##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 FORM 20-F
 o
    
    REGISTRATION STATEMENT PURSUANT TO SECTION 12(b)
OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
 OR
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended: December 31, 2007
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number: 2-6860
 Lihir Gold Limited
  
 Company contact person:
Mr Stuart MacKenzie
0011 617 3318 3300Stuart.MacKenzie@LGLgold.com
Level 9, 500 Queen Street
Brisbane
Queensland, Australia, 4000
 
   
  Lihir Gold Limited Ordinary Shares of no par value
    
    NASDAQ Global Market*American Depositary Shares, each of which represents ten
    
    NASDAQ Global MarketLihir Gold Limited Ordinary Shares and which areevidenced by American Depositary Receipts
 
  
  
 
  Lihir Gold Limited Ordinary Shares of no par value:
    
    1,904,497,244 fully paid shares(including 585,984 Restricted Executive Shares)Lihir Gold Limited Treasury B Shares
    
    161,527,405
 
  þ o
  o þ
   þ o
  þ o o
  o
    
    USGAAPþ
    
    International Financial Reporting Standards as issued by the International Accounting Standards Boardo
    
    Other
  
 If this is an Annual Report, indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act)
 o þ




---



##### 



TABLE OF CONTENTS
 Certain Definitions
    
    
    1Looking Forward Statements
    
    
    1Item 1. Identity of Directors, Senior Management, and Advisors
    
    
    2Item 2. Offer Statistics and Expected Timetable
    
    
    2Item 3. Key Information
    
    
    3A. Selected Financial Data
    
    
    3B. Capitalisation and Indebtedness`
    
    
    5C. Reasons for the Offer and Use of Proceeds
    
    
    5D. Risk Factors
    
    
    6Item 4. Information on the Company
    
    
    15A. History and Development of the Company
    
    
    15B. Business Overview
    
    
    17C. Organizational Structure
    
    
    33D. Property, Plant and Equipment
    
    
    35Item 4A. Unresolved Staff Comments
    
    
    48Item 5. Operating and Financial Review and Prospects
    
    
    49A. Operating Results
    
    
    49B. Liquidity and Capital Resources
    
    
    61C. Research and Development, Patents and Licenses, etc
    
    
    62D. Trend Information
    
    
    63E. Off-Balance Sheet arrangements
    
    
    63F. Tabular Disclosure of Contractual Obligations
    
    
    64G. Recently issued IFRS Standards
    
    
    64Item 6. Directors, Senior Management and Employees
    
    
    65A. Directors and Senior Management
    
    
    65B. Compensation
    
    
    68C. Board Practices
    
    
    78D. Employees
    
    
    84E. Share Ownership
    
    
    85Item 7. Major Shareholders and Related Party Transactions
    
    
    86A. Major Shareholders
    
    
    86B. Related Party Transactions
    
    
    88C. Interests of Experts and Counsel
    
    
    88Item 8. Financial Information
    
    
    89A. Consolidated Statements and Other Financial Information
    
    
    .89B. Significant changes
    
    
    89Item 9. The Offer and Listing
    
    
    90Item 10. Additional Information
    
    
    91A. Share Capital
    
    
    91B. Memorandum and Articles of Association
    
    
    91C. Material Contracts
    
    
    95D. Exchange Controls
    
    
    104E. Taxation
    
    
    105F. Dividends and Paying Agents
    
    
    107G. Statement by Experts
    
    
    107H. Documents on Display
    
    
    107I. Subsidiary Information
    
    
    107Item 11. Quantitative and Qualitative Disclosure about Market Risk
    
    
    108A. Quantitative Information about Market Risk
    
    
    108B. Qualitative Information about Market Risk
    
    
    108Item 12. Description of Securities Other than Equity Securities
    
    
    109PART IIItem 13. Defaults, Dividend Arrearages and Delinquencies
    
    
    110Item 14. Material Modifications to the Rights of Security Holders and use of Proceeds
    
    
    110Item 15. Controls and Procedures
    
    
    111A. Evaluation of Disclosure Controls and Procedures
    
    
    111B. Managements Report of the registered public accounting firm
    
    
    111C. Attestation report of the registered public accounting firm
    
    
    111D. Changes in internal control over financial reporting
    
    
    111Item 16A. Audit Committee Financial Expert
    
    
    112Item 16B. Code of Ethics
    
    
    112Item 16C. Principal Accountant Fees and Services
    
    
    113Item 16D. Exceptions from Listing Standards for Audit Committees
    
    
    114Item 16E. Purchases of Equity Securities by Issuer and Affiliates
    
    
    114EX-99.4.AB: DNX CONTRACTEX-99.4.AC: DNX PNG CONTRACTEX-99.4.AD: REVISED IBPEX-99.4.AE: GEKKO CONTRACTEX-99.4.AF: SPINIFEX CONTRACTEX-99.4.AG: PYBAR CONTRACTEX-99.4.AH: WASHINGTONS DRILLING CONTRACTEX-99.4.AI: MERGER IMPLEMENTATION AGREEMENTEX-99.4.AJ: LESPEX-99.8: SIGNIFICANT SUBSIDIARIESEX-99.12.A: CERTIFICATIONEX-99.12.B: CERTIFICATIONEX-99.13.A: CERTIFICATIONEX-99.13.B: CERTIFICATION
  i




---



##### Table of Contents



PART IIIItem 17. Financial Statements
    
    
    115Glossary of Certain Technical Terms
    
    
    116Conversion Table and Unit Equivalents
    
    
    120Item 18. Financial Statements
    
    
    F-1  F-67Item 19. Exhibits
    
    
    121Exhibit 4 (ab): DNX (Australia) ContractExhibit 4 (ac): DNX (PNG) ContractExhibit 4 (ad): Revised IBP (Integrated Benefits Package review Status Statement (LSDP))Exhibit 4 (ae): Gekko ContractExhibit 4 (af): Spinafex ContractExhibit 4 (ag): Pybar ContractExhibit 4 (ah): Washingtons Drilling ContractExhibit 4 (ai): Merger Implementation AgreementExhibit 4 (aj): Lihir Executive Share Plan (LESP)Exhibit 8: Substantial SubsidiariesExhibit 12A: CertificationExhibit 12B: CertificationExhibit 13A: CertificationExhibit 13B: Certification
 ii




---



##### Table of Contents



Certain Definitions
     Corporations Act
          
 Forward Looking Statements
   1




---



##### Table of Contents



PART I
 
 Item 1. Identity of Directors, Senior Management, and Advisors
  
 Item 2. Offer Statistics and Expected Timetable
  2




---



##### Table of Contents



Item 3. Key Information
 
 A.
    
    Selected Financial Data
   Year ended December 31,(In $ millions, except where indicated)2007
    
    2006
    
    2005
    
    2004
    
    2003Amounts calculated in accordance with IFRS:Statements of Comprehensive Income data:Revenue (1)
    
    
    498.4
    
    
    
    386.0
    
    
    
    263.9
    
    
    
    246.1
    
    
    
    211.4Operating profit before other income/(expense)(2)
    
    
    195.9
    
    
    
    156.2
    
    
    
    59.7
    
    
    
    27.1
    
    
    
    33.6Net profit / (loss) after tax (3)
    
    
    (24.1
    )
    
    
    53.8
    
    
    
    9.8
    
    
    
    329.2
    
    
    
    34.8Earnings per share, basic and diluted (4)
    
    
    (0.014
    )
    
    
    0.042
    
    
    
    0.008
    
    
    
    0.256
    
    
    
    0.030Cash dividends per ordinary share (5)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.016Number of ordinary shares (millions) (6)
    
    
    1,903.9
    
    
    
    1,284.2
    
    
    
    1,284.2
    
    
    
    1,284.2
    
    
    
    1,282.3Statements of Financial Position data(7):Total assets
    
    
    2,305.6
    
    
    
    1,496.0
    
    
    
    1,319.4
    
    
    
    1,156.9
    
    
    
    748.9Cash and current receivables held
    
    
    189.1
    
    
    
    51.6
    
    
    
    133.2
    
    
    
    88.7
    
    
    
    163.2Current liabilities
    
    
    77.8
    
    
    
    177.3
    
    
    
    80.8
    
    
    
    104.3
    
    
    
    60.3Long term obligations
    
    
    66.7
    
    
    
    506.8
    
    
    
    455.1
    
    
    
    215.4
    
    
    
    227.2Total shareholders equity (8)
    
    
    2,161.1
    
    
    
    811.9
    
    
    
    783.5
    
    
    
    837.2
    
    
    
    461.4Paid up capital (9)
    
    
    2,319.7
    
    
    
    1,027.1
    
    
    
    1,027.5
    
    
    
    1,027.5
    
    
    
    1,025.3Expenditure and Financing Data:Net cash flow from operating activities
    
    
    (270
    )
    
    
    57.3
    
    
    
    (54.5
    )
    
    
    30.3
    
    
    
    16.7Total expenditure on investing activities
    
    
    (178.6
    )
    
    
    (203.3
    )
    
    
    (99
    )
    
    
    (87.6
    )
    
    
    (26.8
    )Financing activities:Issuance of ordinary shares
    
    
    977.4
    
    
    
    
    
    
    
    
    
    
    
    2.2
    
    
    
    151.5Drawdown of term debt
    
    
    22.4
    
    
    
    65.6
    
    
    
    245.5
    
    
    
    
    
    
    
    Repayment of loans
    
    
    (421.6
    )
    
    
    
    
    
    
    (49.5
    )
    
    
    (14.0
    )
    
    
    (7.0
    )Dividend paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (14.2
    )Purchase of treasury shares
    
    
    (1.3
    )
    
    
    (0.4
    )
    
    
    
    
    
    
    
    
    
    
    Total financing activities
    
    
    576.9
    
    
    
    65.2
    
    
    
    139.6
    
    
    
    (11.8
    )
    
    
    130.3
 3




---



##### Table of Contents



(1)
    
    Alternative terminology: net sales or operating revenues.(2)
    
    Alternative terminology: income/(loss) from operations or
income/(loss) from continuing operations.(3)
    
    Alternative terminology: Net income/(loss) since the Company has no
discontinued operations(4)
    
    Alternative terminology: net income/(loss) from operations per share
or income/(loss) from continuing operations per share. To date the
Company paid only one dividend of $0.016 ($A0.02) per share on July
16, 2003.(5)
    
    In US$  per share.(6)
    
    As adjusted to reflect changes in capital.(7)
    
    At period end.(8)
    
    Alternative terminology: net assets.(9)
    
    Alternative terminology: capital stock. 4




---



##### Table of Contents



B.
    
    Capitalization and Indebtedness
  
 C.
    
    Reasons for the Offer and Use of Proceeds
  5




---



##### Table of Contents



D.
    
    Risk Factors
  1.
    
    The Company is currently dependant on a single mine
  2.
    
    The Lihir operation may be adversely affected by difficult geological
conditionsa.
    
    Hydrological and geothermal risks
     b.
    
    Volcanic activity risks
  6




---



##### Table of Contents



c.
    
    Landslide risks
  i.
    
    extension of the North Kapit Stockpile;ii.
    
    higher than long term average rainfall over the previous six
months prior to the landslide; andiii.
    
    a magnitude 7.7 earthquake on September 9, 2005.
  (a)
    
    flow of water into tension cracks and blockage of
subsurface drainage;(b)
    
    geothermal activity; and(c)
    
    loss of side restraint and extension upslope.
  3.
    
    Delays or cost overruns in the development of the MOPU Project could have a material adverse
effect on the Companys business and financial performance.
   4.
    
    The Companys business is subject to construction, commissioning and other operational risks
    7




---



##### Table of Contents



5.
    
    The Companys insurance may not address all operating risks
   6.
    
    The Company is subject to PNG political risks
    7.
    
    The Company is vulnerable to civil unrest in PNG
  8.
    
    The Company is vulnerable to landowner compensation issues
  8




---



##### Table of Contents



9.
    
    The Companys results are dependent upon gold prices determined by the market
     .
 9




---



##### Table of Contents



Price in $ Per Ounce of GoldYear
    
    High
    
    Low
    
    Average1988
    
    
    484
    
    
    
    395
    
    
    
    4371989
    
    
    416
    
    
    
    356
    
    
    
    3811990
    
    
    424
    
    
    
    346
    
    
    
    3841991
    
    
    403
    
    
    
    344
    
    
    
    3621992
    
    
    360
    
    
    
    330
    
    
    
    3441993
    
    
    406
    
    
    
    326
    
    
    
    3601994
    
    
    396
    
    
    
    370
    
    
    
    3841995
    
    
    396
    
    
    
    372
    
    
    
    3841996
    
    
    415
    
    
    
    367
    
    
    
    3971997
    
    
    366
    
    
    
    283
    
    
    
    3311998
    
    
    313
    
    
    
    273
    
    
    
    2941999
    
    
    326
    
    
    
    253
    
    
    
    2792000
    
    
    313
    
    
    
    264
    
    
    
    2792001
    
    
    293
    
    
    
    256
    
    
    
    2712002
    
    
    349
    
    
    
    278
    
    
    
    3102003
    
    
    416
    
    
    
    319
    
    
    
    3632004
    
    
    454
    
    
    
    375
    
    
    
    4092005
    
    
    537
    
    
    
    411
    
    
    
    4452006
    
    
    725
    
    
    
    525
    
    
    
    6032007
    
    
    841
    
    
    
    608
    
    
    
    6952008 (to March 31)
    
    
    1,011
    
    
    
    847
    
    
    
    925
 10.
    
    The Companys prospects are partly dependent on reserves estimates and future experience
    11.
    
    The Company cannot guarantee it can obtain all the mining and processing inputs required for
its operations, including staff
   10




---



##### Table of Contents



12.
    
    The Company is subject to the effects of rising oil prices
  13.
    
    The Company has limited financial resources
  14.
    
    The Companys operations are subject to environmental risks
   15.
    
    The Companys mining and exploration rights may be terminated under PNG law
 Mining Act 1992
   11




---



##### Table of Contents



16.
    
    The Company is vulnerable to a limited market for the Kina and foreign exchange controls
     17.
    
    The Companys dividends to U.S. shareholders are subject to withholding tax
  18.
    
    The Companys shareholders are subject to different rights under certain circumstances
  19.
    
    Difficulty may be experienced in the pursuit of litigation against the Company or its executive
officers, directors, or experts who are not resident in the United States
  
    
    the presence of the person to be served within the jurisdiction
of the relevant court; or
    
    the consent of that person to receive service outside the
jurisdiction.
   12




---



##### Table of Contents



20.
    
    The Ballarat operation is exposed to exploration risk and uncertainty of development projects
  
    
    establish the presence, and to quantify the extent and grades (metal content), of mineralized
material through exploration drilling;
    
    determine appropriate metallurgical recovery processes to extract gold
from the ore;
    
    estimate ore reserves;
    
    construct, renovate or expand mining and processing facilities.
   21.
    
    The Ballarat operation does not have ore reserves and due to the nature of the mineralization,
may never have reserves
   13




---



##### Table of Contents



22.
    
    The Ballarat operation is subject to unstable ground conditions
   23.
    
    The Ballarat operation is in an urban setting and is vulnerable to adverse community relations
  24.
    
    The Company is subject to strikes, work slowdowns and other industrial relations risk
    14




---



##### Table of Contents



Item 4.
    
    Information on the Company
 
 
 A. History and Development of the Company
 (i) Introduction
 Companies Act
 Lihir Operation
       15




---



##### Table of Contents



(ii) Capital Expenditures
  Capital Expenditure 2005  2007
 (in US$ millions)
    
    2007
    
    2006
    
    2005Lihir
    
    
    156.5
    
    
    
    185.9
    
    
    
    99.5Ballarat
    
    
    65.9
    
    
    
    
    
    
    
    Corporate
    
    
    0.3
    
    
    
    1.8
    
    
    
    222.7
    
    
    
    187.7
    
    
    
    99.5
        16




---



##### Table of Contents



B. Business Overview
  Mining Act 1992
 2 2
 Description of Operations
 Overview  Lihir Operation
   
    
    it enables the treatment of ore into a higher grade sulphide concentrate for pressure
oxidation feed, and
    
    sensitivity analyses indicate that the flotation expansion has a lower risk profile than the
current plant configuration case, because it is less sensitive to most adverse variations in
sulphur feed types.
  Current Plant Flowchart
 
 Plant Flowchart after Flotation Installation
 
 17




---



##### Table of Contents



Mining
 General
     2007
    
    2006
    
    2005High-grade sulphide ore (K tonnes)
    
    
    6,111
    
    
    
    4,204
    
    
    
    3,518High-grade sulphide ore (g Au/t)
    
    
    5.14
    
    
    
    5.51
    
    
    
    6.11Low-grade sulphide ore (K tonnes)
    
    
    4,380
    
    
    
    3,751
    
    
    
    5,857Low-grade sulphide ore grade (g Au/t)
    
    
    2.32
    
    
    
    2.27
    
    
    
    2.05Total Ore (K tonnes)
    
    
    10,491
    
    
    
    7,955
    
    
    
    9,375Total Ore grade (g Au/t)
    
    
    3.96
    
    
    
    3.98
    
    
    
    3.57Total Waste (K tonnes)
    
    
    47,769
    
    
    
    48,195
    
    
    
    32,177Total Material (K tonnes)
    
    
    58,260
    
    
    
    56,150
    
    
    
    41,552
 Pit Design and Planning
   o o o o o
  Production Scheduling
  18




---



##### Table of Contents



Mill Throughput
  Plant Optimisation for selected Pulp Density and Sulphur grades
 
 Sulphide sulphur grade in autoclave feed solids
 Assumptions:      3
 Plant Optimisation for selected Hardness/Work Index and Sulphur grades
 
 Sulphur Grade (%)
 19




---



##### Table of Contents



Metallurgical Recovery
   Recovery = (0.033*LN(Ore grade)+0.8576)
  Sulphide Content.
 Economic Grade Ore Stockpiles.
 Waste Rock Disposal.
 Dewatering and Geothermal Control.
   20




---



##### Table of Contents



Blasting.
 Mine Drainage.
 Mining Equipment.
  Processing
 General.
   21




---



##### Table of Contents



Crushing.
  Stockpiling and Blending.
   Grinding and Thickening.
  Pressure Oxidation.
 22




---



##### Table of Contents



Energy
  CCD Washing and Neutralization.
   CIL Processing.
 Gold Recovery.
    Tailings Disposal.
  23




---



##### Table of Contents



Economic Grade Ores.
 §
    
    The heat recovery circuit commissioned in the third quarter of 2001
enables the pressure oxidation circuit to treat a lower grade of sulphide in ore feed.§
    
    Flotation plant capacity provides an opportunity to increase the sulphide
grade of stockpile ore.§
    
    Blending of stockpile ores combined with operation of the flotation
circuit will enable feeding of the autoclave circuit at the optimum sulphur level.
 Limestone Deposits.
 Infrastructure.
     MOPU Project
   24




---



##### Table of Contents



Processing Period after 2021
    Symbol
    
    Production Parameter
    
    Unit
    
    ValueA
    
    Estimated Stock Pile Material
    
    Mtonnes
    
    137B
    
    Plant Annual Throughput
    
    Mtonnes
    
    7.2(calculation = A/B)
    
    years
    
    19C
    
    Gold Grade  average
    
    Au g/t
    
    2.03D
    
    Plant Recovery
    
    %
    
    77.5%E
    
    Conversion
    
    grams to ounces
    
    31.1035
 Approximate Annual Production ounces 365,000 (calculation = B*C*D/E)]
  Note
 Logistics
  Workforce
  25




---



##### Table of Contents



Community Affairs
   The Original IBP
      The Revised IBP  LSDP
  Equity Participation
  26




