The company is aiming to produce 1.45 million oz/y on average for the five years from 2012 to 2016, rising to an average of approximately 1.5 million oz/y for the following five years to 2021. This represents an increase of about 50% from 2010 production of 960,000–1.06 million oz.

Chief Executive Phil Baker explained LGL’s medium- to long-term production targets for its existing mines at the BMO Capital Markets 2010 Global Metals & Mining Conference in Florida.

“After four years of record production, which have seen LGL lift output to more than 1 million ounces per year in 2009, the company is now well advanced in expanding its Lihir Island and Bonikro mines to deliver further significant production growth over the coming years,” he said.

The increase in annual gold production is primarily driven by LGL’s current expansion projects:
• The Million Ounce Plant Upgrade project at Lihir Island will lift production to more than 1 million oz/y from 2012. With a budget of $940 million, this project will raise ore processing capacity at the operation by approximately two-thirds. According to the company, construction of the facility is on track and within budget for completion by the end of next year.
• At the Bonikro mine in Cote d’Ivoire in West Africa, an expansion of processing capacity and the simultaneous development of new higher grade satellite ore deposits are the subject of a feasibility study due for completion by the end of the third quarter of 2010. Production at Bonikro is anticipated to increase from 110- 130,000 oz/yin 2010 to an average of 250,000 oz/y for the five years from 2012 to 2016. The capital cost of the expansion is expected to be below $100 million.

“Over the past few years we have demonstrated at our flagship Lihir operation consistent and reliable performance, with the process plant operating well above name plate capacity. This gives us confidence that we can achieve the production outcomes outlined for the first five years after commissioning the expanded plant. This will then lead to higher production in the following five years, when higher grade ore is sourced from the next stage of the Lihir Island mine—the Kapit pit,” Baker said.

“We have at Lihir Island one of the world’s largest gold deposits. Before starting production in 1997, Lihir Island had 14 million ounces of reserves, ranking it at the time as world-class. Despite producing approximately 8 million ounces of gold during the past 13 years, our resource extension drilling programs during this time have enabled us to lift the reserve to almost 29 million ounces, and we would expect to find more gold and add to our resources and reserves at Lihir in the future,” Baker said.