Remuneration and benefit band | Number of employees | |||||
$US | 2008 | 2007 | 2006 | |||
$340,001 - $350,000 | 2 | — | — | |||
$350,001 - $360,000 | 3 | 1 | — | |||
$360,001 - $370,000 | 1 | 1 | — | |||
$450,001 - $460,000 | — | 1 | 1 | |||
$470,001 - $480,000 | — | 1 | — | |||
$480,001 - $490,000 | — | 1 | — | |||
$530,001 - $540,000 | 1 | — | — | |||
$610,001 - $620,000 | — | 1 | — | |||
$640,001 - $650,000 | 1 | 1 | — | |||
$650,001 - $660,000 | — | 1 | — | |||
$660,001 - $670,000 | 1 | — | — | |||
$730,001 - $740,000 | 1 | — | — |
2007 | 2007 | 2006 | 2006 | |||||||||||||||||||||
US$m | US$m | US$m | US$m | |||||||||||||||||||||
As reported | adjustment | As revised | As reported | adjustment | As revised | |||||||||||||||||||
(a)/(b) Income tax benefit | (11.7 | ) | — | (11.7 | ) | 22.1 | (1.1 | ) | 21.0 |
2007 | 2007 | 2006 | 2006 | |||||||||||||||||||||
US$m | US$m | US$m | US$m | |||||||||||||||||||||
As reported | adjustment | As revised | As reported | adjustment | As revised | |||||||||||||||||||
(d) Share based payments | 2.9 | (2.9 | ) | — | 5.5 | (5.5 | ) | — | ||||||||||||||||
(d) Income tax on other comprehensive income | (4.7 | ) | (0.2 | ) | (4.9 | ) | 20.3 | 0.1 | 20.4 |
�� | ||||||||||||||||||||||||
2007 | 2007 | 2006 | 2006 | |||||||||||||||||||||
US$m | US$m | US$m | US$m | |||||||||||||||||||||
As reported | adjustment | As revised | As reported | adjustment | As revised | |||||||||||||||||||
a) Deferred tax asset | 92.1 | 9.2 | 101.3 | 86.2 | 7.4 | 93.6 | ||||||||||||||||||
c) Property, plant and equipment | 1,430.6 | (5.6 | ) | 1,425.0 | — | — | — | |||||||||||||||||
c) Intangible assets | 98.4 | (4.9 | ) | 93.5 | — | — | — | |||||||||||||||||
b)/c) Deferred tax liability | (50.8 | ) | 8.7 | (42.1 | ) | — | — | — | ||||||||||||||||
a)/b) Opening retained earnings | (11.4 | ) | (7.4 | ) | (18.8 | ) | 18.3 | (6.3 | ) | 12.0 |
a) | A revision of deferred tax balances was undertaken in Lihir Gold Limited which was attributable to the Lihir Island operation and was made to reconcile the previously reported tax balances to amendments sought for various income tax returns for the periods 1998-2004. The effect of this revision for each relevant year was: an increase of $10 million in deferred tax benefit in 2004, a decrease in deferred tax benenfit of $3.7 million in 2005, an increase in deferred tax benefit of $1.1 million in 2006, an increase of $1.8 million in deferred tax |
-F- 72 -
Table of Contents
benefit in the year ended 31 December 2007, an increase of $7.4 million in opening retained earnings at 1 January 2007 and an increase of $9.2 million in deferred tax assets. | |||
b) | Deferred income tax expense increased by $1.8 million to reflect an accounting adjustment in relation to opening deferred tax adjustments in Ballarat Goldfields NL. | ||
c) | Finalisation of the Ballarat business combination and subsequent adjustments to the provisional accounting values as illustrated in Note 30(b) and translation of these final adjustments to the closing $US rate at 31 December 2007. | ||
d) | Share based payments and the associated tax effect is now disclosed as a separate item within the statements of changes in equity. |
$ | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(a) Assurance services | ||||||||||||
Audit services | ||||||||||||
PricewaterhouseCoopers, PNG Firm | 239,420 | 154,843 | 340,333 | |||||||||