---



##### Table of Contents



2007

    
    
    
    2006
    
    
    
    2005Kina millions
    
    
    55.4
    
    
    
    42.1
    
    
    
    28.1US$ millions equivalent
    
    
    20.9
    
    
    
    14.8
    
    
    
    9.5
  Business Development -
    Education Assistance
 Occupational Health and Safety
  27




---



##### Table of Contents



Security
    Safety Performance
   1998
    
    1999
    
    2000
    
    2001
    
    2002
    
    2003
    
    2004
    
    2005
    
    2006
    
    2007LTI
    
    
    12
    
    
    
    11
    
    
    
    11
    
    
    
    16
    
    
    
    11
    
    
    
    12
    
    
    
    13
    
    
    
    12
    
    
    
    5
    
    
    
    2LTIFR
    
    
    2.05
    
    
    
    1.70
    
    
    
    1.75
    
    
    
    2.30
    
    
    
    1.80
    
    
    
    1.50
    
    
    
    1.50
    
    
    
    1.53
    
    
    
    0.53
    
    
    
    0.18
    Community Health
 Overview  Ballarat Operation
 
 28




---



##### Table of Contents



Recovery Flowsheet
 
  Mining
 General.
  29




---



##### Table of Contents



2007
    
    
    2006
    
    
    2005Development (m)
    
    
    3280
    
    
    
    2890
    
    
    
    1861Total Ore (tonnes)
    
    
    24,998
    
    
    
    20,897
    
    
    
    9,880Total Ore (g Au/t)
    
    
    3.32
    
    
    
    3.32
    
    
    
    2.23Total Waste (tonnes)
    
    
    217,300
    
    
    
    191,463
    
    
    
    123,291Total Material (tonnes)
    
    
    242,298
    
    
    
    212,360
    
    
    
    133,171
 Underground Mine Design and Planning.
    Production Scheduling.
 Waste Rock Disposal.
 Mine Dewatering.
 Ventilation.
 Processing
 General.
  Crushing.
 30




---



##### Table of Contents



Gravity Circuit.
   Gold Room.
   Concentrate Leaching.
  Tailings Storage Facility. 3
    Infrastructure.
   31




---



##### Table of Contents



Community Affairs & Management Systems
      Environmental performance
       32




---



##### Table of Contents



C. Organizational Structure
       33




---



##### Table of Contents



34




---



##### Table of Contents



D. Property, Plant and Equipment
 Lihir operation
  Mining Rights
    Lihir Island (Aniolam Island)
     Geology
   35




---



##### Table of Contents



36




---



##### Table of Contents



37




---



##### Table of Contents



Reserves Estimates
     ContainedReserve
    
    Tonnes
    
    Average grade
    
    OuncesCategory
    
    (In millions)
    
    (g Au/t)
    
    (millions)Un-mined Ore
    
    Proven
    
    
    0
    
    
    
    0
    
    
    
    0Probable
    
    
    200.4
    
    
    
    2.87
    
    
    
    18.5Economic Stockpiled Ore*
    
    Proven
    
    
    53.8
    
    
    
    2.52
    
    
    
    4.4Total Reserves
    
    
    
    
    
    
    254.2
    
    
    
    2.80
    
    
    
    22.9* Economic Stockpiled OreHigh Grade
    
    
    4.5
    
    
    
    3.61
    
    
    
    0.5Low Grade
    
    
    49.3
    
    
    
    2.42
    
    
    
    3.8Total Stockpiled
    
    Proven
    
    
    53.8
    
    
    
    2.52
    
    
    
    4.4
         38




---



##### Table of Contents



Exploration
       Ballarat operation
 2 2
 39




---



##### Table of Contents



Geology  Ballarat East
     40




---



##### Table of Contents



Mineralisation
       Fine Grained Gold (0.0 to 0.3 mm)
    
    
    9
    %Coarse Grained Gold (0.3 to 1.2 mm)
    
    
    41
    %Very Coarse Gold (>1.2 mm)
    
    
    50
    %
  
  41




---



##### Table of Contents



Reserve estimates
    Exploration
 
    
    Ballarat East
  
    
    Ballarat West
    
    
    Ballarat South
    
    
    Berringa
    42




---



##### Table of Contents



Environmental Considerations at the Lihir Operation
 Overview
          43




---



##### Table of Contents



Environmental Plan
   Land and Habitat Impacts
    Waste Rock and Marine Impacts
    44




---



##### Table of Contents



Stockpile Drainage
   Tailings Disposal
      45




---



##### Table of Contents



Rehabilitation and Decommissioning
    Seismic Considerations
    Insurance
   46




---



##### Table of Contents



Material plans to construct, expand or improve facilities (MOPU Project)
  
    
    Increase gold production by an average 240,000 ounces per year over the life of the
operation.
    
    Lift output over the period from 2011 to 2021 by 2.35 million ounces to more than 10 million
ounces.
    
    Increase gold production by in excess of 1 million ounces over the life of the operation,
due to improved processing efficiencies.
    
    Provide potential for additional reserves to be established due to the improved project
economics, extending the life of the operation.
    
    Reduce costs of production by approximately $80 per ounce, following commissioning in 2011.
    
    Boost operating cash flows and deliver a significant uplift to net present value.
    
    Create operational flexibility to ensure more reliable and consistent production.
    
    Involve capital investment of $696 million, to lift process plant capacity to match the
current mining rate.
    2008
    
    2009
    
    2010
    
    2011
    
    TotalTotal Cost
    
    $
    M
    
    
    
    138
    
    
    
    268
    
    
    
    188
    
    
    
    102
    
    
    
    696
     47




---



##### Table of Contents




    
    By maximising direct feed ore to the autoclaves, the proportion of ore fed through the
flotation circuit is reduced, thereby increasing gold recoveries and consequently total gold
production.
    
    By accelerating processing rates, bringing forward production and maximising value. Higher
annual production levels will produce significant economies of scale, leading to a reduction
in unit costs of approximately US$80 per ounce.
   
 4A. Unresolved Staff Comments
  48




---



##### Table of Contents



Item 5. Operating and Financial Review and Prospects
 
 A. Operating Results
 Introduction
     Presentation of Financial Statements (IAS 1)
  Recent Developments
 MOPU Project
  Proposed Merger with Equigold NL
   
    
    obtaining approvals from applicable regulatory bodies such as the Foreign Investment Review
Board, the Australian Securities and Investments Commission, the ASX, POMSoX, PNGSC and the TSX as
appropriate;
    
    obtaining exchange control approval from the Bank of Papua New Guinea;
    
    if required under decree 96-634 of August 9, 1996 determining the terms of application of Law
95-553 of July 18, 1995 being the Mining Code of the Republic of the Ivory Coast, obtaining the
authorisation of the Administration des Minesto implement the Scheme;
    
    obtaining Equigold shareholder approval of the Scheme at the scheme meeting by the requisite
majorities under the Corporations Act;and
    
    obtaining Court approval of the Scheme in accordance with section 411(4)(b) of the
Corporations Act.
 49




---



##### Table of Contents



Issue of Additional Capital
  Reserves
    Critical Accounting Estimates and Judgments
  50




---



##### Table of Contents



Recoverability of long-lived assets
  Recoverability of non-current ore stockpiles
  Determination of ore reserves and remaining mine life
     Provision for restoration and rehabilitation obligations
  Recoverability of deferred tax assets
  Unit- of-Production method of depreciation
  51




---



##### Table of Contents



Deferred mining costs
   Changes in Accounting Policies and New Accounting Standards
     Application date forApplication date
    
    Impact on Consolidated Entity's
    
    the ConsolidatedReference
    
    Title
    
    Summary
    
    of standard
    
    financial report
    
    EntityIFRS 7
    
    Financial
Instruments:
Disclosures
    
    New standard
replacing the
disclosure
requirements
    
    January 1, 2007
    
    IFRS 7 is a disclosure standard so has
no direct impact on the measurement
and recognition criteria relating to
amounts included in the Consolidated
Entitys financial statements, but does
result in changes to the financial
instrument disclosures included in the
Consolidated Entitys annual report.
    
    January 1, 2007IFRS 8
    
    Operating
Segments
    
    New standard
    
    January 1, 2009
    
    IFRS 8 is a disclosure standard so has
no direct impact on the measurement
and recognition criteria relating to
amounts included in the Consolidated
Entitys financial statements, but does
result in changes to the segment
reporting disclosures included in the
Consolidated Entitys financial report.
(Refer to Note 6)
    
    January 1, 2007IAS 1
    
    Presentation of
Financial
Statements
    
    Added
disclosures about
an entitys capital
and changed the
presentation and
format of
financial
statements.
    
    January 1, 2007
    
    IAS 1 is a disclosure standard so has no
direct impact on the measurement and
recognition criteria relating to amounts
included in the Groups financial
statements, but may result in changes to
capital disclosures included in the
Groups annual report, and presentation
and format of financial statements.
    
    January 1, 2007
  52




---



##### Table of Contents



Application date forApplication date
    
    Preliminary assessment on the impact of the
    
    the ConsolidatedReference
    
    Title
    
    Summary
    
    of standard
    
    Consolidated Entitys financial report
    
    EntityIAS 23
    
    Borrowing
Costs
    
    Amended to
require all
borrowing costs
associated with
a qualifying
asset to be
capitalised.
    
    January 1, 2009
    
    This is consistent with the Consolidated
Entitys existing accounting policy for
capitalisation of interest and financing costs
and is not expected to have any additional
impact.
    
    January 1, 2009IFRIC 11
    
    IFRS 2 
Treasury Share
Transactions
    
    This
interpretation
deals with
accounting for
share based
payments issued
between two
entities in the
same group and
whether certain
share based
payments should
be accounted for
as equity-settled
or cash-settled
awards.
    
    March 1, 2007
    
    This is consistent with the Consolidated
Entitys existing accounting policy for share
based payments and is not expected to
have any additional impact.
    
    January 1, 2008IFRIC 12
    
    Service
Concession
Arrangements
    
    This
interpretation
deals with
accounting for
publicly owned
infrastructure
constructed,
operated, and
maintained by
the private
sector.
    
    January 1, 2008
    
    Not applicable
    
    Not applicableIFRIC 13
    
    Customer
Loyalty
Programmes
    
    This
interpretation
deals with sales
of goods with
customer award
credits should be
accounted as
multiple-element
transactions.
    
    July 1, 2008
    
    Not applicable
    
    Not applicableIFRIC 14
    
    IAS 19  The
    
    This
    
    January 1, 2008
    
    Not applicable
    
    Not applicableLimit on a
Defined Benefit
Asset, Minimum
Funding
Requirements
and
their Interaction
    
    interpretation
provides
Clarification of
IAS 19 regarding
future
contributions
and minimum
funding
requirements of
defined benefit
plans.
 53




---



##### Table of Contents



Financial Results of Operations
 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME  Year ended December 31, 2007, 2006 and 2005
 $mNote
    
    2007
    
    2006
    
    2005Revenue
    
    
    7
    
    
    
    498.4
    
    
    
    386.0
    
    
    
    264.0Cost of sales
    
    
    9
    
    
    
    (261.3
    )
    
    
    (211.0
    )
    
    
    (196.4
    )Gross profit from mining activities
    
    
    
    
    
    
    237.1
    
    
    
    175.0
    
    
    
    67.6Corporate expense
    
    
    
    
    
    
    (25.3
    )
    
    
    (12.1
    )
    
    
    (1.9
    )Project studies
    
    
    
    
    
    
    (7.5
    )
    
    
    (0.8
    )
    
    
    Exploration expense
    
    
    
    
    
    
    (8.4
    )
    
    
    (5.9
    )
    
    
    (6.0
    )Operating profit before other income / (expense)
    
    
    
    
    
    
    195.9
    
    
    
    156.2
    
    
    
    59.7Other income / (expense):Hedging loss
    
    
    10
    
    
    
    (97.2
    )
    
    
    (78.3
    )
    
    
    (44.1
    )Other expenses
    
    
    11
    
    
    
    (13.8
    )
    
    
    
    
    
    
    (2.5
    )Operating profit before finance costs
    
    
    
    
    
    
    84.9
    
    
    
    77.9
    
    
    
    13.1Financial income
    
    
    12
    
    
    
    10.9
    
    
    
    4.2
    
    
    
    6.2Financial expenses
    
    
    12
    
    
    
    (131.6
    )
    
    
    (6.2
    )
    
    
    (3.6
    )Profit / (loss) before tax
    
    
    
    
    
    
    (35.8
    )
    
    
    75.9
    
    
    
    15.7Income tax benefit / (expense)
    
    
    13
    
    
    
    11.7
    
    
    
    (22.1
    )
    
    
    (5.9
    )Net profit / (loss) after tax
    
    
    
    
    
    
    (24.1
    )
    
    
    53.8
    
    
    
    9.8Other comprehensive incomeExchange difference on translation of foreign
operations
    
    
    27
    
    
    
    42.6
    
    
    
    
    
    
    
    Cash flow hedges
    
    
    27
    
    
    
    38.7
    
    
    
    (50.8
    )
    
    
    (72.4
    )Share based payments
    
    
    27
    
    
    
    2.9
    
    
    
    5.5
    
    
    
    Net change in fair value of available for sale financial assets
    
    
    27
       
    
    
    1.2
    
    
    
    
    
    
    
    Income tax on other comprehensive income
    
    
    13
    
    
    
    (4.7
    )
    
    
    20.3
    
    
    
    8.9Other comprehensive income for the period net of
tax
    
    
    
    
    
    
    80.7
    
    
    
    (25.0
    )
    
    
    (63.5
    )Total comprehensive income
    
    
    
    
    
    
    56.6
    
    
    
    28.8
    
    
    
    (53.7
    )Earnings / (loss) per share
    
    
    37- Basic (cents/share)
    
    
    
    
    
    
    (1.4
    )
    
    
    4.2
    
    
    
    0.8- Diluted (cents/share)
    
    
    
    
    
    
    (1.4
    )
    
    
    4.2
    
    
    
    0.8
  54




---



##### Table of Contents



Overview of operating results for 2007 compared to 2006
      Revenue
      Cost of sales
    55




---



##### Table of Contents




    
    short term changes in the mine plan and scheduling within the period;
    
    changes in the reserves and strip ratio with a change in cut-off grade policy; and
    
    changes in pit wall design and operating strategies.
      Corporate expenses
  Project studies
  Exploration
  56




---



##### Table of Contents



Hedging loss
   Gross pre-tax
    
    
    
    
    
    Net post-taxNon-cash
    hedging
    
    
    
    
    Non-cash
    hedgingloss
    
    Tax effect
    
    
    lossDesignation Year
    
    $m
    
    $m
    
    $m2008
    
    
    76.7

    
    
    (23.0
    )
    
    
    53.72009
    
    
    102.3

    
    
    (30.7
    )
    
    
    71.62010
    
    
    81.9

    
    
    (24.6
    )
    
    
    57.32011
    
    
    44.2

    
    
    (13.2
    )
    
    
    31.02012
    
    
    5.8

    
    
    (1.7
    )
    
    
    4.12013
    
    
    6.0

    
    
    (1.8
    )
    
    
    4.2316.9

    
    
    (95.0
    )
    
    
    221.9
      Other expenses
  Financial income
  Financial expenses
   57




---



##### Table of Contents



Exchange differences on translation of foreign operations
  Net change in fair value of available for sale financial assets
  Tax Expense
        58




---



##### Table of Contents



Discussion and analysis of the balance sheet
         Discussion and analysis of the statement of cash flows
    
    
    Ballarat operation infrastructure and development expenditure of $58 million
    
    Lihir operation flotation plant of $62 million
    
    Lihir operation geothermal power plant of $17 million
  59




---



##### Table of Contents



Significant changes in the state of affairs
  1.
    
    On 8 March 2007 and under the Scheme of Arrangement for the merger with Ballarat Goldfields
Pty Ltd, the Company issued 112.0m shares with a value of $316.5m to the shareholder of
Ballarat Goldfields. The Ballarat Goldfields shareholders received five shares in the Company
for every 54 Ballarat Goldfields shares held. On 7 September 2007, the status of Ballarat
Goldfields was changed from a no liability company to a proprietary company.2.
    
    On 17 April, 2007, the Company announced a 1 for 3 accelerated pro-rata entitlement offer at an
issue price of A$2.30 per share and a placement of shares to institutional investors at A$2.80 per
share. As a result, 508.3m new shares were issued, resulting in cash proceeds of $989.0m. The
proceeds were applied to repayment of the Companys debt facilities ($85.6m) and gold loan
($333.4m) and close out of the gold hedge book ($368.5m). The surplus proceeds are being used to
fund the development of the Ballarat East Project and are available for other general corporate
purposes including facilitating the proposed expansion of production at Lihir Island
 60




---



##### Table of Contents



B. Liquidity and Capital Resources
 Liquidity
        Capital Expenditures
  Capital Expenditure 2005  2007
 (in US$ millions)
    
    2007
    
    2006
    
    2005Lihir
    
    
    156.5
    
    
    
    185.9
    
    
    
    99.5Ballarat
    
    
    65.9
    
    
    
    
    
    
    
    Corporate
    
    
    0.3
    
    
    
    1.8
    
    
    
    222.7
    
    
    
    187.7
    
    
    
    99.5
   61




---



##### Table of Contents



Financial instruments
  
 C. Research and Development, Patents and Licenses, etc
  62




---



##### Table of Contents



D. Trend Information
         
 E. Off-Balance Sheet arrangements
  63




---



##### Table of Contents



F. Tabular Disclosure of Contractual Obligations
  Later than 1 year
    
    Later than 2 yearsbut not later than 2
    
    but not later than 5Total
    
    Less than 1 year
    
    years
    
    years
    
    More than 5 years$ m
    
    $m
    
    $m
    
    $m
    
    $mCapital (Finance) Lease
Obligations
    
    
    1.0
    
    
    
    0.3
    
    
    
    0.4
    
    
    
    0.3
    
    
    
    Operating Lease
Obligations
    
    
    1.9
    
    
    
    0.7
    
    
    
    0.5
    
    
    
    0.7
    
    
    
    Capital expenditure
commitments(i)
    
    
    9.0
    
    
    
    9.0
    
    
    
    
    
    
    
    
    
    
    
    Purchase obligations (ii)
    
    
    25.2
    
    
    
    25.2
    
    
    
    
    
    
    
    
    
    
    
    Other Liabilities (iii)
    
    
    28.7
    
    
    
    13.5
    
    
    
    
    
    
    
    1.4
    
    
    
    13.8Total
    
    
    65.8
    
    
    
    48.7
    
    
    
    0.9
    
    
    
    2.4
    
    
    
    13.8
 
 (i)
    
    The major items of capital commitment included in Purchase Obligations are: Geothermal and
de-watering well drilling Lihir Island
($1.6 million), mess facility Lihir Island ($0.7 million), Kapit village relocation Lihir Island
($0.6 million), other items of expenditure Lihir Island ($4.4 million), completion of stage 2
processing plant and surface infrastructure project Ballarat operation ($1.7 million).(ii)
    
    Purchase obligations consist of trade creditors of $23.9 million and employee service related
liabilities payable of $1.3 million.(iii)
    
    Other liabilities represents $28.7 consisting of current and non-current provisions on the
consolidated balance sheet which represents certain employee, rehabilitation and other provisions. 
 G. Recently issued IFRS Standards
 .
 64




---



##### Table of Contents



Item 6. Directors, Senior Management and Employees
 
 A. Directors and Senior Management
 Directors
  Dr Ross Garnaut
   Mr Arthur Hood
  Dr Peter Cassidy
   Mrs Winifred Kamit
   Mr Geoff Loudon
   65




