Thursday, 20th March 2008 (3634 views)

Australian mining firms Lihir Gold and Equigold are to merge, the companies have announced.

The deal will bring operations in Australia, west Africa and Papua New Guinea under a single banner. In total, the combined assets of Lihir and Equigold are expected to produce 1.2 million ounces of gold from 2009.

For Equigold, the deal means it will have access to Lihir's greater financial resources, while for Lihir's part, the merger will enable it to diversify its gold mining interests.

According to the companies, the merged group will also have "exceptional" growth potential. Equigold currently has a holding in the Bonikro project - which is expected to produce 140,000 to 150,000 ounces of gold a year from July - and the Ballarat mine, where production is due to get underway by the end of year with a target of 200,000 ounces of gold per annum.

Lihir Gold, meanwhile, has production forecasts of between 700,000 and 770,000 ounces of gold this year, rising to one million ounces by 2011.

In addition to existing assets, both companies also have a number of exploration targets.

The proposed merger remains subject to the approval of Equigold shareholders and regulatory approval.

Lihir Gold was established following the discovery of gold mineralisation in 1982, while Equigold was incorporated in 1993 to carry out gold exploration in Vietnam and Ghana.

 

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