PricewaterhouseCoopers, Other Overseas Firms | 957,680 | 530,295 | 114,976 | |||||||||
Total remuneration for audit services | 1,197,100 | 685,138 | 455,309 | |||||||||
Other assurance services | ||||||||||||
PricewaterhouseCoopers, PNG Firm | — | 16,026 | 58,115 | |||||||||
PricewaterhouseCoopers, Other Overseas Firms | 422,752 | 625,664 | 54,254 | |||||||||
Total remuneration for other assurance services | 422,752 | 641,690 | 112,369 | |||||||||
Total remuneration for assurance services | 1,619,852 | 1,326,828 | 567,678 | |||||||||
(b) Taxation services | ||||||||||||
PricewaterhouseCoopers | 141,453 | 53,598 | 78,884 | |||||||||
Total remuneration for taxation services | 141,453 | 53,598 | 78,884 | |||||||||
$m | ||||||||
2008 | 2007 | |||||||
Payable | ||||||||
- not later than one year | 2.2 | 0.7 | ||||||
- later than one year but not later than 2 years | 0.9 | 0.5 | ||||||
- later than two years but not later than 5 years | 1.2 | 0.7 | ||||||
- later than 5 years | 0.1 | — | ||||||
4.4 | 1.9 | |||||||
-F- 73 -
Table of Contents
$m | ||||||||
2008 | 2007 | |||||||
Payable | ||||||||
- not later than one year | 0.3 | 0.4 | ||||||
- later than one year but not later than 2 years | 0.2 | 0.4 | ||||||
- later than two years but not later than 5 years | ��� | 0.3 | ||||||
Total minimum lease payments | 0.5 | 1.1 | ||||||
Future finance charges | — | (0.1 | ) | |||||
Total finance lease liability | 0.5 | 1.0 | ||||||
Representing lease liabilities: | ||||||||
Current | 0.3 | 0.3 | ||||||
Non-current | 0.2 | 0.7 | ||||||
0.5 | 1.0 | |||||||
$m | ||||||||
2008 | 2007 | |||||||
Capital expenditure commitments contracted for: | ||||||||
Payable — not later than one year | 83.7 | 9.0 | ||||||
Payable — not later than two years | 13.2 | — | ||||||
96.9 | 9.0 | |||||||
-F- 74 -
Table of Contents
$m | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
Net profit / (loss) attributable to ordinary shareholders | 109.3 | (24.1 | ) | 54.9 | ||||||||
Weighted average number of ordinary shares (thousands) | 2,057.3 | 1,713.8 | 1,284.2 | |||||||||
Basic EPS (cents/share) | 5.3 | (1.4 | ) | 4.2 | ||||||||
Diluted number of ordinary shares (thousands) | 2,058.7 | 1,717.4 | 1,287.5 | |||||||||
Diluted EPS (cents/share) | 5.3 | (1.4 | ) | 4.2 |
$m | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
Weighted average number used in calculating basic earnings per share (in millions) | 2,057.3 | 1,713.8 | 1,284.2 | |||||||||
Adjustments for calculation of diluted earnings per share: | ||||||||||||
Contingently issuable shares | — | 3.3 | — | |||||||||
Effect of share options on issue | 1.4 | 0.3 | — | |||||||||
Weighted average number used in calculating diluted earnings per share (in millions) | 2,058.7 | 1,717.4 | 1,284.2 |
• | to accelerate key stages of the planned process plan expansion at Lihir Island in PNG, taking advantage of changing market conditions that have led to reduced prices and shorter lead-times for components; | ||
• | to position the company for further growth opportunities that emerge, including west Africa; and | ||
• | to provide continued financial strength and flexibility for the group. |
-F- 75-
Table of Contents
-F- 76-
Table of Contents
(Registrant)
Title: Managing Director
163
Table of Contents
Exhibit 1 * | Constitutionof Lihir Gold Limited, effective as of April 28, 1998 (incorporated by reference to Lihir’s annual report on Form 20-F for the fiscal year ended December 31, 2000). | |