---



##### Table of Contents



Mr Bruce Brook
   Mr Alister Maitland
   Dr Mike Etheridge
   Management
  Name
    
    Position with the Company
    
    Year JoinedArthur Hood
    
    Managing Director
    
    
    2005Philip Baker
    
    Chief Financial Officer
    
    
    2007Nicholas Currey
    
    General Manager, Sustainable Development
    
    
    2008Joseph Dowling
    
    General Manager Corporate Affairs
    
    
    2005Murray Eagle
    
    General Manager External Affairs & Sustainable Development
    
    
    2005Noel Foley
    
    Executive General Manager
    
    
    2006Graham Folland
    
    General Manager Corporate Development
    
    
    2006Stuart MacKenzie
    
    Group Secretary and General Counsel
    
    
    2006Craig Thomas
    
    General Manager, Ballarat Goldfields Operations
    
    
    2007Ron Yung
    
    General Manager Organization Performance
    
    
    2006
 Arthur Hood:
 66




---



##### Table of Contents



Management and personnel during the period of this 2007 report:
 Philip Baker:
 Joseph Dowling:
 Murray Eagle:
 Noel Foley:
 Graham Folland:
 Richard Laufmann:
 Stuart MacKenzie:
 Wojciech Ozga:
 Ron Yung:
 Nick Currey:
 Craig Thomas :
  67




---



##### Table of Contents



B. Compensation
 Non-Executive Directors Remuneration
  a
    
    Principles used to determine the nature and amount of remunerationb
    
    Details of remunerationc
    
    Service agreementsd
    
    Share-based compensation
 a. Principles used to determine the nature and amount of remuneration
   
    
    competitive in structure and quantum with comparator organisations so as to attract, retain
and motivate appropriately
qualified and experienced executives
    
    acceptability to shareholders
    
    performance linkage / alignment of executive compensation
    
    transparency
    
    capital management.
   
    
    has company profit as a core component of plan design
    
    focuses on sustained growth in shareholder wealth, consisting of dividends and growth in share
price, and delivering
constant return on assets as well as focusing the executive on key non-financial drivers of
value
    
    attracts and retains high calibre executives.
  
    
    rewards capability and experience
    
    reflects competitive reward for contribution to growth in shareholder wealth
    
    provides a clear structure for earning rewards.
  Non-Executive Directors and Chairman
    68




---



##### Table of Contents



Executive Directors
  Directors fees
    2007
    
    
    2006$
    
    
    $Dr Ross Garnaut (2)
    
    
    255,000
    
    
    
    210,000Mr Bruce Brook (2)
    
    
    107,350
    
    
    
    70,000Dr Peter Cassidy (2)
    
    
    107,500
    
    
    
    70,000Dr Michael Etheridge (appointed 20 March 2007)
    
    
    71,735
    
    
    
    Mrs Winifred Kamit (1)
    
    
    109,850
    
    
    
    70,000Mr Geoff Loudon (1)
    
    
    100,000
    
    
    
    70,000Mr Alister Maitland (appointed 20 March 2007) (2)
    
    
    71,735
    
    
    
    Mr John OReilly (retired 31 December 2006) (2)
    
    
    
    
    
    
    70,000
  Audit
    
    
    Remuneration
    
    
    Safety and
    
    
    Sustainable
    
    
    TotalCommittee
    
    
    and Nomination
    
    
    Technical
    
    
    Development
    
    
    DirectorsBase fees
    
    
    fees
    
    
    Committee fees
    
    
    Committee fees
    
    
    Committee fees
    
    
    feesDr Ross Garnaut
    
    
    255,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    255,000Mr Bruce Brook
    
    
    85,000
    
    
    
    20,000
    
    
    
    
    
    
    
    2,350
    
    
    
    
    
    
    
    107,350Dr Peter Cassidy
    
    
    85,000
    
    
    
    
    
    
    
    7,500
    
    
    
    15,000
    
    
    
    
    
    
    
    107,500Dr Michael Etheridge
    
    
    66,585
    
    
    
    
    
    
    
    
    
    
    
    5,150
    
    
    
    
    
    
    
    71,735Mrs Winifred Kamit
    
    
    85,000
    
    
    
    2,350
    
    
    
    7,500
    
    
    
    
    
    
    
    15,000
    
    
    
    109,850Mr Geoff Loudon
    
    
    85,000
    
    
    
    
    
    
    
    
    
    
    
    7,500
    
    
    
    7,500
    
    
    
    100,000Mr Alister Maitland
    
    
    66,585
    
    
    
    5,150
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    71,735
 Audit Committee  Chairman
    
    Mr Bruce BrookRemuneration and Nomination Committee  Chairman
    
    Dr Ross GarnautSafety and Technical Committee  Chairman
    
    Dr Peter CassidySustainable Development Committee  Chairperson
    
    Mrs Winifred Kamit
 69




---



##### Table of Contents



(1)
    
    Fees are paid to Mrs Kamit and Mr Loudon in PNG Kina. Mr Loudons fees are donated to the Port
Moresby City Mission(2)
    
    Fees are paid to Dr Garnaut, Mr Brook, Dr Cassidy, Dr Etheridge and Mr Maitland in
Australian dollars equivalent to the amount reported. Fees were paid to Mr OReilly in 2006 in
Australian dollars(3)
    
    The services of Dr Garnaut are provided through Dr Garnauts family company, Maccullochella Pty
Limited
   Executive remuneration
   
    
    base package including
superannuation and benefits
    
    short-term performance incentives, and
    
    long-term incentives through participation in the Lihir Executive Share Plan (the LESP).
  Base package
     Benefits
  Short-term incentives
     70




---



##### Table of Contents



STI Target Level
    
    Managing Director
    
    Key management personnelAttainment of Target
    
    50% of Base package (before tax)
    
    35% of Base package (before tax)
 Long-term incentives
  Details of remuneration
 Amounts of remuneration
 Related Party Disclosures)
  
    
    Phil Baker -Chief Financial Officer (appointed January 21, 2007)
    
    Joe Dowling  General Manager Corporate Affairs
    
    Murray Eagle  General Manager External Affairs & Sustainable Development (retired January
16, 2008)
    
    Noel Foley  Executive General Manager, Operations
    
    Graham Folland  General Manager Corporate Development
    
    Stuart MacKenzie  Group Secretary and General Counsel
    
    Wojciech Ozga  General Manager, Ballarat Operation (appointed March 8, 2007, retired
January 31, 2008)
    
    Ron Yung  General Manager Organisation Performance
    
    Nick Currey  General Manager Sustainable Development (appointed January 1, 2008)
    
    Craig Thomas  General Manager, Ballarat Operation (appointed February 1, 2008)
    
    Richard Laufmann  Executive General Manager Australian Operations and Business
Development (appointed March 8, 2007, resigned June 8, 2007)
    
    Paul Fulton  Chief Financial Officer (resigned February 22, 2007)
  
    
    Murray Eagle  General Manager External Affairs & Sustainable Development (retired January
16, 2008)
    
    Noel Foley  Executive General Manager, Operations
 71




---



##### Table of Contents



Long-
    
    Share-term
    
    based2007
    
    Short-term employee benefits
    
    Post-employment benefits
    
    benefits
    
    paymentsNon
    
    
    
    
    
    
    
    
    
    LongCash salary
    
    Cash
    
    monetary
    
    
    
    
    
    
    
    
    
    serviceName
    
    and fees
    
    bonus
    
    benefits (7)
    
    Superannuation
    
    Other
    
    leave
    
    Share rights
    
    Total$
    
    $
    
    $
    
    $
    
    $
    
    $
    
    $
    
    $Non-executive directorsDr Ross Garnaut  Chairman
    
    
    255,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    255,000Mr Bruce Brook
    
    
    107,350
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    107,350Dr Peter Cassidy
    
    
    107,500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    107,500Dr Mike Etheridge(1)


    71,735
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    71,735Mrs Winifred Kamit
    
    
    109,850
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    109,850Mr Geoff Loudon
    
    
    100,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    100,000Mr Alister Maitland(2)

    71,735
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    71,735Mr John OReilly
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Sub-total
Non-executive directors
    
    
    823,170
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    823,170Executive directorsArthur Hood
    
    
    1,080,589
    
    
    
    387,299
    
    
    
    9,367
    
    
    
    66,748
    
    
    
    
    
    
    
    16,187
    
    
    
    1,154,882
    
    
    
    2,715,072Other key management personnelPhil Baker(3)
    
    
    278,610
    
    
    
    81,732
    
    
    
    27,879
    (8)
    
    
    26,862
    
    
    
    
    
    
    
    885
    
    
    
    103,496
    
    
    
    519,464Joe Dowling
    
    
    195,473
    
    
    
    46,242
    
    
    
    11,621
    
    
    
    20,829
    
    
    
    
    
    
    
    3,109
    
    
    
    88,734
    
    
    
    366,008Murray Eagle
    
    
    200,200
    
    
    
    97,615
    
    
    
    
    
    
    
    84,000
    
    
    
    
    
    
    
    
    
    
    
    36,459
    
    
    
    418,274Noel Foley
    
    
    245,000
    
    
    
    99,619
    
    
    
    4,154
    
    
    
    84,000
    
    
    
    
    
    
    
    
    
    
    
    182,372
    
    
    
    615,145Graham Folland
    
    
    231,530
    
    
    
    79,455
    
    
    
    33,888
    (9)
    
    
    27,849
    
    
    
    
    
    
    
    2,198
    
    
    
    110,395
    
    
    
    485,315Stuart MacKenzie
    
    
    223,358
    
    
    
    62,507
    
    
    
    11,126
    
    
    
    22,159
    
    
    
    
    
    
    
    1,417
    
    
    
    83,906
    
    
    
    404,473Wojciech Ozga(4)
    
    
    172,279
    
    
    
    
    
    
    
    
    
    
    
    14,565
    
    
    
    357,865
    (10)
    
    
    570
    
    
    
    68,266
    
    
    
    613,545Ron Yung
    
    
    240,825
    
    
    
    71,139
    
    
    
    9,783
    
    
    
    24,541
    
    
    
    
    
    
    
    1,601
    
    
    
    92,271
    
    
    
    440,160Paul Fulton(5)
    
    
    46,122
    
    
    
    
    
    
    
    
    
    
    
    4,151
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50,273Richard Laufmann(6)
    
    
    114,020
    
    
    
    
    
    
    
    
    
    
    
    48,408
    
    
    
    484,602
    (11)
    
    
    
    
    
    
    
    
    
    
    647,030Total
Key management personnel
compensation
    
    
    3,851,176
    
    
    
    925,608
    
    
    
    107,818
    
    
    
    424,112
    
    
    
    842,467
    
    
    
    25,967
    
    
    
    1,920,781
    
    
    
    8,097,929
 
  (1)
    
    Dr Mike Etheridge commenced as a non-executive director on March
20, 2007(2)
    
    Mr Alistair Maitland commenced as a non-executive director on
March 20, 2007(3)
    
    Mr Baker commenced employment with the Consolidated Entity on
January 21, 2007

(4) Mr Ozga commenced employment with the Consolidated
Entity on March 8, 2007(5)
    
    Mr Fulton ceased employment with the Consolidated Entity on February 23, 2007. Mr Fulton
received a termination payment $408,996 in accordance with his employment contract, which was
recognised in the previous financial year.(6)
    
    Mr Laufmann commenced employment with the Consolidated Entity on March 8, 2007 and
resigned on June 8, 2007.(7)
    
    Non-monetary benefits include car parking, salary continuance, death and total permanent
disablement and motor vehicle benefits.(8)
    
    Included in the total non-monetary benefits is a car benefit of $19,866(9)
    
    Included in the total non-monetary benefits is a car benefit of $25,007(10)
    
    Includes payment on termination of Ballarat Goldfields employment contract of $357,865(11)
    
    Includes termination payment of $484,602
 72




---



##### Table of Contents



Name
    
    Fixed remuneration
    
    At risk -STI
    
    At risk - LTI2007
    
    2007
    
    2007Executive directors of Lihir Gold LimitedArthur Hood
    
    
    22
    %
    
    
    14
    %
    
    
    64
    %Other key management personnel of Consolidated EntityPhil Baker
    
    
    30
    %
    
    
    11
    %
    
    
    59
    %Joe Dowling
    
    
    30
    %
    
    
    11
    %
    
    
    59
    %Murray Eagle
    
    
    30
    %
    
    
    11
    %
    
    
    59
    %Noel Foley
    
    
    30
    %
    
    
    11
    %
    
    
    59
    %Graham Folland
    
    
    30
    %
    
    
    11
    %
    
    
    59
    %Richard Laufmann
    
    
    58
    %
    
    
    21
    %
    
    
    21
    %Stuart MacKenzie
    
    
    30
    %
    
    
    11
    %
    
    
    59
    %Wojciech Ozga
    
    
    30
    %
    
    
    11
    %
    
    
    59
    %Ron Yung
    
    
    30
    %
    
    
    11
    %
    
    
    59
    %
 Service agreements
   Arthur Hood, Managing Director
     If employment terminated ...
    
    ... the relevant multiple is ...On or after the first anniversary of the commencement date but before the
third anniversary of the commencement date (i.e. in years 2 or 3 of
employment)
    
    The number of whole months in the period commencing on
the day after the date of termination of employment and
ending on the fifth anniversary of the commencement date,
divided by 24.On or after the third anniversary of the commencement date but before the
fifth anniversary of the commencement date (i.e. in years 4 or 5 of
employment)
    
    1 or, if the date of termination of your employment is after the
fourth anniversary of the commencement date, the relevant
multiple is a fraction, the numerator of which is the number of
whole months in the period commencing the day after the
date of termination of employment and the denominator of
which is 12.
 73




---



##### Table of Contents



Phil Baker, Chief Financial Officer
   st
 Paul Fulton, Chief Financial Officer (from January  ,1 2007  January 20, 2007)
    Joe Dowling, General Manager Corporate Relations
    Murray Eagle, General Manager External Affairs & Sustainable Development
    Noel Foley, Executive General Manager
   st
 Graham Folland, General Manager Corporate Development
   st
 Stuart MacKenzie, Group Secretary and General Counsel
   st
 Ron Yung, General Manager Organisation Performance
   st
 74




---



##### Table of Contents



Wojciech Olga, General Manager, Ballarat Operation
   st
 Craig Thomas, General Manager, Ballarat Operation
   st
 Richard Laufmann, General Manager, Ballarat Operation
    Share-based compensation
 Share Rights
   2007 Grant
  2007 Transitional Grant
   75




---



##### Table of Contents



1 2
    Name
    
    Number of share rights granted during the year
    
    
    Number of share rights vested during the year2007
    
    
    2006
    
    
    2007
    
    
    2006Directors of Lihir Gold LimitedArthur Hood
    
    
    1,535,255
    (1)
    
    
    362,263
    
    
    
    49,208
    
    
    
    176,071Other key management personnel of the Consolidated EntityPhil Baker
    
    
    251,786
    
    
    
    
    
    
    
    
    
    
    
    Joe Dowling
    
    
    163,751
    
    
    
    35,945
    
    
    
    37,220
    
    
    
    Murray Eagle
    
    
    217,524
    
    
    
    54,225
    
    
    
    56,148
    
    
    
    Noel Foley
    
    
    246,481
    
    
    
    47,926
    
    
    
    50,148
    
    
    
    Graham Folland
    
    
    207,890
    
    
    
    41,080
    
    
    
    42,984
    
    
    
    Paul Fulton
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Mark Laurie
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stuart MacKenzie
    
    
    181,056
    
    
    
    13,734
    
    
    
    14,969
    
    
    
    Wojciech Ozga
    
    
    165,235
    
    
    
    
    
    
    
    
    
    
    
    Ron Yung
    
    
    198,184
    
    
    
    18,885
    
    
    
    19,307
    
    
    
    
 
 (1)
    
    Subject to approval by shareholders.   (a)
    
    exercise price: $ nil (2006  $ nil)(b)
    
    expected volatility: 42% (2006 -
43%)(c)
    
    risk-free interest rate: 6.12%
(2006  6.05%).(d)
    
    expected life of right
(years): 10 years(e)
    
    weighted average share price at grant date: $3.08
(2006  $2.07)(f)
    
    expected dividend yield: 0% (2006  0%)
   Shares provided on exercise of share rights
 76




---



##### Table of Contents



Name
    
    Date of exercise of share rights
    
    
    Number share rights exercised during the year2007
    
    
    2006Directors of Lihir Gold LimitedArthur Hood
    
    Sep 2007
    
    
    49,208
    
    
    
    176,071Other key management personnel of the Consolidated EntityPhil Baker
    
    
    
    
    
    
    
    
    
    
    Joe Dowling
    
    Sep 2007
    
    
    37,220
    
    
    
    Murray Eagle
    
    Sep 2007
    
    
    4,634
    
    
    
    Noel Foley
    
    Sep 2007
    
    
    50,148
    
    
    
    Graham Folland
    
    Sep 2007
    
    
    42,984
    
    
    
    Stuart MacKenzie
    
    Sep 2007
    
    
    14,969
    
    
    
    Wojeich Ozga
    
    
    
    
    
    
    
    
    
    
    Ron Yung
    
    Sep 2007
    
    
    19,307
    
    
    

    
 77




---



##### Table of Contents



C. Board Practices
 Board of Directors
   
    
    setting the Companys values and standards of conduct;
    
    safeguarding the reputation of the Company;
    
    providing leadership of the Company within a framework of prudent and effective controls
which enable risks to be assessed and managed;
    
    setting the Companys direction, strategies and financial objectives;
    
    ensuring that the performance of management, and the Board itself, is regularly assessed and
monitored;
    
    ensuring monitoring of compliance with regulatory and ethical standards; and
    
    appointing, terminating and reviewing the performance of the Managing Director.
   
    
    final approval of corporate strategy and performance objectives, and reserves and financial
plans;
    
    capital management, including capital raisings, and the approval and monitoring of significant
capital expenditure;
    
    monitoring of financial performance, review and approval of significant financial and other
reporting;
    
    assessing the appropriateness and adequacy of, and monitoring compliance with, corporate
governance policies and ethical standards;
    
    evaluating the performance of the senior management team;
    
    determining the Companys risk management policies and reviewing and ratifying its risk
management and internal control framework, including insurance, corporate security and
prudential limits;
    
    determining the Companys treasury policies, including gold price hedging, foreign currency and
interest rate exposure; and
    
    the engagement of auditors to review and report to the Board on the Companys financial
results and reporting systems, internal controls and compliance with statutory and regulatory
requirements.
    78




---



##### Table of Contents



Composition of the Board
  
    
    the Board may, in accordance with the Companys constitution, be comprised of a minimum of
five Directors and maximum of twelve; and
    
    the roles of the Chairman of the Board and of Managing Director should be exercised by different
individuals.
       Year AppointedName
    
    Position
    
    As Director
    
    Term EndsRoss Garnaut
    
    Chairman of Board, Independent Director
    
    1995Member of Audit CommitteeMember of Sustainable Development CommitteeChairman of Remuneration and Nomination CommitteeGeoffrey Loudon
    
    Independent Director
    
    1995Member of Safety and Technical CommitteeMember of Sustainable Development CommitteePeter Cassidy
    
    Independent Director
    
    2003Chairman of Safety and Technical CommitteeMember of Remuneration and Nomination CommitteeWinifred Kamit
    
    Independent Director
    
    2004Chair of Sustainable Development CommitteeMemberof Remuneration and Nomination CommitteeArthur Hood
    
    Managing Director
    
    2005
    
    October 1, 2010Bruce Brook
    
    Independent Director
    
    2005Chairman of Audit CommitteeMichael Etheridge
    
    Independent Director
    
    2007Member of Safety and Technical CommitteeAlister Maitland
    
    Independent Director
    
    2007Member of the Audit Committee
 79




---



##### Table of Contents



Board committees
  
    
    Audit;
    
    Remuneration and Nomination;
    
    Sustainable Development Committee (formally Environmental and Lihir Impact Committee); and
    
    Safety and Technical.
  Audit committee
  
    
    
    determining the appropriateness of accounting principles and disclosure practices adopted by
management and monitoring compliance with applicable accounting standards and other
requirements;
    
    overseeing the preparation and audit of, and verifying and ensuring the integrity of, the
Companys Financial Statements and reports;
    
    the appointment, compensation, retention and oversight of the Companys external auditor or
any other public accounting firm engaged for the purpose of performing audit, review or
attestation services for the Company;
    
    reviewing and evaluating the independence, qualifications and performance of the external
auditor and managing the relationship between the Company and its external auditor;
    
    monitoring the adequacy of the Companys internal financial controls;
    
    risk management, and compliance systems and processes;
    
    overseeing the retention, tasking and resourcing of the Companys internal auditors,
monitoring their progress and evaluating their performance; and
    
    reviewing the financial management of the Company generally and undertaking such other tasks
as the Board or the Managing Director may request from time to time.
  
