LHG - Lihir Gold

Lihir best value around?

I have spent a good month earlier this year in an attempt to research the best buys around. Lihir I decided was certainly the best around where I believed buying @ 94cents would reap some dollars for me without a great deal of risk attached. I have sold and bought on the way upto $1.21, today LHG sits @ $1.06 I am still very optimistic and see $1.40 a distinct possibly obviously linked with a rise in the gold price does anybody else hold any views on LHG.

Re: Lihir best value around?

Here's a chart.

Cheers,
GP

Re: Lihir best value around?

Hi GreatPig,

still to early to tell in the T/A, there are small warning signs of a reversal happening... but no hard confirmation yet... alot of the momentum indicators are still showing the stock, bouncing down... wait another day or 2 more, for more further confirmation...

Cheers,
sis

Re: Lihir best value around?

Up 2.75% today 1.09 to 1.12
I guess when you look at all the good things happening within Lihir a return to a price of even $1.70 is possible.
Lihir has the past well and truely behind it.
Management is working diligently and hard to ensure that Lihir Gold continues to improve its operating reliability, gold production, cost and capital management. The company is in as sound a position in these respects as it has been in its operating history and look forwards to continued improvements to come. The past couple of years have been challenging as they have uncovered a number of processing issues as a result of pushing the plant ever harder and while they are mining lower grade gold ores from the base of the original Minifie pit. However, they have undertaken a programme to both improve reliability and remove processing bottlenecks during the past 2 years and have far greater confidence in they processing capabilities. In addition, 2005 sees them move back to higher grades as the transition to the Lienetz pit is completed.
They are constructing a geothermal power plant, due to be commissioned in April, to save considerable costs associated with power generation by means of oils. They are also exploring total conversion to this energy source at present.
The current share price generally reflects the market’s view of the company’s financial and operating performance and position, and a view of its future coloured by its history. However, it is also tied closely to the gold price and this is where if the POG were to rise to $430-450 combined with all the good things coming into place maybe $2.00 is achievable.
Go Lihir.

Re: Lihir best value around?

Hello there,

I've heard that some of the upside via link to the gold price may be limited because of hedging. I heard a figure of 40pc from once side and 14pc from another. I didn't really follow up the info as I mainly look at the charts but it's worth noting (ie the level of hedging).

Eitherway a lot of people say it's highly leveraged to the gold price so I'm watching how it moves in relation to gold more than anything else. I prefer smaller gold stocks though till LHG completes this reversal pattern (see my September stock pick and OGD, OXR, BGF etc). You did well to buy below $1 as that has become a solid support level. Again, we'll have to wait to see where this pattern ends up.

RichKid

Re: Lihir best value around?

Looks like another opp to purchase coming around mid/low 90's seems to be a lot of selling maybe associated with the demise of SGW - some ignorance around hedging is currently driving the price down.
See below my post from another site

It seems you and a few others may be wrong on LHG
I dont see them as being in trouble their hedging and reserve position in no way resembles that apparently held by SGW. The published reserves stand at 20.4 million ounces at present and only 10% of those published reserves are hedged in accordance with their Board policy. This is in comparison with SGW who, from published accounts, had very high levels of hedging and far lower reserves. In addition, the LHG hedge book (which is included in each of their quarterly reports) is simple and contains neither margin calls nor currency hedging. Of forward annual production over the next 5 years, between 30 and 60% is hedged with no hedging extending beyond that period. LHG have been rolling out hedges over the past 4 or so quarters to take advantage of higher spot prices. There is nothing to suggest that this process will not be able to be continued in the event it makes commercial sense for them to do so with the higher gold prices that will come. Alternatively, LHG production profile will readily accommodate meeting their hedge obligations should they elect to do so.
SGW has certainly had an effect on LHG but there is really no need to panic and sell, however it will be interesting to see where the price will end up looks like mid/low 90's it will present a good buying opp.

Re: Lihir best value around?

Lihir does not excite me at the momment, I decided to exit and lost some money as I cant see it doing anything due to the fallout from Sons and the inability of the POG to cross $410 and move up. I dont see this going anywhere now until we have the Sept Qtr results unless gold moves rapidly up. Win some lose some - big sum. Oh well- move on.

LHG Wave 4?

A question for the EW followers

On the weekly would LHG be considered to be at wave 4 and entering wave 5 on the breakout or is the sideways move to convoluted?

Focus

LHG rights issue

Just interested in LHG holders and there musings on the rights issues and if people are taking up their allocations.

Also as soon as the rights issue has blown over and hedging unwound I assume the stock would track more in line with the price of gold?

Re: LHG rights issue

**** yeah.
Buying shares for $2.30 that are worth $3.00.
No brainer.

al