Exhibit 4 (a) * | Syndicated Facilities Agreementbetween Lihir Gold Limited, ABN AMRO Australia Limited, ABN AMRO Bank N.V. (Australia Branch), Australia and New Zealand Banking Group Limited, Bayerische Hypo-und Vereinsbank AG, BNP Paribus, Bank of Western Australia Limited, Commonwealth Bank of Australia, Macquarie Bank Limited, National Australia Bank Limited, Natexis Banques Populaires, Societe General, Société Génerale Australia Branch, WestLB AG, and Westpac Banking Corporation dated September 13, 2005 incorporated by reference to Lihir Gold Limited’s annual report on Form 20-F for the fiscal year ended December 31, 2005). | |
Exhibit 4 (b) * | Refinancing Coordination Deed 2005between Lihir Gold Limited, ABN AMRO Australia Limited, ABN AMRO Bank NV, Commonwealth Bank of Australia, Macquarie Bank Limited, Société Génerale and Société Génerale Australia Branch, dated September 13, 2005. (incorporated by reference to Lihir’s annual report on Form 20-F for the fiscal year ended December 31, 2005). | |
Exhibit 4 (c) * | Amending Deed (Security Trust Deed)between Lihir Gold Limited, Niugini Mining Limited, Niugini Mining (Australia) Pty Ltd, ABN AMRO Australia Limited, ABN AMRO Bank NV, Commonwealth Bank of Australia, Macquarie Bank Limited, Société Génerale and Société Génerale Australia Branch, Mitsui & Co. Precious Metals Inc., and J. Aron & Company dated September 13, 2005 (incorporated by reference to Lihir Gold Limited’s annual report on Form 20-F for the fiscal year ended December 31, 2005). | |
Exhibit 4 (d) * | Lihir Gold Security Trust Deedbetween Lihir Gold Limited, Niugini Mining Limited, Niugini Mining (Australia) Pty Ltd, ABN AMRO Australia Limited, ABN AMRO Bank NV, Citibank N.A., and J. Aron & Company dated November 22, 2000 (incorporated by reference to Lihir Gold Limited’s annual report on Form 20-F for the fiscal year ended December 31, 2000). | |
Exhibit 4 (e) * | Lihir Gold Limited Offshore Chargebetween Lihir Gold Limited and ABN AMRO Australia Limited dated September 13, 2005 (incorporated by reference to Lihir Gold Limited’s annual report on Form 20-F for the fiscal year ended December 31, 2005). | |
Exhibit 4 (f) * | Lihir Gold Deed of Security (PNG) 2005between Lihir Gold Limited and ABN AMRO Australia Limited dated September 13, 2005 (incorporated by reference to Lihir Gold Limited’s annual report on Form 20-F for the fiscal year ended December 31, 2005). | |
Exhibit 4 (g) * | Lihir Gold Mortgage of Bullion Accountbetween Lihir Gold Limited and ABN AMRO Australia Limited dated September 13, 2005 (incorporated by reference to Lihir Gold Limited’s annual report on Form 20-F for the fiscal year ended December 31, 2005). | |
Exhibit 4 (h) * | Special Mining Lease, dated as of March 17, 1995, between Lihir Gold Limited and the PNG Government (incorporated by reference to Lihir’s Form F-1 filed September 6, 1995). |
164
Table of Contents
Exhibit 4 (i) * | Mining Development Contract, dated as of March 17, 1995, between Lihir Gold Limited and the PNG Government (incorporated by reference to Lihir’s Form F-1 filed September 6, 1995). | |
Exhibit 4 (j) * | Share Sale and Purchase Agreementbetween Rio Tinto Western Holdings Limited and Lihir Gold Limited dated October 10, 2005 (incorporated by reference to Lihir Gold Limited’s annual report on Form 20-F for the fiscal year ended December 31, 2005). | |