 80




---



##### Table of Contents



Auditor Independence and Engagement
  
    
    requires that no person may play a significant role in managing the audit for more than five
out of any seven successive years;
    
    must approve all non-audit work which may be undertaken by the external auditor and exclude
them from undertaking such work where it may give rise to a conflict of interest;
    
    receives periodic statements, at least annually, from the auditors outlining all work
undertaken for the Company, and confirming that the auditor has satisfied all professional
regulations relating to auditor independence;
    
    meets with the external auditor independently of management;
    
    reviews the performance of external auditors at least annually and is responsible for
recommending to the Board their appointment, reappointment or termination;
    
    reviews the scope of the annual audit plan and approves the scope of the audit services to be
provided;
    
    reviews any engagement fees or terms proposed by the external auditors;
    
    reviews and discusses with external auditors or management any significant matters, problems,
difficulties or any other major issues regarding financial reporting issues;
    
    considers whether the external auditors provision of non-audit services to the Company and
any other relationship between the external auditor and the Company (if any) is compatible
with maintaining the independence and objectivity of the external auditor and maintaining the
quality of the audit services provided; and
    
    if applicable, takes appropriate action in response to the external auditors report to
satisfy itself of the external auditors
independence for the purposes of making a recommendation to the Board.
   Risk Oversight and Management
    81




---



##### Table of Contents



Management Assurances
    Remuneration and Nomination Committee
  
  
    
    reviewing remuneration of Non-Executive Directors, the Managing Director and other senior
executives; establishing criteria for membership of the Board and its committees,
    
    and processes for the identification of suitable candidates; reviewing membership of the Board
and its committees;
    
    nominating members of the Board and its committees;
    
    formulating policies relating to the retirement of Non-Executive Directors;
    
    reviewing management succession planning, human resources and remuneration policies for the
Company generally; and
    
    ensuring the Companys obligations in relation to employee benefits and entitlements, including
superannuation, are met.
    Sustainable Development Committee
  
  
    
    the interaction between the Companys activities and the local community, and the ways in
which these activities contribute
to social and economic development;
 82




---



##### Table of Contents




    
    dealings with the local community in relation to land;
    
    maintaining and improving community health; and
    
    the impact and associated risks of the Companys activities on the environment, together with
monitoring compliance with the applicable regulatory regime including relevant local and
international emission standards and controls.
  Safety and Technical Committee
  
   
    
    occupational health and safety standards, policies and issues;
    
    technical issues associated with the Companys exploration, mining and processing activities,
with reference to the standards set by the Company and the standards and norms of the industry
more generally; and
    
    the status of major capital projects approved by the Board.
 
 83




---



##### Table of Contents



D. Employees
  2007
    
    2006
    
    2005Lihir OperationManagement
    
    
    10
    
    
    
    12
    
    
    
    14Commercial, human resources, towns and site
services, community and environment
    
    
    455
    
    
    
    450
    
    
    
    340Mining operations and mine technical
    
    
    570
    
    
    
    642
    
    
    
    414Plant operations and maintenance
    
    
    879
    
    
    
    455
    
    
    
    359Lihir Services Australia  BrisbaneLSA
    
    
    53
    
    
    
    28Ballarat OperationManagement
    
    
    9Commercial, human resources, towns and site
services, community and environment
    
    
    10Mining operations and mine technical
    
    
    83Plant operations and maintenance
    
    
    Total Company employees
    
    
    2,069
    
    
    
    1,587
    
    
    
    1,127Total contractors (full-time equivalent)
    
    
    1,893
    
    
    
    2,250
    
    
    
    1,506Total
    
    
    3,962
    
    
    
    3,837
    
    
    
    2,633
     84




---



##### Table of Contents



E. Share Ownership
  Interest held by directors in shares of the CompanyRoss Garnaut
    
    
    101,523
    (1)(Director)Arthur Hood
    
    
    353,704(Managing Director)Bruce Brook
    
    
    33,334
    (2)(Director)Peter Cassidy
    
    
    44,301
    (3)(Director)Michael Etheridge
    
    
    61,728
    (4)(Director)Geoffrey Loudon
    
    
    143,840(Director)Winifred Kamit
    
    
    2,667
    (5)(Director)Alister Maitland
    
    
    30,864
    (6)(Director)
 
 Notes:(1)
    
    Held by Maccullochella Pty Limited of which Dr Garnaut is a director and shareholder(2)
    
    13,334 of which are held by Eagles Rest 156 Pty Limited as trustee of the Brook Family
Superannuation Fund and 20,000 of
which are held by Ms G D Brook.(3)
    
    26,667 of which are held by Cassidy Waters Pty Limited as trustee for the Cassidy
Superannuation Fund(4)
    
    Held by Tectonex Geoconsultants Pty Ltd as trustee for the Etheridge Superannuation Fund(5)
    
    Held by Kamchild Limited of which Mrs Kamit is a director and shareholder(6)
    
    Held by the Alister Maitland Superannuation Fund.    85




---



##### Table of Contents



Item 7. Major Shareholders and Related Party Transactions
 
 A. Major Shareholders
  Name of Substantial Shareholder
    
    Relevant interest
    
    PercentageFidelity Management & Research
LLC and Fidelity International Limited
    
    
    272,288,439
    
    
    
    14.30Nuveen Investments Inc.
    
    
    214,819,596
    
    
    
    11.87Merrill Lynch & Co, Inc
    
    
    146,902,847
    
    
    
    11.44Ausbil Dexia Limited
    
    
    95,742,786
    
    
    
    5.02
 Class B shares  Niugini Mining Limited
     PNG Government Participation and Mineral Resources Lihir Limited Shareholding
   86




---



##### Table of Contents



American Depositary Shares
   United States Resident Shareholders
  Share Options
  Control
   87




---



##### Table of Contents



B. Related Party Transactions
  
    
    Dr Garnaut was re-appointed as chairman for a three-year period commencing on May 1, 2004,
subject to his continuing to hold office as a director and to certain other termination rights
set out in the agreement;
    
    No fees or benefits are payable to Dr Garnaut by reason of his retirement or other termination
of office; and
    
    The Company has agreed to indemnify Dr Garnaut against any liability incurred in defending any
proceedings arising from the performance of his duties and responsibilities in which judgment is
given in his favour, he is acquitted, or relief is granted to him under the Companies Act. The
indemnity does not apply to the extent it would be inconsistent with the Companys constitution
or to the extent the liability is otherwise insured.
   
 C. Interests of Experts and Counsel
  88




---



##### Table of Contents



Item 8. Financial Information
 
 A. Consolidated Statements and Other Financial Information
  Export sales
  2007
    
    2006
    
    2005Export sales
    
    $
    M
    
    
    
    492.3
    
    
    
    324.8
    
    
    
    238.8Export volume
    
    oz's
    
    
    707,339
    
    
    
    642,531
    
    
    
    592,225Export volume as % of total sales volume
    
    
    %
    
    
    
    99.8
    %
    
    
    100.0
    %
    
    
    100.0
    %
 Legal or arbitration proceedings
  Dividend distributions
  
 B. Significant Changes
  89




---



##### Table of Contents



Item 9. The Offer and Listing
      Year
    
    Ordinary Shares
    
    American Depositary SharesHigh
    
    Low
    
    High
    
    LowA$
    
    A$
    
    $
    
    $2003
    
    
    1.83
    
    
    
    1.25
    
    
    
    24.17
    
    
    
    13.992004
    
    
    1.59
    
    
    
    0.90
    
    
    
    24.20
    
    
    
    12.582005
    
    
    2.35
    
    
    
    0.99
    
    
    
    37.01
    
    
    
    15.302006
    
    
    3.64
    
    
    
    1.98
    
    
    
    28.37
    *
    
    
    11.46
    *2007
    
    
    4.42
    
    
    
    2.74
    
    
    
    40.95
    
    
    
    21.70
 Ordinary Shares
    
    American Depositary SharesQuarter Ending
    
    High
    
    Low
    
    High
    
    LowA$
    
    A$
    
    $
    
    $2006
    
    March 31
    
    2.67
    
    1.99
    
    37.99
    
    29.11June 30
    
    3.60
    
    2.57
    
    56.74
    
    35.02September 30
    
    3.17
    
    2.66
    
    49.50
    
    39.45December 31
    
    3.24
    
    2.73
    
    25.19*
    
    20.11*2007
    
    March 31
    
    3.57
    
    2.79
    
    28.60*
    
    21.70*June 30
    
    3.25
    
    2.91
    
    27.63
    
    24.50September 30
    
    3.94
    
    2.74
    
    36.03
    
    22.29December 31
    
    4.42
    
    3.16
    
    40.95
    
    27.202008
    
    January 31
    
    3.99
    
    3.00
    
    36.27
    
    29.96February 29
    
    4.35
    
    3.38
    
    38.82
    
    30.02March 31
    
    4.37
    
    3.59
    
    39.95
    
    31.57
  Ordinary Shares
    
    American Depositary SharesHigh
    
    Low
    
    High
    
    LowA$
    
    A$
    
    $
    
    $October 2007
    
    
    4.42
    
    
    
    3.89
    
    
    
    40.95
    
    
    
    35.10November 2007
    
    
    4.38
    
    
    
    3.72
    
    
    
    40.07
    
    
    
    33.07December 2007
    
    
    3.90
    
    
    
    3.16
    
    
    
    34.79
    
    
    
    27.20January 2008
    
    
    3.99
    
    
    
    3.00
    
    
    
    36.27
    
    
    
    29.96February 2008
    
    
    4.35
    
    
    
    3.38
    
    
    
    38.82
    
    
    
    30.02March 2008
    
    
    4.37
    
    
    
    3.59
    
    
    
    39.95
    
    
    
    31.57
 90




---



##### Table of Contents



Item 10. Additional Information
 
 A. Share Capital
  
 B. Memorandum and Articles of Association
  PNG Companies and Securities Laws
    
    
    the acquisition of, or an agreement to acquire, whether contingent or not, assets the value of
which is more than half the value of assets of the company before the acquisition;
    
    the disposal of, or an agreement to dispose of, whether contingent or not, assets of the
company the value of which is more than half the value of the assets of the company before the
disposal; or
    
    a transaction which has or is likely to have the effect of the company acquiring rights or
interests, or incurring obligations or liabilities, the value of which is more than half the value
of the assets of the company before the transaction.
     91




---



##### Table of Contents




    
    the power to control the exercise of any right to vote
attached to a voting share;
    
    the power to acquire or dispose of the voting share; or
    
    having the above powers by virtue of any trust, arrangement, agreement or understanding.
  Constitution
  (i)
    
    reflected changes made under the new Companies Act (for example, the abolition of par value of
shares, the increased power for directors to make distributions of money or property to members and
the removal of the requirement that a company have specific objects and powers); or(ii)
    
    took advantage of specific provisions of the new Act which allow the Company to take a course
of action (for example, to buy back the companys shares, to indemnify directors or to pay for D&O
liability insurance) if expressly permitted to do so by its constitution.
  
    
    The Company is incorporated and registered in PNG (Number C1-23423) and is a registered
foreign company in Australia (ARBN 069 803 998). Under section 17 of the Companies Act, a
company has full capacity to carry on or undertake any business or activity, do any act or
enter into any transaction, and in respect of these purposes, it has full rights, powers and
privileges. Therefore it is not necessary to list the objects and purposes of the Company in
its constitution.
    
    In accordance with clause 17, a director may vote on a proposal, arrangement or contract in
which he is materially interested provided that he has complied with the Companies Act, the
Official Listing Rules of the ASX and provided the board does not otherwise determine.
    
    The constitution contains provisions for the remuneration of directors (including
reimbursement of expenses), the indemnification of directors in respect of certain liability
or for costs incurred in defending or settling any claim or proceedings relating to such
liability, and for effecting insurance for directors to the extent permitted under the Act.
These are general powers of the Company which may in the normal course be exercised by a
resolution of the Board. An interested director who has declared his or her interest would be
entitled to vote on any such resolution unless the board has determined that the director
should not exercise any power in relation to the matter. The interested director is not
entitled to vote on a resolution to make that preliminary determination.
    
    There are no specific provisions relating to borrowing powers in the constitution. Clause 20.1
provides that the Board has all necessary power for managing, and for directing and
supervising the management of, the business and affairs of the Company to the exclusion of the
Shareholders and in accordance with clause 21.9 every resolution of the board is decided by a
majority of votes. Therefore, the borrowing by the Company is determined by a majority
decision of the Board.
    
    An exercise of the borrowing power may in certain circumstances be subject to the provisions
of the Companies Act (section 110) requiring shareholder approval for major transactions.
    
    There are no provisions for retirement or non-retirement of directors under an age limit in
the constitution.
    
    Clause 15.5 provides that a director of the Company need not be a shareholder.
    
    Clause 10A.2(b) provides that Class B shares have no entitlement to dividends.
    
    Clause 24.1 provides that the Board may declare distributions to the shareholders (other than
Class B shareholders) including declaring the property to constitute the distribution and the
time of the distribution. Shareholder approval is not required for a distribution. Clause
24.3 provides that where the Board has declared a dividend the obligation of the Company to
make the distribution only arises when the Board fixes the time for distribution and that time
has arrived.
 92




---



##### Table of Contents



Clause 24.8 provides that each dividend in respect of each share must be distributed according
to the amount paid up on that share save to the extent that the terms of issue of a share
provide otherwise. The Company does not have any partly paid shares on issue.
    
    Clause 24.18 provides that all dividends declared but unclaimed may (in the case of dividends
not to be distributed as money) be realized into money and (in any case) be invested for the
benefit of the Company until claimed or until required to be dealt with under any applicable
law dealing with unclaimed money.
    
    Clause 5.6 provides that if a call in relation to a share is due and payable and not paid, the
shareholder has no right to receive any dividends and has no right to vote.
    
    Clause 10A.2(a) provides that the Class B shareholders do not have any voting rights.
    
    Clause 13.2 provides that each shareholder who is entitle to vote on a resolution (where not
disqualified from voting pursuant to the Listing Rules or the Act) has one vote on voting by
voice or show of hands, and on a poll he has the number of votes equal to the number of fully
paid shares held by that person.
    
    Under clause 15.3, one third of the directors (excluding the managing director) retire by
rotation each year and are eligible for re-election.
    
    Clause 27.3 provides that after distribution of assets to repay paid up capital any surplus
assets will be distributed to the shareholders in proportion to the amount paid up by the
shareholder on each share, save to the extent that the terms of issue of a share provide
otherwise.
    
    Clause 10A.2(d) provides that the Class B shares are redeemable at the option of the Company
for consideration of K100 per million (or part thereof) of those shares.
    
    Clause 2.6(b) provides that the Company is authorized to redeem any redeemable shares subject
to the provisions of the Listing Rules and the securities clearing house business rules of
Australia.
    
    There are no provisions in the constitution in relation to sinking funds.
    
    Clause 5 provides that the Board may make calls on a shareholder in respect of any or all of
the amount unpaid on the share unless the terms of issue make that payment payable at a fixed
time. The constitution does not expose the shareholders to any liability to further capital
calls by the Company.
    
    There are no provisions discriminating against any existing or prospective holder of such
securities as a result of such shareholder owning a substantial number of shares in the
constitution.
    
    Under the Companies Act, any provision of the constitution can be altered by special
resolution of the shareholders requiring a 75% majority vote of those attending and voting.
    
    Clause 8.2 provides that where the Company by ordinary shareholders resolution consolidates,
divides or sub-divides its shares, the Company may also by special resolution determine that,
as between the shares resulting from the consolidation, division or sub-division, one or more
of those shares has some preference or special advantage as regards dividends, capital, voting
or otherwise over or compared with the other shares.
    
    Clause 8.3 provides that if the shares are divided into different classes of shares, the
rights attached to any class of shares may only be varied or abrogated with either the written
consent of 75% of the shareholders of that class, or, sanction of a special resolution passed
at a separate meeting of that class of shareholders.
    
    Clause 8.4 provides that the board may do anything to give effect to any resolution
authorizing or effecting the alteration of the share capital of the Company, the variation or
abrogation of rights attaching to any class of shares, or to adjust the rights of all parties.
    
    Clause 11.3 provides that the board may convene a special meeting of the Company at any time.
Alternatively, clause 11.4 provides that the shareholders may requisition the holding of a
special meeting as provided by section 102(b) of the Companies Act, which requires a written
request of shareholders holding shares carrying not less than 5% of the voting rights.
 93




---



##### Table of Contents




    
    Clause 11.2 provides that the Company must hold an annual general meeting in accordance with
the Companies Act, which must be held not later than 15 months after the previous annual
general meeting.
    
    Fourteen days written notice of the meeting must be sent to the shareholders, directors and
auditor of the Company, stating the nature of the business, the text of any special resolution
and, if required by the Official Listing Rules of the ASX, include a form of proxy.
    
    All shareholders (including Class B shareholders) may attend a meeting of shareholders either
in person, by proxy, by attorney or (in the case of a shareholder which is a body corporate)
by a representative.
    
    Clause 12.2 provides that no business may be transacted by a meeting of shareholders unless a
quorum of three is present. Clause 12.3 provides that, where a quorum is not present within
30 minutes after the time appointed for the
meeting, (in the case of a meeting requisitioned by shareholders), the meeting is dissolved,
or in the case of any other meeting, it is adjourned to the same time and the same place the
following week, and if there is not a quorum within 30 minutes of the appointed time of that
meeting, it is dissolved.In 1995, the Company was granted an exemption with respect to the quorum requirement under
NASDAQ Rule 4350(f), which requires each issuer to provide for a quorum as specified in its
by-laws for any meeting of the holders of common stock, which shall in no case be less than 33
1/3% of the outstanding shares of the Companys common voting stock. The Company complied with
the quorum requirements set forth in the previous paragraph.
    
    There are no limitations on rights to own securities, including the rights of non-resident or
foreign shareholders to hold or exercise voting rights on the securities imposed by foreign
law, or by the charter or other constituent document of the Company in the constitution.
    
    There are no provisions in the constitution that would have an effect of delaying, deferring
or preventing a change in control of the Company, and that would operate only with respect to
a merger, acquisition or corporate restructuring involving the Company (or any of its
subsidiaries).
    
    There are no provisions in the constitution governing the ownership threshold above which
shareholder ownership must be disclosed.
    
    The Company is incorporated, and has its principal activities, in PNG. As such it is subject
to the Companies Act, the Securities Act of PNG and the Takeovers Code under the Securities
Act of PNG. The general effect of this legislation is referred to elsewhere in this Annual
Report.
    
