PERTH (miningweekly.com) – Australia-listed Lihir Gold would complete the expansion project at its Lihir Island operations, in Papua New Guinea, in 2011, lifting its flagship mine’s production capacity to over one-million ounces a year.

The company, which is merging with Newcrest Gold to create the world’s fourth-largest listed gold miner, said on Wednesday that good progress was being made at its Papua New Guinea expansion project and its growth project in the Cote d’Ivoire.

In the quarterly report for the three months ended June, Lihir MD Graeme Hunt noted that significant civil construction progress had been made on site, and that the structural work had started.

Meanwhile, Hunt reported that the gold miner had produced 244 000 oz of gold during the June quarter, which was up 6% from the preceding March quarter.

“The second quarter of 2010 was a solid quarter for the company, with production on track to meet full-year guidance,” said Hunt, referring to the group’s target to produce between one-million ounces and 1,1-million ounces in 2010.

The Lihir Island operations would produce between 800 000 oz and 870 000 oz this year.

At Lihir Island, production totalled 197 000 oz in the June quarter, which was up by 9% compared with the previous quarter. Hunt noted that material movements increased by 19% owing to improvements in mining, but a scheduled major overhaul of one of the three autoclaves in the process plant caused throughputs to be lower than the previous quarter.

However, a significant increase in the gold grade enabled overall production to be increased, Hunt said.

Production at the Bonikro operations, in Cote d’Ivoire, totalled 23 000 oz for the quarter ended June. This was lower than the March quarter, owing to high rainfall and unscheduled maintenance in the mining fleet, which reduced mining tonnages and lowered mill feed grade.

Hunt noted that the feasibility study to examine the expansion of the Bonikro project continued during the quarter, and was expected by the end of March.

The Bonikro expansion involves the development of a satellite mine at the Hire deposit, around 10 km from the existing pit, to support an expansion of the plant from two-million tons a year to 3,5-million tons a year.

This would lift production to between 200 000 oz/y and 250 000 oz/y from 2012.

Meanwhile, the Australian Mount Rawdon operation, in Queensland, produced 24 000 oz in the three months ended June 30. This was higher than the previous quarter, owing to increased plant throughput following the scheduled shutdown in the first quarter.

Meanwhile, Lihir shareholders were expected to vote on the proposed merger with gold major Newcrest next month, with the scheme expected to be completed by September 13.

“The company is well placed to complete its merger with Newcrest, creating a strong and vibrant new gold major with a first-class portfolio of producing mines, and an exciting growth profile,” Hunt said.

“The combined company has an excellent future and promises to deliver strong returns to shareholders.”