Exhibit 4 (k) * | Technical and Procurement Services Agreementbetween Technological Resources Pty Ltd, Rio Tinto Services Limited and Lihir Gold Limited dated October 10, 2005 (incorporated by reference to Lihir Gold Limited’s annual report on Form 20-F for the fiscal year ended December 31, 2005). | |
Exhibit 4 (l) * | General Termination and Release Deedbetween Lihir Gold Limited, Lihir Management Company Ltd, Rio Tinto Western Holdings Ltd and Rio Tinto plc dated October 10, 2005 (incorporated by reference to Lihir Gold Limited’s annual report on Form 20-F for the fiscal year ended December 31, 2005). | |
Exhibit 4 (m) * | Compensation Agreement for Land, Crops, Water and Air, dated as of April 26, 1995, between Lihir Management Company, Lihir Mining Area Landowners Association Incorporated, Block Executives (for and on behalf of the Landowners), Catholic Mission (Kavieng Property Trust) and the United Church in PNG and the Solomon Islands (incorporated by reference to Lihir Gold Limited’s Form F-1 filed September 6, 1995). | |
Exhibit 4 (n) * | Putput and Ladolam Relocation Agreementdated as of April 26, 1995, between Lihir Management Company, Lihir Mining Area Landowners Association Incorporated and the persons named in various schedules to the agreement (incorporated by reference to Lihir’s Form F-1 filed September 6, 1995). | |
Exhibit 4 (o) * | Integrated Benefits Package Review Status Statement between Nimamar Rural Local Level Government, Lihir Mining Area Landowners Association, the State of Papua New Guinea, New Ireland Provincial Government and Lihir Gold Limited dated November 9, 2005 (incorporated by reference to Lihir Gold Limited’s annual report on Form 20-F for the fiscal year ended December 31, 2005). | |
Exhibit 4 (p) * | Amended and Restated Lihirian Equity Settlement Agreement dated January 27, 2006 between Mineral Resources Development Company Limited, MRL Capital Limited (Formerly Mineral Resources Lihir Limited) and the European Investment Bank (incorporated by reference to Lihir Gold Limited’s annual report on Form 20-F for the fiscal year ended December 31, 2005). | |
Exhibit 4 (q) * | Patent and Know-How License Agreementdated August 5, 1995 between Sherritt Inc and Lihir Management Company Limited for and on behalf of Lihir Gold Limited, together with amendment thereto dated August 18, 1995 (incorporated by reference to Lihir Gold Limited’s annual report on Form 20-F for the fiscal year ended December 31, 2003). | |
Exhibit 4 (r) * | Number not used | |
Exhibit 4 (s) * | Agreement for the Servicesof Professor Ross Garnaut as Chairman of Lihir Gold Limited, dated April 26, 2004 between Lihir and Maccullochella Pty Ltd. (incorporated by reference to Lihir Gold Limited’s annual report on Form 20-F for the fiscal year ended December 31, 2003). | |
Exhibit 4 (t) * | Facility Agreementbetween Lihir Australian Holdings Pty Limited and Australia and New Zealand Banking Group Limited dated October 17, 2006. |
165
Table of Contents
Exhibit 4 (u) * | Deed of Chargebetween Lihir Australian Holdings Pty Limited and Australia and New Zealand Banking Group Limited dated October 19, 2006. | |
Exhibit 4 (v) * | Parent Deposit Agreementbetween Lihir Gold Limited and Australia and New Zealand Banking Group Limited dated February 12, 2007. | |