    In relation to an increase in capital by the issue of new shares, clause 2.1 provides that
this power is conferred on the board of directors subject to the listing rules of any
applicable stock exchange (namely the Australian Securities Exchange, Port Moresby Stock
Exchange and the Nasdaq Stock Exchange). The conditions in this regard are no more stringent
than is required by law. There are no pre-emptive rights of existing shareholders.
 94




---



##### Table of Contents



C. Material Contracts
 Operations Agreements
 Pressure Oxidation Technology License.
  Termination of Rio Tinto management arrangements in 2005
  
    
    previous arrangements under which management services were provided by the Rio Tinto group to
the Company were terminated;
    
    the Company acquired all of the shares of LMC (which had been a wholly owned subsidiary of the
Rio Tinto group used in connection with the provision of management services) with consideration
consisting of a nominal sum, together with transfer of the cash holdings, accrued accounts
receivable and net income tax credits receivable at that date;
    
    the Rio Tinto Group agreed to provide, at the Companys option, certain defined technical and
procurement services to the Company on certain commercial terms for a term of up to two years; and
    
    the Company granted certain releases and indemnities to the Rio Tinto Group in connection with the
termination of the management agreements.
  Lihir management
  PNG Mining Laws
 Mining (Safety) Act
 Mineral Resources Authority Act 2005 Mining Act 1992, the Mining (Safety) Act (Chapter 195A),
 Mineral Resources Authority Act 2005
 95




---



##### Table of Contents



96




---



##### Table of Contents



Related Agreements with PNG Government
 Exploration License.
   Special Mining Lease.
   Mining Development Contract.
      97




---



##### Table of Contents




    
    to construct the mine and operate in accordance with the approved proposal for development
(including the environmental
plan);
    
    not to incur debt in violation of certain coverage tests;
    
    to convert its foreign currency revenues into Kina, subject to certain exceptions;
    
    not to keep gold in inventory for a period greater than three months without placing in its
Kina bank account an amount equivalent to the cash value of such gold;
    
    to comply with PNG Government notices forbidding certain sales of gold;
    
    to comply with its various obligations to hire PNG employees or suppliers or contractors;
    
    not to suspend its operations other than as permitted by the Mining Development Contract; and
    
    to comply in all material respects with the environment plan (see Item 4. Information on the
Company  D. Property, Plant and Equipment  Environmental Considerations  Environmental Plan).
   98




---



##### Table of Contents



Local Community Agreements
   Lihirian Equity Settlement Agreement
  
    
    MRDC and LMC agreed to each contribute K3,532,759 and $2,635,000 to MRL; and
    
    MRL agreed to sell down a proportion of its shareholding in the Company in two separate
tranches and to invest the portion of the proceeds remaining, after meeting current
commitments to the EIB, to enable it to meet future financing commitments to the EIB.
  Ballarat Goldfields Merger
 Merger Implementation Agreement. Corporations Act Corporations Act
 Share Subscription Agreement.
 Deed Poll.
 Completion.
 99




---



##### Table of Contents



Proposed Equigold NL Merger
 Merger Implementation Agreement.
 
    
    obtaining approvals from applicable regulatory bodies such as the Foreign Investment
Review Board, the Australian Securities and Investments Commission, the ASX, POMSoX,
NASDAQ, SEC, PNGSC and the TSX as appropriate;
    
    obtaining exchange control approval from the Bank of Papua New Guinea;
    
    if required under decree 96-634 of August 9, 1996 determining the terms of application
of Law 95-553 of July 18, 1995 being the Mining Code of the Republic of the Ivory Coast,
obtaining the authorisation of the Administration des Minesto implement the Scheme;
    
    obtaining Equigold shareholder approval of the Scheme at the scheme meeting by the
requisite majorities under the Corporations Act;and
    
    obtaining Court approval of the Scheme in accordance with section 411(4)(b) of the
Corporations Act.
  
    
    A Deed Poll in favour of each person registered as a holder of fully paid ordinary
            shares in Equigold as at the record date. Pursuant to the Deed Poll, in consideration for
the transfer to LAH of each Equigold share held by the shareholders of Equigold, the
Company agrees, subject to the Scheme becoming effective, to provide to each shareholder of
Equigold 33 shares in the Company to be allotted and issued for each parcel of 25 Equigold
            shares; and
    
    A Scheme of Arrangement whereby Equigold agrees to the transfer of its shares to the
Companys wholly owned subsidiary so that each shareholder of Equigold receives 33 shares
in the Company for each parcel of 25 Equigold shares.
 Integrated Benefits Package
    Lihir Operation Blasting Services Contracts
      100




---



##### Table of Contents



Ballarat Goldfields Process Plant Construction Contracts
 Spinifex Projects Pty Ltd  Contract P-3 Processing Plant Construction
  Gekko Systems Pty Ltd  Stage 2 Leaching Plant Construction
  Ballarat Goldfields Mining Contract  Pybar Mining Services Pty Ltd
   Lihir Operation Geothermal Coring Contract  Washingtons Drilling (International) Limited
  101




---



##### Table of Contents



Financing Agreements
  
    
    a Gold Facility of up to 480,000 ounces of gold; and
    
    a revolving credit facility of $50 million (RCF).
  
    
    To repay the original Syndicated Facility agreement;
    
    To assist in funding the expansion of the Companys gold production by approximately
140,000 ounces per year on average through the addition of a 3 million ton per annum
flotation processing facility; and
    
    To finance a restructuring of the Companys hedge book.
  Security Trust Deed in connection with the Syndicated Facilities Agreement
    Ballarat Goldfields Facility Agreement
       102




---



##### Table of Contents



Security Agreements  ANZ Facility Agreement
     103




---



##### Table of Contents



D. Exchange Controls
       104




---



##### Table of Contents



E. Taxation
  
    
    a dealer in securities;
    
    a trader in securities that elects to use a mark-to-market method of accounting for securities holdings;
    
    a tax-exempt organization;
    
    a life insurance company;
    
    a person liable for alternative minimum tax;
    
    a person that actually or constructively owns 10% or more of our voting stock;
    
    a person that holds shares or ADSs as part of a straddle or a hedging or conversion transaction; or
    
    a person whose functional currency is not the U.S. dollar.
    
    
    a citizen or resident of the United States;
    
    a domestic corporation;
    
    an estate whose income is subject to United States federal income tax regardless of its source; or
    
    a trust if a United States court can exercise primary supervision over the trusts administration
and one or more United States persons are authorized to control all substantial decisions of the
trust.
 You should consult your own tax advisor regarding the United States federal, state and local, and
other tax consequences of owning and disposing of shares and ADSs in your particular circumstances.
  Taxation of Dividends
    105




---



##### Table of Contents



Taxation of Capital Gains
  PFIC Rules
  PNG Taxation
  
    
    is domiciled in PNG, unless the persons permanent place of abode is outside PNG; or
    
    has been in PNG for more than one half of the year of income, unless that person has a
usual place of abode outside PNG and does not intend to take up residence in PNG.
       106




---



##### Table of Contents




    
    if transferred through a stock broker registered to operate on the Port Moresby Stock
Exchange, the transfer is exempt from stamp duty;
    
    otherwise at the rate of 1% of the value of the securities, payable by the purchaser or
transferee.
  
 F. Dividends and Paying Agents
  
 G. Statement by Experts
  
 H. Documents on Display
   
 I. Subsidiary Information
  107




---



##### Table of Contents



Item 11. Quantitative and Qualitative Disclosure about Market Risk
 
 A. Quantitative Information about Market Risk
  
 B. Qualitative Information about Market Risk
       108




---



##### Table of Contents



Item 12. Description of Securities Other than Equity Securities
  109




---



##### Table of Contents



PART II
 
 Item 13. Defaults, Dividend Arrearages and Delinquencies
  
 Item 14. Material Modifications to the Rights of Security Holders and use of Proceeds
  110




---



##### Table of Contents



Item 15. Controls and Procedures
 
 A. Evaluation of Disclosure Controls and Procedures
  
 B. Managements annual report on internal control over financial reporting
     
 C. Attestation Report of the registered public accounting firm
  
 D. Changes in internal control over financial reporting
      111




---



##### Table of Contents



Item 16A. Audit Committee Financial Expert
   
 Item 16B. Code of Ethics
  
    
    full fair and accurate timely disclosure in all reports and documents including all public
communications;
    
    commitment to a work environment where the health, safety and well-being of employees,
contractors, visitors and other parties affected by the Companys operations are paramount;
    
    compliance with all laws, regulations and other requirements relating to all aspects of
business and personal conduct within PNG and the countries with which the Company interacts;
    
    integrity, honesty, transparency and respect in all interactions (whether internal or with
groups outside the Company) including with Lihirian and other representative groups in relation to
issues important to the community;
    
    excellence in the management of environmental responsibilities to ensure minimisation of any adverse effects on the environment or impact on the local community;
    
    adoption of the highest standards of business administration, accountability and corporate
governance, including the ethical use of all Company resources, funds, equipment, information and
time;
    
    fairness, within the framework of commitments to local community groups, to potential and
existing employees in all areas of recruitment, training and administration of employee benefits;
    
    initiative and personal commitment by all employees, contractors and agents working on behalf
of the Company, to the highest standards of work performance and the effective achievement of
Company objectives; and
    
    accountability and willingness to take responsibility.
   112




---



##### Table of Contents



Item 16C. Principal Accountant Fees and Services
 Companies Act
 (a)
    
    review the performance of the external auditors at least annually and be responsible for
recommending to the Board their appointment, re-appointment or termination;(b)
    
    review the scope of the annual audit program, or audit plan and approve the scope of the audit
services to be provided;(c)
    
    review any engagement fees or terms proposed by the external auditors;(d)
    
    consider whether the external auditors provision of non-audit services to the Company and any
other relationship between the external auditor and the Company (if any) is compatible with
maintaining the independence and objectivity of the external auditor and maintaining the quality of
the audit services provided; and(e)
    
    if applicable, take appropriate action in response to the external auditors report to satisfy
itself of the external auditors independence for the purposes of making a recommendation to the
Board.
   2007 Fees
    
    2006 Fees
    
    2005 FeesServices provided
    
    $000
    
    $000
    
    $000Audit fees
    
    
    685
    
    
    
    455
    
    
    
    354Audit-related fees
    
    
    642
    
    
    
    112
    
    
    
    111Tax fees
    
    
    54
    
    
    
    79
    
    
    
    129
  
    
    comfort letters;
    
    statutory audits;
    
    attest services;
    
    consents; and
    
    assistance with and review of documents filed with the SEC.
  
    
    employee benefit plan audits;
    
    due diligence related to mergers and acquisitions;
    
    accounting assistance and audits in connection with proposed or
consummated acquisitions;
    
    internal control reviews; and
    
    consultations concerning financial accounting and reporting standards.
  
    
    tax compliance services, including the preparation of original and amended tax returns;
    
    tax consultations, such as assistance and representation in connection with tax audits and
appeals, tax advice related to mergers and acquisitions, employee benefit plans and requests for
rulings or technical advice from taxing authorities; and
    
    tax planning services.
 113




---



##### Table of Contents



Item 16D. Exceptions from Listing Standards for Audit Committees
  
 Item 16E. Purchases of Equity Securities by Issuer and Affiliates
  114




---



##### Table of Contents



PART III
 
 Item 17. Financial Statements
  
 Item 18. Financial Statements
  115




---



##### Table of Contents



Glossary of Certain Technical Terms
 Alteration
    
    Change in the mineral composition of a
rockAnhydrite
    
    Mineral form of calcium sulfateArgillic alteration
    
    Alteration composed of clay mineralsArsenopyrite
    
    A sulfide mineral of iron and arsenicAutoclave
    
    Vessel used for chemical reactions at high temperature and pressure; for example,
to
oxidize sulfide oreAutogenous threshold
    
    The level of sulfur feed at which the heat generated by oxidation of the sulfides is
sufficient to propagate the reaction.Ball mill
    
    A mill using metal balls as the grinding mediumBench
    
    The horizontal floor along which mining progresses in a pit, also used to
describe the
horizontal segment between two such floors. The thickness of such a segment is
referred to as the bench height. As the pit progresses to lower levels, safety
benches
are left in the walls to catch any rock falling from above.Brecciation; breccia
    
    Fracturing of pre-existing rocks by natural forces; a rock type formed in this
mannerBullion
    
    Gold or silver in bars or ingotsCalcining
    
    To reduce to a powder or friable state by heatCaldera
    
    Large basin shaped, typically circular crater resulting from volcanic activityCarbon-in-leach
    
    Method of extracting gold from solution using carbonConcentrate
    
    Material that has been processed to increase the content of contained metal or
mineral
relative to the contained wasteCounter-current
decantation or CCD
    
    The clarification and concentration of slurry material by the use of several
thickeners in
series, with the washing solution flowing in the opposite direction to the slurryCut-off grade
    
    In reserve estimation, the lowest grade of mineralized material that can be
economically extractedCyanidation
    
    A standard method of extracting gold and silver from crushed or ground mineralized
rock using sodium cyanideCyanide leaching
    
    The extraction of a precious metal from an ore by its dissolution in a cyanide
solutionDilution
    
    Waste which is commingled with ore in the mining processDore
    
    A mixture of gold and other metals, mostly silver, usually the raw metal produced
from
a precious metal mineElectro-winning
    
    The process of removal of gold from solution by the action of electric currentsElution
    
    The process of desorption (taking of gold from carbon)Epithermal
    
    A term applied to deposits formed at shallow depths from ascending solutions of
moderate temperaturesExsolution
    
    To be removed from solution
 116




---



##### Table of Contents



Feasibility study
    
    A technical and financial study of a project at sufficient level of accuracy and detail to
allow a decision as to whether the project should proceedFlocculant
    
    An additive introduced to promote aggregation in a solution.Flotation
    
    The process of concentrating ground mineral particles by attaching them to air bubbles
in a slurry using chemical reagents and recovering the mineralized froth generated by
aerationFree gold
    
    Gold not chemically or physically entrapped and hence amenable to relatively simple
extraction processes.Friable
    
    Said of a rock or mineral that crumbles naturally or is easily broken, pulverized, or
reduced to powder, such as soft or poorly cemented sandstone.Fumaroles
    
    Vents in a volcanic region from which gases and vapors emanate at high temperaturesGAAP
    
    Generally accepted accounting principles.Geochemistry
    
    The study of the variation of chemical elements in rocks and soils; a method of
exploration based on thisGeotechnical
    
    Pertaining to the engineering properties of rocks and soilsGeothermal
    
    Pertaining to the heat of the earths interiorGrade
    
    The metal (or mineral) content per unit of rockGrinding
    
    Reducing mineralized rock to the consistency of fine sand by crushing the abrading in a
rotating steel grinding millGyratory Crusher
    
    A primary crusher consisting of a vertical spindle, the foot of which is mounted in an
eccentric bearing within a conical shell. The top carries a conical crushing head
revolving eccentrically in a conical maw.Hydrological
    
    Pertaining to the science of hydrologykPa
    
    A unit of pressure  an abbreviation for kilopascals, gauge.Joint venture
    
    An arrangement in which two entities unite to form a new, jointly-owned entity to
achieve a specific purpose.Lime
    
    Calcium oxide; artificially made from limestoneLimestone
    
    Rock composed mainly of calcium carbonateLithology
    
    The physical characteristics of rockMafic
    
    Descriptive of rocks containing or made up of ferro-magnesian minerals (usually dark in
color)Magma; magmatic
    
    Liquid molten rock; pertaining to processes and rocks involving magmaMarcasite
    
    Iron sulfide mineral (a form of pyrite)Metallurgy
    
    The science and technology of metals, usually pertaining to the processing of metals
and minerals in miningMill feed grade
    
    The grade of material feed to the mill, equivalent to received at millMilling/mill
    
    The comminution of the ore, although the term has come to cover the broad range of
machinery inside the treatment plant where economically valuable minerals are
separated from the ore
 117




---



##### Table of Contents



Mineable
    
    The portion of a reserve for which extraction is technically and economically feasibleMineral deposit
    
    A mineralized underground body which has been intersected by a sufficient number of
closely-spaced drill holes and/or underground sampling to support sufficient tonnage
and ore grade to warrant further exploration or development; a mineral deposit or
mineralized material does not qualify as a commercially mineable ore body (Reserves),
as prescribed under standards of the Commission, until a final and comprehensive
economic, technical, and legal feasibility study based upon the test results is
concluded.Net smelter returns
    
    The value received for a mineral after refining, less the cost of transporting the mineral
to the refinery and the cost of refiningOpen pit
    
    Surface mining in which the ore is extracted from a pit. The geometry of the pit may
vary with the characteristics of the ore body.Ore
    
    Material that contains one or more minerals, at least one of which has commercial
value and which can be recovered at a profitOre body
    
    A continuous well defined mass of material of sufficient ore content to make extraction
economically feasibleOre grade
    
    The average amount of the valuable metal or mineral contained in a specific mass of
ore; for gold, this is usually expressed as troy ounces per short ton (2,000 pounds
avoirdupois) or grams per tonneOunces
    
    Troy ounces of 31.103 grams, or 1.097 Avoirdupois ouncesOutcrop
    
    That part of a rock formation exposed on surfaceOxide ore
    
    Gold ore that has been subjected to oxidation through natural weathering and surface
water percolation to the extent that the minerals are readily treatable by standard
processesPhyllic alteration
    
    Hydrothermal alteration of rocks involving the secondary formation of quartz and
sericitePit shell
    
    Designed outline of an open pit mine containing all the open pit ore reservesPleistocene
    
    A subdivision of geologic time, about 10,000  2 million years before the presentPotassic alteration
    
    Hydrothermal alteration of rock involving the secondary formation of potash feldspar,
commonly the mineral orthoclase, usually with biotitePressure oxidation
    
    A method of processing refractory sulfide orePropylitic alteration
    
    Hydrothermal alteration of basic rocks involving the secondary formation of chlorite,
epidote, calcite and sulfidePyrite
    
    Iron sulfide mineralRC hole
    
    A reverse circulation drill hole produced by percussion drilling in which rock cuttings
are
recovered instead of core. Reverse circulation refers to the air flow which flows
downward around the outside of the drill pipe, returning with the rock cuttings through
the drill bit face and stem.Reactive sulfur
    
    In mineral processing involving pressure oxidation, sulfur in the form of sulfide
 118




---



##### Table of Contents



Refining
    
    The final stage of metal production in which final impurities are removed from the
molten metal by introducing air and fluxes. The impurities are removed as gases or
slagRefractory ore
    
    Ore not amenable to standard processing techniquesSampling
    
    Taking small pieces of rock at intervals along exposed mineralization for assay (to
determine the mineral content)SAG
    
    Semi-autogenous grinding, a method of comminution that utilizes the rock fragments
to assist in the grinding processSeismic
    
    Pertaining to shock waves that pass through the earthShotcreting
    
    Application by pressure spraying of a setting medium with the characteristics of
concrete for stabilization of rock faces.Silt curtain
    
    A flooding barrier to be deployed offshore from watercourses, which causes temporary
ponding of sediment laden fresh water within its confines to enhance settling, and
mixing with sea water, as the turbid stream is forced underneath the barrierSlurry
    
    A fluid comprising fine solids suspended in a solution (generally water containing
additives)Smelting
    
    Thermal processing whereby molten metal is liberated from beneficiated ore or
concentrate with impurities separating as lighter slagStockpile
    
    A store of unprocessed oreStripping
    
    The process of removing overburden or waste to expose oreStripping ratio
    
    In open pit mining, the ratio of waste material to ore, usually expressed as tonnes
waste : tonnes oreSulfide ore
    
