Lihir slashes production target at Ballarat as output stalls

Australian gold mining company Lihir has announced today (October 29th) that it has cut its initial production targets set for 2008, 2009 and 2010 at its Ballarat gold mine.

The company originally predicted that it would be able to produce between 40,000 and 50,000 ounces by the end of the year as it continues its AUS$200 million redevelopment of the site.

However, it has now been forced to admit that output has stalled and that a target of 20,000 ounces is more likely for this year, while it is now looking to hit 100,000 ounces in 2009.

Managing director Arthur Hood has explained that the poor performance can be put down to equipment shortages linked to the switch from contractor to owner-operator in June and July and delays in completing ventilation paths.

He told the Age: "[We will] have to reassess the slower ramp-up in our budget process and give guidance on that in January."

Whether the company can resolve these issues remains to be seen, but investors will be keeping a close eye on developments as further output issues could aid any gold price rises.

Lihir originally claimed that it would be able to produce between 200,000 and 250,000 ounces per year at Ballarat by 2010.

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