Exhibit 4 (w) * | Management Services Agreement (PNG)between Lihir Services Australia Pty Limited and Lihir Gold Limited dated May 9, 2006. | |
Exhibit 4 (x) * | Management Services Agreement (Australia) between Lihir Services Australia Pty Limited and Lihir Gold Limited dated May 9, 2006. | |
Exhibit 4 (y) * | Merger Implementation Agreementbetween Lihir Gold Limited, Lihir Australian Holdings Pty Limited and Ballarat Goldfields NL dated October 17, 2006. | |
Exhibit 4 (z) * | Share Subscription Agreementbetween Lihir Australian Holdings Pty Limited and Ballarat Goldfields NL dated October 17, 2006. | |
Exhibit 4 (aa) * | Deed Pollbetween Lihir Gold Limited the holders of fully paid ordinary shares in Ballarat Goldfields NL dated December 12, 2006. | |
Exhibit 4 (ab) * | DNX (Australia) Contractbetween Lihir Gold Limited and DNX Australia Pty Ltd dated January 2, 2008. | |
Exhibit 4 (ac) * | DNX (PNG) Contractbetween Lihir Gold Limited and DNX Papua New Guinea Ltd dated January 2, 2008. | |
Exhibit 4 (ad) * | Revised IBP (Integrated Benefits Package Review Status Statement “LSDP”)between Lihir Gold Limited and the People of Lihir represented by the Mining Area landowners Association Inc and the Nimamer Rural Local-Level Government dated May, 2 2007 | |
Exhibit 4 (ae) * | Gekko Contractbetween Ballarat Goldfields NL and Gecko Systems Pty ltd made on March 26, 2007. | |
Exhibit 4 (af) * | Spinefex Contractbetween Ballarat Goldfuields NL and Spinefex Projects Pty Ltd made on or about May 12, 2005. | |
Exhibit 4 (ag) * | Pybar Contractbetween Ballarat Goldfields NL and Pybar Mining Services Pty Ltd made on October 18, 2004. | |
Exhibit 4 (ah) * | Washingtons Drilling Contractbetween Lihir Gold Limited and Washingtons Drilling (international) Limited NZ made on August 2, 2007. | |
Exhibit 4 (ai) * | Merger Implementation Agreementbetween Lihir Gold Limited, Lihir Australian Holdings Pty Ltd and Equigold NL made on March 20, 2008. | |
Exhibit 4 (aj) * | Lihir Executive Share Plan (LESP)for Lihir Gold Limited approved by shareholders on April 24, 2007. | |
Exhibit 4 (ak) | Spinefex Projects Pty Ltd & Gekko Systems Pty Ltd amendment letter dated June 2008 to the Spinefex Contract between Ballarat Goldfuields NL and Spinefex Projects Pty Ltd made on or about May 12, 2005. | |
Exhibit 4 (al) | AGR Matthey Gold Refining Contractbetween Lihir Gold Limited and AGR Matthey (a partnership between the Western Australian Mint, Australian Gold Alliance Pty Ltd and Johnson Matthey (Aust.) Ltd) made on March 1 2008. |
166
Table of Contents
Exhibit (am) | Metalor Gold Refining Contractbetween Equigold Mines CI SA and Metalor Technologies SA made on August 28, 2008. | |
Exhibit (an) | Oxygen Plant Contractbetween Lihir Gold Limited and Air Products PLC made on May 2, 2008. | |
Exhibit (ao) | Autoclave Contractbetween Lihir Gold Limited and WE Smith Engineering Pty Ltd made on October 10, 2008. | |
Exhibit (ap) | Grinding Mills Agreementbetween Lihir Gold Limited and FLSmidth Minerals Pty Limited made on May 8, 2008. | |
Exhibit 8 | Significant subsidiaries | |
Exhibit 12 (a) | 302 Certification by Chief Executive Officer | |
Exhibit 12 (b) | 302 Certification by Chief Financial Officer | |
Exhibit 13 (a) | 906 Certification by Chief Executive Officer | |
Exhibit 13 (b) | 906 Certification by Chief Financial Officer |
* | Indicates exhibits lodged with SEC in previous Form 20-Fs. |
167