    Ore characterized by the inclusion of metal in the crystal structure of a sulfide
mineral.
This type of ore is often refractory oreSuperannuation fund
    
    A contributory pension fund.Surface mixed layer
    
    Uppermost layer of the ocean that is constantly mixed by wind and wave actionTailings
    
    The finely-ground waste product from ore processingUnderground Mine
    
    Mining of an ore body beneath the earths surface where ore is recovered using trucks
via a portal or hoisted via a shaft
 119




---



##### Table of Contents



Conversion Table
  US$/ oz. Gold
    
    US dollars per troy ounce of goldUS$/ t ore
    
    US dollars per tonne of oreC
    
    Degrees Celsiusg Au/t
    
    Grams of gold per tonneha
    
    Hectareskg
    
    Kilogramskg Au/t
    
    Kilograms of gold per tonnekPa
    
    kilo Pascalskt
    
    kilo tonnesm2
    
    Square metersm3
    
    Cubic metersmtpy
    
    Million tonnes per yeart/d
    
    Tonnes per dayt/h
    
    Tonnes per hourUnit EquivalentsCelsius degrees
    
    (Fahrenheit degrees minus 32.0) times 5/91 cubic meter
    
    35.314 cubic feet1 gram
    
    0.03215 troy ounces1 gram Au/tonne
    
    0.02917 troy ounces gold/short ton1 hectare
    
    2.471 acres1 kilogram
    
    2.205 pounds01 kilometer
    
    0.62 statute miles1 kilopascal
    
    0.145 pounds per square inch1 kilo tonne
    
    1102.31 short tons1 meter
    
    3.281 feet1 millimeter
    
    0.039 inches1 square kilometer
    
    0.3861 square miles1 square meter
    
    10.764 square feet1 tonne
    
    1.1023 short tons
 120




---



##### Table of Contents



FINANCIAL STATEMENTS LIHIR
 GOLD LIMITED Audited
 
 Financial Statements
 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
    
    
    F-A2CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
    
    
    1CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
    
    
    2CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
    
    
    3CONSOLIDATED STATEMENTS OF CASH FLOWS
    
    
    4NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
    
    
    5DIRECTORS DECLARATION
    
    
    66SUPPLEMENTARY INFORMATION
    
    
    67
 F-A-1




---



##### Table of Contents



PricewaterhouseCoopers6th Floor Credit HouseCuthbertson StreetPO Box 484PORT MORESBYPAPUA NEW GUINEAWebsite: www.pwc.com.pgTelephone (675) 321 1500Facsimile (675) 321 1428
 
 Report of Independent Registered Public Accounting Firm
  Internal Control  Integrated Framework




---



##### Table of Contents



or that
 a




---



##### Table of Contents



LIHIR GOLD LIMITED
 
 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
 Year ended 31 December 2007, 2006 and 2005
 $mNote
    
    
    2007
    
    
    2006
    
    
    2005Revenue
    
    
    7
    
    
    
    498.4
    
    
    
    386.0
    
    
    
    264.0Cost of sales
    
    
    9
    
    
    
    (261.3
    )
    
    
    (211.0
    )
    
    
    (196.4
    )Gross profit from mining activities
    
    
    
    
    
    
    237.1
    
    
    
    175.0
    
    
    
    67.6Corporate expense
    
    
    
    
    
    
    (25.3
    )
    
    
    (12.1
    )
    
    
    (1.9
    )Project studies
    
    
    
    
    
    
    (7.5
    )
    
    
    (0.8
    )
    
    
    Exploration expense
    
    
    
    
    
    
    (8.4
    )
    
    
    (5.9
    )
    
    
    (6.0
    )Operating profit before other income / (expense)
    
    
    
    
    
    
    195.9
    
    
    
    156.2
    
    
    
    59.7Other income / (expense):Hedging loss
    
    
    10
    
    
    
    (97.2
    )
    
    
    (78.3
    )
    
    
    (44.1
    )Other expenses
    
    
    11
    
    
    
    (13.8
    )
    
    
    
    
    
    
    (2.5
    )Operating profit before finance costs
    
    
    
    
    
    
    84.9
    
    
    
    77.9
    
    
    
    13.1Financial income
    
    
    12
    
    
    
    10.9
    
    
    
    4.2
    
    
    
    6.2Financial expenses
    
    
    12
    
    
    
    (131.6
    )
    
    
    (6.2
    )
    
    
    (3.6
    )Profit / (loss) before tax
    
    
    
    
    
    
    (35.8
    )
    
    
    75.9
    
    
    
    15.7Income tax benefit / (expense)
    
    
    13
    
    
    
    11.7
    
    
    
    (22.1
    )
    
    
    (5.9
    )Net profit / (loss) after tax
    
    
    
    
    
    
    (24.1
    )
    
    
    53.8
    
    
    
    9.8Other comprehensive incomeExchange difference on translation of foreign
operations
    
    
    27
    
    
    
    42.6
    
    
    
    
    
    
    
    Cash flow hedges
    
    
    27
    
    
    
    38.7
    
    
    
    (50.8
    )
    
    
    (72.4
    )Share based payments
    
    
    27
    
    
    
    2.9
    
    
    
    5.5
    
    
    
    Net change in fair value of available for sale financial
assets
    
    
    27
    
    
    
    1.2
    
    
    
    
    
    
    
    Income tax on other comprehensive income
    
    
    13
    
    
    
    (4.7
    )
    
    
    20.3
    
    
    
    8.9Other comprehensive income for the period net of
tax
    
    
    
    
    
    
    80.7
    
    
    
    (25.0
    )
    
    
    (63.5
    )Total comprehensive income
    
    
    
    
    
    
    56.6
    
    
    
    28.8
    
    
    
    (53.7
    )Earnings / (loss) per share
    
    
    37- Basic (cents/share)
    
    
    
    
    
    
    (1.4
    )
    
    
    4.2
    
    
    
    0.8- Diluted (cents/share)
    
    
    
    
    
    
    (1.4
    )
    
    
    4.2
    
    
    
    0.8
  -F- 1 -




---



##### Table of Contents



LIHIR GOLD LIMITED
 
 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at 31 December 2007 and 2006
 $mNote
    
    
    2007
    
    
    2006ASSETSCURRENT ASSETSCash and cash equivalents
    
    
    14
    
    
    
    174.2
    
    
    
    47.0Receivables
    
    
    16
    
    
    
    14.9
    
    
    
    4.6Inventories
    
    
    17
    
    
    
    102.8
    
    
    
    75.3Derivative financial instruments
    
    
    18
    
    
    
    
    
    
    
    0.3Other assets
    
    
    
    
    
    
    2.3
    
    
    
    5.5Total current assets
    
    
    
    
    
    
    294.2
    
    
    
    132.7NON-CURRENT ASSETSReceivables
    
    
    16
    
    
    
    0.4
    
    
    
    0.5Inventories
    
    
    17
    
    
    
    169.1
    
    
    
    141.7Derivative financial instruments
    
    
    18
    
    
    
    
    
    
    
    2.4Deferred mining costs
    
    
    19
    
    
    
    218.3
    
    
    
    148.3Property plant and equipment
    
    
    20
    
    
    
    1,430.6
    
    
    
    951.2Intangible assets
    
    
    21
    
    
    
    98.4
    
    
    
    Available-for-sale financial assets
    
    
    22
    
    
    
    2.5
    
    
    
    33.0Deferred income tax asset
    
    
    13
    
    
    
    92.1
    
    
    
    86.2Total non-current assets
    
    
    
    
    
    
    2,011.4
    
    
    
    1,363.3Total assets
    
    
    
    
    
    
    2,305.6
    
    
    
    1,496.0LIABILITIESCURRENT LIABILITIESAccounts payable & accrued liabilities
    
    
    23
    
    
    
    64.0
    
    
    
    46.6Provisions
    
    
    24
    
    
    
    13.5
    
    
    
    6.4Borrowings and finance facilities
    
    
    25
    
    
    
    0.3
    
    
    
    62.5Derivative financial instruments
    
    
    18
    
    
    
    
    
    
    
    61.5Income tax payable
    
    
    13
    
    
    
    
    
    
    
    0.3Total current liabilities
    
    
    
    
    
    
    77.8
    
    
    
    177.3NON-CURRENT LIABILITIESProvisions
    
    
    24
    
    
    
    15.2
    
    
    
    14.2Borrowings
    
    
    25
    
    
    
    0.7
    
    
    
    218.6Derivative financial instruments
    
    
    18
    
    
    
    
    
    
    
    274.0Deferred income tax liability
    
    
    13
    
    
    
    50.8
    
    
    
    Total non-current liabilities
    
    
    
    
    
    
    66.7
    
    
    
    506.8Total liabilities
    
    
    
    
    
    
    144.5
    
    
    
    684.1NET ASSETS
    
    
    
    
    
    
    2,161.1
    
    
    
    811.9SHAREHOLDERS EQUITYShare capital
    
    
    26
    
    
    
    2,319.7
    
    
    
    1,027.1Reserves
    
    
    27
    
    
    
    (170.0
    )
    
    
    (250.7
    )Retained earnings
    
    
    27
    
    
    
    11.4
    
    
    
    35.5TOTAL SHAREHOLDERS EQUITY
    
    
    
    
    
    
    2,161.1
    
    
    
    811.9
  -F- 2 -




---



##### Table of Contents



LIHIR GOLD LIMITED
 
 CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Year ended 31 December 2007, 2006 and 2005
 RetainedIssued capital
    
    Reserves
    
    Earnings
    
    Total EquityCONSOLIDATED ENTITY
    
    $m
    
    $m
    
    $m
    
    $mBalance at 1 January 2005
    
    
    1,027.5
    
    
    
    (162.2
    )
    
    
    (28.1
    )
    
    
    837.2Total comprehensive income / (expense) for the period
    
    
    
    
    
    
    (63.5
    )
    
    
    9.8
    
    
    
    (53.7
    )Purchase of treasury sharesBalance at 31 December 2005
    
    
    1,027.5
    
    
    
    (225.7
    )
    
    
    (18.3
    )
    
    
    783.5Balance at 1 January 2006
    
    
    1,027.5
    
    
    
    (225.7
    )
    
    
    (18.3
    )
    
    
    783.5Total comprehensive income / (expense) for the period
    
    
    
    
    
    
    (25.0
    )
    
    
    53.8
    
    
    
    28.8Purchase of treasury shares
    
    
    (0.4
    )
    
    
    
    
    
    
    
    
    
    
    (0.4
    )Balance at 31 December 2006
    
    
    1,027.1
    
    
    
    (250.7
    )
    
    
    35.5
    
    
    
    811.9Balance at 1 January 2007
    
    
    1,027.1
    
    
    
    (250.7
    )
    
    
    35.5
    
    
    
    811.9Total comprehensive income / (expense) for the period
    
    
    
    
    
    
    80.7
    
    
    
    (24.1
    )
    
    
    56.6Issue of shares  on acquisition of Ballarat
    
    
    316.5
    
    
    
    
    
    
    
    
    
    
    
    316.5Issue of shares  rights issue / placement (net of transaction costs)
    
    
    977.4
    
    
    
    
    
    
    
    
    
    
    
    977.4Purchase of treasury shares
    
    
    (1.3
    )
    
    
    
    
    
    
    
    
    
    
    (1.3
    )Balance at 31 December 2007
    
    
    2,319.7
    
    
    
    (170.0
    )
    
    
    11.4
    
    
    
    2,161.1
  -F- 3 -




---



##### Table of Contents



LIHIR GOLD LIMITED
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
Year ended 31 December 2007, 2006 and 2005
 $mNote
    
    
    2007
    
    
    2006
    
    
    2005CASH FLOWS FROM OPERATING ACTIVITIESReceipts from customers
    
    
    
    
    
    
    472.4
    
    
    
    329.3
    
    
    
    243.7Payments arising from suppliers & employees
    
    
    
    
    
    
    (365.9
    )
    
    
    (268.7
    )
    
    
    (233.5
    )Cash generated from operations
    
    
    
    
    
    
    106.5
    
    
    
    60.6
    
    
    
    10.2Purchase of gold to close out hedge book
    
    
    
    
    
    
    (648.4
    )
    
    
    
    
    
    
    Receipts on close out of hedge book
    
    
    
    
    
    
    279.9
    
    
    
    
    
    
    
    Hedge book restructure & fees
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (62.2
    )Interest and finance charges paid
    
    
    
    
    
    
    (8.0
    )
    
    
    (3.3
    )
    
    
    (2.5
    )Net cash flow from operating activities
    
    
    15
    
    
    
    (270.0
    )
    
    
    57.3
    
    
    
    (54.5
    )CASH FLOWS FROM INVESTING ACTIVITIESInterest received
    
    
    
    
    
    
    9.7
    
    
    
    1.4
    
    
    
    1.9Purchase of property plant and equipment
    
    
    
    
    
    
    (206.7
    )
    
    
    (170.8
    )
    
    
    (99.5
    )Proceeds on disposal of property, plant & equipment
    
    
    
    
    
    
    
    
    
    
    0.1
    
    
    
    0.4Payments for investments
    
    
    
    
    
    
    (1.2
    )
    
    
    (34.0
    )
    
    
    Acquisition of subsidiary net of cash acquired
    
    
    28
    
    
    
    19.6
    
    
    
    
    
    
    
    Net cash flow from investing activities
    
    
    
    
    
    
    (178.6
    )
    
    
    (203.3
    )
    
    
    (97.2
    )CASH FLOWS FROM FINANCING ACTIVITIESDrawdown of secured debt
    
    
    
    
    
    
    22.4
    
    
    
    65.6
    
    
    
    245.5Repayment of secured debt
    
    
    
    
    
    
    (88.2
    )
    
    
    
    
    
    
    (49.5
    )Repayment of gold loan
    
    
    
    
    
    
    (333.4
    )
    
    
    
    
    
    
    Proceeds of equity issue
    
    
    
    
    
    
    989.0
    
    
    
    
    
    
    
    Underwriting expenses
    
    
    
    
    
    
    (11.6
    )
    
    
    
    
    
    
    Payment for treasury shares
    
    
    
    
    
    
    (1.3
    )
    
    
    (0.4
    )
    
    
    Net cash flow from financing activities
    
    
    
    
    
    
    576.9
    
    
    
    65.2
    
    
    
    196.0Net increase / (decrease) in cash and cash
equivalents
    
    
    
    
    
    
    128.3
    
    
    
    (80.8
    )
    
    
    44.3Cash and cash equivalents at beginning of year
    
    
    
    
    
    
    47.0
    
    
    
    127.8
    
    
    
    83.5Effects of exchange rates to changes in cash held
    
    
    
    
    
    
    (1.1
    )
    
    
    
    
    
    
    Cash and cash equivalents at end of year
    
    
    14
    
    
    
    174.2
    
    
    
    47.0
    
    
    
    127.8Financing arrangements
    
    
    25
  -F- 4 -




---



##### Table of Contents



LIHIR GOLD LIMITED
 
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
  (i) Basis of preparation
 PNG Companies Act 1997
   
    
    derivative financial instruments are measured at fair value
    
    financial instruments at fair value through profit and loss are measured at fair value
    
    available for sale financial assets are measured at fair value
  (ii) Consolidation
      (iii) Exploration and evaluation expenditure
  (iv) Development properties
    (v) Mine properties
    -F- 5 -




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
   (vi) Deferred mining costs
       (vii) Capitalisation of interest and financing costs
   (viii) Property, plant and equipment
 Cost and valuation
  Depreciation and amortisation
    - F - 6 -




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
  Percentage
    
    Percentagedepreciated as unit-of-
    
    depreciated asFixed asset classification
    
    use
    
    straight-lineDeferred expenditure
    
    
    100
    %
    
    
    Land & buildings
    
    
    100
    %
    
    
    Plant & equipment
    
    
    85
    %
    
    
    15
    %Total average
    
    
    90
    %
    
    
    10
    %
      (ix) Intangible assets
 Licences and exploration rights
  Mining information
  Land owner share grants
  Goodwill
    (x) Inventories
    - F - 7 -




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
   (xi) Impairment of assets
  (xii) Restoration, rehabilitation and environmental expenditure
    (xiii) Leases
     (xiv) Receivables
  (xv) Payables
  (xvi) Borrowings
  - F - 8 -




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 Gold loan
 IAS39, Financial Instruments: Recognition and Measurement
 (xvii) Non-derivative financial instruments
    Held to maturity investments
  Available-for-sale financial assets
  Financial assets at fair value through profit or loss
  Other
  (xviii) Derivative financial instruments and hedging activities
      - F - 9 -




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
   Hedge accounting
   1.
    
    hedges of the fair value of recognised assets, liabilities or firm commitments (fair value
hedge);2.
    
    hedges of a particular cash flow risk associated with a recognised asset, liability or highly
probable forecast transaction (cash flow hedge); or3.
    
    hedges of a net investment in a foreign operation (net investment hedge)
    Cash flow hedges
       Net investment hedges
  Derivatives that do not qualify for hedge accounting
  - F - 10 -




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 Hedge book re-structure
   (xix) Share capital
   (xx) Share-based payments
  
    
    The Lihir Executive Share Plan (the LESP), which provides benefits to the executives of the Company; and
    
    Share issues made to local Lihirian landowners through Mineral Resources Lihir Limited (MRL).
 Executive share plan
        Share-based payments to local Lihirian landowners
   (xxi) Revenue recognition
  a.
    
    the product is in a form suitable for delivery and no further processing is required by, or on
behalf of, the Company;b.
    
    the quantity and quality (grade) of the product can be determined with reasonable accuracy;c.
    
    the product has been dispatched to the customer and is no longer under the physical control of
the Company (or property in the product has earlier passed to the customer);
 - F - 11 -




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 d.
    
    the selling price can be measured reliably;e.
    
    it is probable that the economic benefits associated with the transaction will flow to the Company; andf.
    
    the costs incurred or to be incurred in respect of the transaction can be measured reliably.
    (xxii) Hedging income / expense
   (xxiii) Interest income
  (xxiv) Carbon credits
  (xxv) Cash and cash equivalents
  a.
    
    cash on hand and at call deposits with banks or financial institutions, net of bank overdrafts; andb.
    
    investments in money market instruments with less than 90 days to maturity from the date of acquisition.
 (xxvi) Employee benefits
 Wages, Salaries, Salary at Risk, Annual Leave and Sick Leave
  Long Service Leave
   Defined Contribution Superannuation Plan
   - F - 12 -




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 (xxvii) Provisions
   (xxviii) Dividends
  (xxix) Income tax
      Tax consolidation legislation
   (xxx) Goods and service tax (GST)
    (xxxi) Foreign currency translation
 Functional and presentation currency
  Transactions and balances
  - F - 13 -




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 Consolidated Entity companies
  §
    
    Assets and liabilities for each statement of financial position presented are translated at
the closing rate at the date of that statement of financial position
 §
    
    Income and expenses for each statement of comprehensive income are translated at average
exchange rates (unless this is not a reasonable approximation of the cumulative effect of the
rates prevailing on the transaction dates, in which case income and expenses are translated at
the dates of the transactions), and
 §
    
    All resulting exchange differences are recognised in the foreign currency translation
reserve.
   (xxxii) Business combinations
   (xxxiii) Segment reporting
   (xxxiv) Comparative figures
  (xxxv) Rounding of amounts
  - F - 14 -




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 NOTE 2: CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
    Recoverability of long-lived assets
  Recoverability of non-current ore stockpiles
  Determination of ore reserves and remaining mine life
     Provision for restoration and rehabilitation obligations
  Recoverability of deferred tax assets
  Unit- of-Production method of depreciation
  Deferred mining costs
   - F - 15 -




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 NOTE 3: CHANGES IN ACCOUNTING POLICIES AND NEW ACCOUNTING STANDARDS
     Previous financial report
    
    
    
    
    
    
    Effect of reclassification
    
    
    Current financial report2006
    
    
    2005
    
    
    
    
    
    
    2006
    
    
    2005
    
    
    2006
    
    
    2005Revenue
    
    
    307.7
    
    
    
    225.2
    
    
    
    (a
    )
    
    
    (307.7
    )
    
    
    (225.2
    )
    
    
    
    
    
    
    Sales revenue
    
    
    
    
    
    
    
    
    
    
    (a
    )
    
    
    386.0
    
    
    
    264.0
    
    
    
    386.0
    
    
    
    264.0Gold lease rate fees
    
    
    2.8
    
    
    
    5.0
    
    
    
    (g
    )
    
    
    (2.8
    )
    
    
    (5.0
    )
    
    
    
    
    
    
    Fair value losses
    
    
    (1.7
    )
    
    
    (5.4
    )
    
    
    (a
    )
    
    
    1.7
    
    
    
    5.4
    
    
    
    
    
    
    
    Other revenue
    
    
    1.6
    
    
    
    
    
    
    
    (a
    )
    
    
    (1.6
    )
    
    
    
    
    
    
    
    
    
    
    Mining expenses
    
    
    (107.6
    )
    
    
    (95.3
    )
    
    
    (b
    )
    
    
    107.6
    
    
    
    95.3
    
    
    
    
    
    
    
    Processing costs
    
    
    (47.9
    )
    
    
    (41.6
    )
    
    
    (b
    )
    
    
    47.9
    
    
    
    41.6
    
    
    
    
    
    
    
    Power generation costs
    
    
    (27.0
    )
    
    
    (27.4
    )
    
    
    (b
    )
    
    
    27.0
    
    
    
    27.4
    
    
    
    
    
    
    
    General and
administrative expenses
    
    
    (66.6
    )
    
    
    (57.9
    )
    
    
    (b)/
    (c)/(d)
    
    
    66.6
    
    
    
    57.9
    
    
    
    
    
    
    
    Refining, royalty and
management fees
    
    
    (13.0
    )
    
    
    (6.8
    )
    
    
    (b
    )
    
    
    13.0
    
    
    
    6.8
    
    
    
    
    
    
    
    Deferred mining costs
    
    
    56.3
    
    
    
    25.0
    
    
    
    (b
    )
    
    
    (56.3
    )
    
    
    (25.0
    )
    
    
    
    
    
    
    Costs deferred and
transferred to
inventories
    
    
    19.4
    
    
    
    39.2
    
    
    
    (b
    )
    
    
    (19.4
    )
    
    
    (39.2
    )
    
    
    
    
    
    
    Depreciation and
amortisation
    
    
    (37.4
    )
    
    
    (35.7
    )
    
    
    (b
    )
    
    
    37.4
    
    
    
    35.7
    
    
    
    
    
    
    
    Cost of sales
    
    
    
    
    
    
    
    
    
    
    (b
    )
    
    
    (211.0
    )
    
    
    (196.4
    )
    
    
    (211.0
    )
    
    
    (196.4
    )Corporate expenses
    
    
    
    
    
    
    
    
    
    
    (c
    )
    
    
    (12.1
    )
    
    
    (1.9
    )
    
    
    (12.1
    )
    
    
    (1.9
    )Project studies
    
    
    
    
    
    
    
    
    
    
    (d
    )
    
    
    (0.8
    )
    
    
    
    
    
    
    (0.8
    )
    
    
    Exploration expenses
    
    
    (5.9
    )
    
    
    (6.2
    )
    
    
    (e
    )
    
    
    
    
    
    
    0.2
    
    
    
    (5.9
    )
    
    
    (6.0
    )Hedging loss
    
    
    
    
    
    
    
    
    
    
    (a
    )
    
    
    (78.3
    )
    
    
    (44.1
    )
    
    
    (78.3
    )
    
    
    (44.1
    )Other expenses
    
    
    
    
    
    
    
    
    
    
    (f
    )
    
    
    
    
    
    
    (2.5
    )
    
    
    
    
    
    
    (2.5
    )Interest income
    
    
    1.4
    
    
    
    1.2
    
    
    
    (g
    )
    
    
    (1.4
    )
    
    
    (1.2
    )
    
    
    
    
    
    
    Finance costs
    
    
    (6.2
    )
    
    
    (3.6
    )
    
    
    (h
    )
    
    
    6.2
    
    
    
    3.6
    
    
    
    
    
    
    
    Financial income
    
    
    
    
    
    
    
    
    
    
    (g
    )
    
    
    4.2
    
    
    
    6.2
    
    
    
    4.2
    
    
    
    6.2Financial expenses
    
    
    
    
    
    
    
    
    
    
    (h
    )
    
    
    (6.2
    )
    
    
    (3.6
    )
    
    
    (6.2
    )
    
    
    (3.6
    )Income tax expense
    
    
    (22.1
    )
    
    
    (5.9
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (22.1
    )
    
    
    (5.9
    )Net profit / (loss) after
tax
    
    
    53.8
    
    
    
    9.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    53.8
    
    
    
    9.8
 - F - 16 -




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 
 Notes
 (a)
    
    Net loss realised on hedging instruments has been re-classified from revenue to hedging loss
expense. Other revenue has been classified as revenue.(b)
    
    Mining expenses, processing costs, power generation costs, refining and royalty expenses,
deferred mining costs, costs deferred and transferred to inventory, depreciation and
amortisation and the operating expense portion of general and administrative expenses have
been reclassified to cost of sales. These items were previously reported under operating
expenses.(c)
    
    The portion of general and administrative expenditure relating to corporate activities has
been re-classified from operating expenses/ cost of sales to corporate expenses.(d)
    
    An amount of $0.8 million of research and development expenditure previously included within
general and administrative expenditure has been re-classified as project study expenditure.(e)
    
    An amount of $0.2 million has been re-classified as cost of sales.(f)
    
    An amount of $2.5 million relating to loss on disposal of fixed assets has been re-classified
from general and administrative costs to other expenses.(g)
    
    Interest income and gold lease rate fees have been reclassified as financial income.(h)
    
    Finance costs have been re-classified to financial expenses.  Application date forApplication date
    
    Impact on Consolidated Entity's
    
    the ConsolidatedReference
    
    Title
    
    Summary
    
    of standard
    
    financial report
    
    EntityIFRS 7
    
    Financial
Instruments:
Disclosures
    
    New standard
replacing the
disclosure
requirements
    
    1 January 2007
    
    IFRS 7 is a disclosure standard
so has no direct impact on the
measurement and recognition
criteria relating to amounts
included in the Consolidated
Entitys financial statements, but
does result in changes to the
financial instrument disclosures
included in the Consolidated
Entitys annual report.
    
    1 January 2007IFRS 8
    
    Operating
Segments
    
    New standard
    
    1 January 2009
    
    IFRS 8 is a disclosure standard
so has no direct impact on the
measurement and recognition
criteria relating to amounts
included in the Consolidated
Entitys financial statements, but
does result in changes to the
segment reporting disclosures
included in the Consolidated
Entitys financial report. (Refer to
Note 6)
    
    1 January 2007IAS 1
    
    Presentation
of Financial
Statements
    
    Added
disclosures
about an
entitys capital
and changed
the presentation
and format of
financial
statements.
    
    1 January 2007
    
    IAS 1 is a disclosure standard so
has no direct impact on the
measurement and recognition
criteria relating to amounts
included in the Groups financial
statements, but may result in
changes to capital disclosures
included in the Groups annual
report, and presentation and
format of financial statements.
    
    1 January 2007
 - F - 17 -




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
  Preliminary assessment on the
    
    Application date forApplication date
    
    impact of the Consolidated
    
    the ConsolidatedReference
    
    Title
    
    Summary
    
    of standard
    
    Entity's financial report
    
    EntityIAS 23
    
    Borrowing
Costs
    
    Amended to
require all
borrowing costs
associated with
a qualifying
asset to be
capitalised.
    
    1 January 2009
    
    This is consistent with the
Consolidated Entitys existing
accounting policy for
Capitalisation of interest and
financing costs and is not
expected to have any additional
impact.
    
    1 January 2009IFRIC 11
    
    IFRS 2 
Treasury
Share
Transactions
    
    This
interpretation
deals with
accounting for
share based
payments
issued between
two entities in
the same group
and whether
certain share
based
payments
should be
accounted for
as equity-
settled or cash-
settled awards.
    
    1 March 2007
    
    This is consistent with the
Consolidated Entitys existing
accounting policy for Share
based payments and is not
expected to have any additional
impact.
    
    1 January 2008IFRIC 12
    
    Service
Concession
Arrangements
    
    This
interpretation
deals with
accounting for
publicly owned
infrastructure
constructed,
operated, and
maintained by
the private
sector.
    
    1 January 2008
    
    Not applicable
    
    Not applicableIFRIC 13
    
    Customer
Loyalty
Programmes
    
    This
interpretation
deals with
sales of goods
with customer
award credits
should be
accounted as
multiple-
element
transactions.
    
    1 July 2008
    
    Not applicable
    
    Not applicableIFRIC 14
    
    IAS 19  The
Limit on a
Defined
Benefit Asset,
Minimum
Funding
Requirements
And their
Interaction
    
    This
interpretation
provides
Clarification of
IAS 19
regarding
future
contributions
and minimum
funding
requirements of
defined benefit
plans.
    
    1 January 2008
    
    Not applicable
    
    Not applicable
 - F - 18 -




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 NOTE 4: MINING LEASES
    Tenement No.
    
    Location
    
    Date registered
    
    Expiry dateEL 3018
    
    Ballarat
    
    21 November 2007
    
    3 October 2009MIN 5396
    
    Ballarat
    
    17 December 2003
    
    4 October 2008MIN 4194
    
    Berringa
    
    17 April 2003
    
    14 February 2012MIN 4847
    
    Ballarat South
    
    10 August 1995
    
    1 November 2009MIN 5444
    
    Yarrowee River
    
    4 April 2006
    
    4 April 2026EL 4920
    
    North Creswick
    
    17 January 2007
    
    17 January 2012
  - F - 19 -




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 NOTE 5: FINANCIAL RISK MANAGEMENT
 Overview
  
    
    Credit risk;
    
    Liquidity risk; and,
    
    Market risk (including foreign exchange risk, interest rate risk and commodity
price risk)
   Credit risk
   Liquidity risk
    Market Risk
 (i) Foreign exchange risk
  (ii) Cash flow and fair value Interest rate risk
  (iii) Price Risk
  - F - 20 -




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
   - F - 21 -




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 NOTE 6: SEGMENT REPORTING
 Identification of reportable segments
     Types of products
  Accounting policies and inter-segment transactions
  
    
    Interest revenue
 
    
    Finance costs
 
    
    Hedging gains or losses
 
    
    Income taxes
 
    
    Corporate expenses
  
    
    Cash and cash equivalents
 
    
    Current and deferred tax balances
 
    
    Interest bearing loans and borrowings
 
    
    Derivative financial instruments
 
    
    Assets and liabilities of the corporate office
  Reporting by geographical segments
 TotalPapua New
    
    
    
    
    
    
    
    
    
    
    ConsolidatedGuinea
    
    
    Australia
    
    
    Unallocated
    
    
    EntityYear ended 31 December 2007
    
    $m
    
    
    $m
    
    
    $m
    
    
    $mRevenue from external customers
    
    
    497.6
    
    
    
    0.8
    
    
    
    
    
    
    
    498.4Depreciation and amortisation
    
    
    (50.3
    )
    
    
    
    
    
    
    (0.1
    )
    
    
    (50.4
    )Cost of sales (excluding depreciation and amortisation)
    
    
    (210.1
    )
    
    
    (0.8
    )
    
    
    
    
    
    
    (210.9
    )Mine operating earnings
    
    
    237.2
    
    
    
    
    
    
    
    (0.1
    )
    
    
    237.1Corporate expense
    
    
    
    
    
    
    
    
    
    
    (25.3
    )
    
    
    (25.3
    )Project studies
    
    
    (7.5
    )
    
    
    
    
    
    
    
    
    
    
    (7.5
    )Exploration expense
    
    
    (8.2
    )
    
    
    (0.2
    )
    
    
    
    
    
    
    (8.4
    )Operating profit / (loss) before other income / (expenses)
    
    
    221.5
    
    
    
    (0.2
    )
    
    
    (25.4
    )
    
    
    195.9Other income / (expense)
 - F - 22 -




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 TotalPapua New
    
    
    
    
    
    
    
    
    
    
    ConsolidatedGuinea
    
    
    Australia
    
    
    Unallocated
    
    
    EntityYear ended 31 December 2007
    
    $m
    
    
    $m
    
    
    $m
    
    
    $mHedging loss
    
    
    
    
    
    
    
    
    
    
    (97.2
    )
    
    
    (97.2
    )Other income and expenses
    
    
    (13.0
    )
    
    
    
    
    
    
    0.1
    
    
    
    (12.9
    )Net finance costs
    
    
    
    
    
    
    
    
    
    
    (121.6
    )
    
    
    (121.6
    )Profit / (loss) before tax
    
    
    208.5
    
    
    
    (0.2
    )
    
    
    (244.1
    )
    
    
    (35.8
    )Income tax benefit / (expense)
    
    
    
    
    
    
    
    
    
    
    11.7
    
    
    
    11.7Net profit / (loss) after tax
    
    
    208.5
    
    
    
    (0.2
    )
    
    
    (232.4
    )
    
    
    (24.1
    )
 TotalPapua New
    
    
    
    
    
    
    
    
    
    
    ConsolidatedGuinea
    
    
    Australia
    
    
    Unallocated
    
    
    EntityYear ended 31 December 2006
    
    $m
    
    
    $m
    
    
    $m
    
    
    $mRevenue from external customers
    
    
    386.0
    
    
    
    
    
    
    
    
    
    
    
    386.0Depreciation and amortisation
    
    
    (37.3
    )
    
    
    
    
    
    
    
    
    
    
    (37.3
    )Cost of sales (excluding depreciation and amortisation)
    
    
    (173.7
    )
    
    
    
    
    
    
    
    
    
    
    (173.7
    )Mine operating earnings
    
    
    175.0
    
    
    
    
    
    
    
    
    
    
    
    175.0Corporate expense
    
    
    
    
    
    
    
    
    
    
    (12.1
    )
    
    
    (12.1
    )Project studies
    
    
    (0.8
    )
    
    
    
    
    
    
    
    
    
    
    (0.8
    )Exploration expense
    
    
    (5.9
    )
    
    
    
    
    
    
    
    
    
    
    (5.9
    )Operating profit / (loss)
    
    
    168.3
    
    
    
    
    
    
    
    (12.1
    )
    
    
    156.2Hedging loss
    
    
    
    
    
    
    
    
    
    
    (78.3
    )
    
    
    (78.3
    )Other income and expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net finance costs
    
    
    
    
    
    
    
    
    
    
    (2.0
    )
    
    
    (2.0
    )Profit / (loss) before income tax
    
    
    168.3
    
    
    
    
    
    
    
    (92.4
    )
    
    
    75.9Income tax expense
    
    
    
    
    
    
    
    
    
    
    (22.1
    )
    
    
    (22.1
    )Net profit / (loss) after tax
    
    
    168.3
    
    
    
    
    
    
    
    (114.5
    )
    
    
    53.8
 TotalPapua New
    
    
    
    
    
    
    
    
    
    
    ConsolidatedGuinea
    
    
    Australia
    
    
    Unallocated
    
    
    EntityYear ended 31 December 2005
    
    $m
    
    
    $m
    
    
    $m
    
    
    $mRevenue from external customers
    
    
    264.0
    
    
    
    
    
    
    
    
    
    
    
    264.0Depreciation and amortisation
    
    
    (28.8
    )
    
    
    
    
    
    
    
    
    
    
    (28.8
    )Cost of sales (excluding depreciation and amortisation)
    
    
    (164.6
    )
    
    
    
    
    
    
    
    
    
    
    (164.6
    )Mine operating earnings
    
    
    70.6
    
    
    
    
    
    
    
    
    
    
    
    70.6Corporate expense
    
    
    (1.9
    )
    
    
    
    
    
    
    
    
    
    
    (1.9
    )Project studies
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exploration expense
    
    
    (6.0
    )
    
    
    
    
    
    
    
    
    
    
    (6.0
    )Operating profit / (loss)
    
    
    62.7
    
    
    
    
    
    
    
    
    
    
    
    62.7Hedging loss
    
    
    (44.1
    )
    
    
    
    
    
    
    
    
    
    
    (44.1
    )Other income and expenses
    
    
    (2.5
    )
    
    
    
    
    
    
    
    
    
    
    (2.5
    )Net finance costs
    
    
    (0.4
    )
    
    
    
    
    
    
    
    
    
    
    (0.4
    )Profit / (loss) before income tax
    
    
    15.7
    
    
    
    
    
    
    
    
    
    
    
    15.7Income tax expense
    
    
    5.9
    
    
    
    
    
    
    
    
    
    
    
    5.9Net profit / (loss) after tax
    
    
    9.8
    
    
    
    
    
    
    
    
    
    
    
    9.8
 - F - 23 -




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 TotalPapua New
    
    
    
    
    
    
    
    
    
    
    ConsolidatedGuinea
    
    
       Australia
    
    
 Unallocated
    
    



    Entity$m
    
    
    $m
    
    
    $m
    
    
    $mAs at 31 December 2007Assets and liabilitiesSegment assets
    
    
    1,578.6
    
    
    
    492.4
    
    
    
    234.6
    
    
    
    2,305.6Segment liabilities
    
    
    (79.2
    )
    
    
    (11.6
    )
    
    
    (53.7
    )
    
    
    (144.5
    )As at 31 December 2006Assets and liabilitiesSegment assets
    
    
    1,292.7
    
    
    
    33.0
    
    
    
    170.3
    
    
    
    1,496.0Segment liabilities
    
    
    348.6
    
    
    
    
    
    
    
    335.5
    
    
    
    684.1As at 31 December 2005Assets and liabilitiesSegment assets
    
    
    1,319.4
    
    
    
    
    
    
    
    
    
    
    
    1,319.4Segment liabilities
    
    
    535.9
    
    
    
    
    
    
    
    
    
    
    
    535.9
 Major customers
   2007Customer
    
    $m
    
    Segment reporting revenue1
    
    
    86.6
    
    
    Papua New Guinea2
    
    
    55.1
    
    
    Papua New Guinea3
    
    
    52.3
    
    
    Papua New Guinea
 2006Customer
    
    $m
    
    Segment reporting revenue1
    
    
    54.1
    
    
    Papua New Guinea2
    
    
    50.7
    
    
    Papua New Guinea3
    
    
    43.5
    
    
    Papua New Guinea4
    
    
    42.2
    
    
    Papua New Guinea5
    
    
    42.2
    
    
    Papua New Guinea6
    
    
    38.5
    
    
    Papua New Guinea
 2005Customer
    
    $m
    
    Segment reporting revenue1
    
    
    49.3
    
    
    Papua New Guinea2
    
    
    44.5
    
    
    Papua New Guinea3
    
    
    36.3
    
    
    Papua New Guinea4
    
    
    30.3
    
    
    Papua New Guinea
 - F -24 -




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 NOTE 7: REVENUE
 $m2007
    
    
    2006
    
    
    2005Gold sales
    
    
    493.1
    
    
    
    384.4
    
    
    
    264.0Other revenue
    
    
    5.3
    
    
    
    1.6
    
    
    
    498.4
    
    
    
    386.0
    
    
    
    264.0
 NOTE 8: EMPLOYEE EXPENSES
 $m2007
    
    
    2006
    
    
    2005Equity settled share-based payment compensation
    
    
    2.9
    
    
    
    0.5
    
    
    
    Other personnel expenses
    
    
    66.0
    
    
    
    41.2
    
    
    
    33.568.9
    
    
    
    41.7
    
    
    
    33.5
 NOTE 9: COST OF SALES
 CONSOLIDATED ENTITY$m2007
    
    
    2006
    
    
    2005Operating costs
    
    
    (305.4
    )
    
    
    (238.5
    )
    
    
    (217.9
    )Royalties, levies & production taxes
    
    
    (13.2
    )
    
    
    (9.4
    )
    
    
    (4.8
    )Refining costs
    
    
    (0.5
    )
    
    
    (0.3
    )
    
    
    (0.7
    )Depreciation & amortisation
    
    
    (50.4
    )
    
    
    (37.3
    )
    
    
    (35.7
    )Deferred mining costs
    
    
    70.0
    
    
    
    56.3
    
    
    
    25.0Change in inventories
    
    
    41.2
    
    
    
    19.4
    
    
    
    39.2Inventory write-off: Economic grade stockpile
    
    
    
    
    
    
    
    
    
    
    (2.9
    )Foreign exchange loss
    
    
    (3.0
    )
    
    
    (1.2
    )
    
    
    1.4(261.3
    )
    
    
    (211.0
    )
    
    
    (196.4
    )
 NOTE10: HEDGING LOSS
 $m2007
    
    
    2006
    
    
    2005Cash hedging loss
    
    
    (21.4
    )
    
    
    (61.2
    )
    
    
    (30.6
    )Non-cash hedging loss on hedge restructure
reclassified from equity
    
    
    (75.8
    )
    
    
    (17.1
    )
    
    
    (13.5
    )(97.2
    )
    
    
    (78.3
    )
    
    
    (44.1
    )
 
 Refer to accounting policy Note 1 (xviii) hedge book restructure for a description of non-cash
hedging losses. NOTE 11: OTHER EXPENSES
 $m2007
    
    
    2006
    
    
    2005Property, plant and equipment disposal loss
    
    
    (13.8
    )
    
    
    
    
    
    
    (2.5
    )(13.8
    )
    
    
    
    
    
    
    (2.5
    )
 - F -25 -




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 NOTE 12: FINANCIAL INCOME AND EXPENSES
 $m2007
    
    
    2006
    
    
    2005Financial incomeInterest income
    
    
    9.7
    
    
    
    1.4
    
    
    
    1.2Gold lease rate fees
    
    
    0.3
    
    
    
    2.8
    
    
    
    5.0Other income
    
    
    0.9
    
    
    
    
    
    
    
    10.9
    
    
    
    4.2
    
    
    
    6.2Financial expensesLoss on repayment of gold loan
    
    
    (117.9
    )
    
    
    
    
    
    
    Foreign exchange loss *
    
    
    (5.8
    )
    
    
    
    
    
    
    Interest expense on debt facilities
    
    
    (4.8
    )
    
    
    (1.5
    )
    
    
    (0.4
    )Other interest & financing
    
    
    (3.1
    )
    
    
    (4.7
    )
    
    
    (3.2
    )(131.6
    )
    
    
    (6.2
    )
    
    
    (3.6
    )
 
 *
    
    Represents realised foreign exchange movements arising from receiving funds from the capital
raising in A$ transaction, the purchase cost of gold for the close out of the hedge book as well as
settling other foreign denominated application of funds, including the repayment of debt facilities
and investment in subsidiary. - F -26 -




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 NOTE 13: INCOME TAX
  $m2007
    
    
    2006
    
    
    2005Income Tax ExpenseCurrent tax
    
    
    
    
    
    
    0.3
    
    
    
    1.3
    
    
    
    0.3
    
    
    
    1.3Deferred tax
    
    
    (11.9
    )
    
    
    23.3
    
    
    
    4.6Under / (over) provided in prior years
    
    
    0.2
    
    
    
    (1.5
    )
    
    
    (11.7
    )
    
    
    21.8
    
    
    
    4.6Total income tax expense
    
    
    (11.7
    )
    
    
    22.1
    
    
    
    5.9Numerical reconciliation of income tax expense to
prima facie tax payableProfit / (loss) before tax
    
    
    (35.8
    )
    
    
    75.9
    
    
    
    15.7Prima facie income tax expense on before tax profit
at 30%
    
    
    (10.7
    )
    
    
    22.8
    
    
    
    4.7Tax effect of amounts which are not deductible
(taxable) in calculating taxable income- Expenses not deductible / (income not taxable) for
tax purposes
    
    
    (0.8
    )
    
    
    0.9
    
    
    
    - Recognition of tax losses not previously recognised
    
    
    (0.2
    )
    
    
    
    
    
    
    - Section 72A double deductions
    
    
    (0.2
    )
    
    
    (0.1
    )
    
    
    (0.1
    )(11.9
    )
    
    
    23.6
    
    
    
    4.6Adjustment for current tax of prior periodsUnder / (over) provided in prior years
    
    
    0.2
    
    
    
    (1.5
    )
    
    
    1.3Tax expense / (benefit)
    
    
    (11.7
    )
    
    
    22.1
    
    
    
    5.9Deferred Income TaxDeferred tax assets:
    
    
    230.2
    
    
    
    175.0Deferred tax liabilities:
    
    
    (188.9
    )
    
    
    (88.8
    )41.3
    
    
    
    86.2Balance at beginning of year
    
    
    86.2
    
    
    
    87.7Credited / (charged) to the statement of
comprehensive income
    
    
    11.7
    
    
    
    (21.8
    )Acquired on business combination
    
    
    (47.3
    )
    
    
    Translation adjustments
    
    
    (4.6
    )
    
    
    Tax charged to equity
    
    
    (4.7
    )
    
    
    20.3Balance at end of year
    
    
    41.3
    
    
    
    86.2Deferred tax asset  PNG
    
    
    92.1
    
    
    
    86.2Deferred tax liability  Australia
    
    
    (50.8
    )
    
    
    
  - F -27 -




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 Movements in deferred tax assets and deferred tax liabilities:
 Consolidated Entity
 Acceleratedtax
    
    
    Provisions
    
    
    
    
    
    
    Tax

    
    
    MiningDeferred tax assets:
    
    depreciation
    
    
    of assets
    
    
    Derivatives
    
    
    losses
    
    
    tenements
    
    
     Other*
    
    
    TotalAt 1 January 2006
    
    
    
    
    
    
    6.1
    
    
    
    79.0
    
    
    
    65.6
    
    
    
    
    
    
    
    0.5
    
    
    
    151.2Credited / (charged) to
the statement of
comprehensive income
    
    
    
    
    
    
    2.8
    
    
    
    0.5
    
    
    
    0.2
    
    
    
    
    
    
    
    (0.1
    )
    
    
    3.4Credited / (charged) to
equity
    
    
    
    
    
    
    
    
    
    
    20.3
    
    
    
    0.1
    
    
    
    
    
    
    
    
    
    
    
    20.4At 1 January 2007
    
    
    
    
    
    
    8.9
    
    
    
    99.8
    
    
    
    65.9
    
    
    
    
    
    
    
    0.4
    
    
    
    175.0Credited / (charged) to
the statement of
comprehensive income
    
    
    
    
    
    
    3.1
    
    
    
    (0.3
    )
    
    
    32.4
    
    
    
    
    
    
    
    1.8
    
    
    
    37.0Acquired on business
combination
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20.8
    
    
    
    
    
    
    
    2.3
    
    
    
    23.1Credited / (charged) to
equity
    
    
    
    
    
    
    
    
    
    
    (99.5
    )
    
    
    95.0
    
    
    
    
    
    
    
    (0.4
    )
    
    
    (4.9
    )At 31 December 2007
    
    
    
    
    
    
    12.0
    
    
    
    
    
    
    
    214.1
    
    
    
    
    
    
    
    4.1
    
    
    
    230.2
 Acceleratedtax
    
    
    Consumable
    
    
    Deferred
    
    
    Prepaid

    
    
    MiningDeferred tax liabilities:
    
    depreciation
    
    
    stores
    
    
    mining
    
    
    insurance
    
    
    tenements
    
    
     Other*
    
    
    TotalAt 1 January 2006
    
    
    (31.0
    )
    
    
    (4.8
    )
    
    
    (27.6
    )
    
    
    (0.1
    )
    
    
    
    
    
    
    
    
    
    
    (63.5
    )Credited / (charged) to
the statement of
comprehensive income
    
    
    (9.8
    )
    
    
    0.6
    
    
    
    (16.9
    )
    
    
    (0.1
    )
    
    
    
    
    
    
    1.1
    
    
    
    (25.1
    )Credited / (charged) to
equity
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.1
    )
    
    
    (0.1
    )At 1 January 2007
    
    
    (40.8
    )
    
    
    (4.2
    )
    
    
    (44.5
    )
    
    
    (0.2
    )
    
    
    
    
    
    
    1.0
    
    
    
    (88.7
    )Charged/(credited) to the
statement of
comprehensive income
    
    
    0.5
    
    
    
    (2.2
    )
    
    
    (21.5
    )
    
    
    (0.6
    )
    
    
    
    
    
    
    (1.5
    )
    
    
    (25.3
    )Acquired on business
combination
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (68.1
    )
    
    
    (7.0
    )
    
    
    (75.1
    )(Credited)/charged to
equity
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.2
    
    
    
    0.2At 31 December 2007
    
    
    (40.3
    )
    
    
    (6.4
    )
    
    
    (66.0
    )
    
    
    (0.8
    )
    
    
    (68.1
    )
    
    
    (7.3
    )
    
    
    (188.9
    )
 
 *
    
    Other includes share-based payments  Income tax on other comprehensive income
 $mBefore
    
    
    Tax2007
    
    tax
    
    
    effect
    
    
    Net of taxExchange difference on translation of foreign
operations
    
    
    42.6
    
    
    
    
    
    
    
    42.6Deferred loss on cash flow hedges
    
    
    38.7
    
    
    
    (4.5)
    *
    
    
    34.2Share based payments
    
    
    2.9
    
    
    
    0.2
    
    
    
    3.1Net change in fair value of available for sale financial
assets
    
    
    1.2
    
    
    
    (0.4
    )
    
    
    0.8Other comprehensive income
    
    
    85.4
    
    
    
    (4.7
    )
    
    
    80.7
 
 *
    
    Includes $7.2 million
adjustment for an unrecognised
tax benefit on the previously
restructured hedge book - F -28 -




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 $mBefore
    
    
    Tax2006
    
    tax
    
    
    effect
    
    
     Net of taxDeferred loss on cash flow hedges
    
    
    (50.8
    )
    
    
    20.4
    
    
    
    (30.4
    )Share based payments
    
    
    5.5
    
    
    
    (0.1
    )
    
    
    5.4Other comprehensive income
    
    
    (45.3
    )
    
    
    20.3
    
    
    
    (25.0
    )
 $mBefore
    
    
    Tax2005
    
    tax
    
    
    effect
    
    
  Net of taxDeferred loss on cash flow hedges
    
    
    (72.4
    )
    
    
    8.9
    
    
    
    (63.5
    )Other comprehensive income
    
    
    (72.4
    )
    
    
    8.9
    
    
    
    (63.5
    )
 - F -29 -




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 NOTE 14: CASH AND CASH EQUIVALENTS
 $m2007
    
    
    2006
    
    
    2005Cash at bank and on hand
    
    
    44.7
    
    
    
    21.4
    
    
    
    2.6Short term deposits with financial institutions
    
    
    129.5
    
    
    
    25.6
    
    
    
    125.2174.2
    
    
    
    47.0
    
    
    
    127.8
    NOTE 15: NOTE TO STATEMENTS OF CASH FLOWS
 $m2007
    
    
    2006
    
    
    2005Reconciliation of cash flow from operating activities to
operating profit after taxNet profit / (loss) after tax
    
    
    (24.1
    )
    
    
    53.8
    
    
    
    9.8Add back non-cash items:Depreciation and amortisation
    
    
    50.4
    
    
    
    37.3
    
    
    
    35.8Fair value losses
    
    
    0.4
    
    
    
    1.7
    
    
    
    5.4Amortisation of deferred hedging costs (net)
    
    
    
    
    
    
    17.1
    
    
    
    13.5Provision for doubtful debts
    
    
    1.3
    
    
    
    0.4
    
    
    
    0.4Non-cash hedging loss
    
    
    75.4
    
    
    
    
    
    
    
    Other non-cash income
    
    
    (0.7
    )
    
    
    
    
    
    
    Share based payment expenses
    
    
    2.9
    
    
    
    0.6
    
    
    
    Hedge book restructure payments and receipts:Purchase of gold to close out hedge book
    
    
    (648.4
    )
    
    
    
    
    
    
    Receipts on close out of hedge book
    
    
    279.9
    
    
    
    
    
    
    
    Hedge book restructure & fees
    
    
    
    
    
    
    
    
    
    
    (62.2
    )Add back items presented in investing or financing
(Profit)/loss on disposal of assets
    
    
    13.8
    
    
    
    
    
    
    
    2.5Interest income
    
    
    (9.7
    )
    
    
    (1.4
    )
    
    
    (1.8
    )Interest and financing costs
    
    
    117.9
    
    
    
    
    
    
    
    Change in operating assets and liabilities net of
purchase of subsidiary:(Increase)/decrease in debtors and prepayments
    
    
    (6.0
    )
    
    
    0.1
    
    
    
    0.7(Increase)/decrease in inventories
    
    
    (54.3
    )
    
    
    (19.8
    )
    
    
    (46.8
    )(Increase)/decrease in deferred mining costs
    
    
    (70.0
    )
    
    
    (56.3
    )
    
    
    (25.1
    )Increase/(decrease) in payables
    
    
    12.7
    
    
    
    (0.7
    )
    
    
    5.0Increase/(decrease) in provisions
    
    
    7.1
    
    
    
    2.9
    
    
    
    2.4Increase/(decrease) in provision for income taxes
payable
    
    
    (0.3
    )
    
    
    0.3
    
    
    
    1.3Increase/(decrease) in provision for deferred
income tax
    
    
    (18.3
    )
    
    
    21.3
    
    
    
    4.6Net cash flow from operating activities
    
    
    (270.0
    )
    
    
    57.3
    
    
    
    (54.5
    )
 -F-30-




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 NOTE 16: RECEIVABLES
 $m2007
    
    
    2006CURRENTOther amounts receivable from third parties
    
    
    19.1
    
    
    
    7.5Less: Provision for doubtful debts
    
    
    (4.2
    )
    
    
    (2.9
    )Other debtors  related parties
    
    
    
    
    
    
    14.9
    
    
    
    4.6NON-CURRENTOther debtors  related parties
    
    
    
    
    
    
    Other amounts receivable from third parties
    
    
    0.4
    
    
    
    0.50.4
    
    
    
    0.5
 NOTE 17: INVENTORIES
 $m2007
    
    
    2006CURRENTStores at net realisable value
    
    
    55.8
    
    
    
    41.5Ore stockpiles*
    
    
    39.9
    
    
    
    26.9Gold in circuit
    
    
    3.9
    
    
    
    2.1Finished goods
    
    
    3.2
    
    
    
    4.8102.8
    
    
    
    75.3
 $m2007
    
    
    2006NON-CURRENTOre stockpiles*
    
    
    169.1
    
    
    
    141.7169.1
    
    
    
    141.7
 
 *
    
    With effect from the start of the year a higher proportion of site general and administrative
costs are now included in the valuation of inventory. -F-31-




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 NOTE 18: FINANCIAL INSTRUMENTS AND RISK
 Market risk
 Foreign exchange risk
   Foreign exchange risk-10%Carrying
    
    
    
    
    
    
    
    
    
    
    +10%amount
    
    
    Equity
    
    
    Profit
    
    
    Equity
    
    
    Profit31 December 2007
    
    $m
    
    
    $m
    
    
    $m
    
    
    $m
    
    
    $mCash & Cash
Equivalents
    
    
    174.2
    
    
    
    (6.6
    )
    
    
    (6.6
    )
    
    
    6.6
    
    
    
    6.6Total increase/
(decrease)
    
    
    
    
    
    
    (6.6
    )
    
    
    (6.6
    )
    
    
    6.6
    
    
    
    6.6
 Price risk
       Total gross pre-tax
    
    
    Total tax effect
    
    
    Total net post-taxDesignation Year
    
    $m
    
    
    $m
    
    
    $m2008
    
    
    76.7
    
    
    
    (23.0
    )
    
    
    53.72009
    
    
    102.3
    
    
    
    (30.7
    )
    
    
    71.62010
    
    
    81.9
    
    
    
    (24.6
    )
    
    
    57.32011
    
    
    44.2
    
    
    
    (13.2
    )
    
    
    31.02012
    
    
    5.8
    
    
    
    (1.7
    )
    
    
    4.12013
    
    
    6.0
    
    
    
    (1.8
    )
    
    
    4.2316.9
    
    
    
    (95.0
    )
    
    
    221.9
  -F-32-




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
  $mDerivative financial instruments
    
    2007
    
    
    2006
    
    
    2005Current assets- Forward contracts
    
    
    
    
    
    
    0.3
    
    
    
    0.5
    
    
    
    0.3
    
    
    
    0.5Non-current assets- Forward contracts
    
    
    
    
    
    
    2.4
    
    
    
    4.2
    
    
    
    2.4
    
    
    
    4.2Current liabilities- Forward contracts
    
    
    
    
    
    
    36.0
    
    
    
    36.5- Calls options sold
    
    
    
    
    
    
    25.5
    
    
    
    4.3
    
    
    
    61.5
    
    
    
    40.8Non-current liabilities- Forward contracts
    
    
    
    
    
    
    251.8
    
    
    
    192.2- Call options sold
    
    
    
    
    
    
    22.2
    
    
    
    34.9
    
    
    
    274.0
    
    
    
    227.1
  Interest rate risk
   Interest rate risk-50 bpsCarrying
    
    
    
    
    
    
    
    
    
    
    +50 bpsamount
    
    
    Profit
    
    
    Equity
    
    
    Profit
    
    
    Equity31 December 2007
    
    $m
    
    
    $m
    
    
    $m
    
    
    $m
    
    
    $mCash & cash
equivalents
    
    
    174.2
    
    
    
    (0.6
    )
    
    
    (0.6
    )
    
    
    0.6
    
    
    
    0.6Total increase/
(decrease)
    
    
    
    
    
    
    (0.6
    )
    
    
    (0.6
    )
    
    
    0.6
    
    
    
    0.6
 Liquidity risk
  $m2007
    
    
    2006
    
    
    2005Gold loans
    
    
    
    
    
    
    215.5
    
    
    
    215.5Bank loans
    
    
    
    
    
    
    62.5
    
    
    
    Finance lease liabilities
    
    
    1.0
    
    
    
    
    
    
    
    
  Less than 1
    
    
    Between 1 &
    
    
    Between 2 &year
    
    
    2 years
    
    
    5 years
    
    
    Over 5 yearsConsolidated entity at 31 December 2007Trade and other payables
    
    
    64.0
    
    
    
    
    
    
    
    
    
    
    
    Finance lease liabilities
    
    
    0.3
    
    
    
    0.4
    
    
    
    0.3
    
    
    
    
 -F-33-




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 Less than 1
    
    
    Between 1 &
    
    
    Between 2 &year
    
    
    2 years
    
    
    5 years
    
    
    Over 5 yearsConsolidated Entity at 31 December 2006Borrowings
    
    
    62.5
    
    
    
    44.9
    
    
    
    173.7
    
    
    
    Derivative financial instruments (net)
    
    
    61.2
    
    
    
    46.0
    
    
    
    207.7
    
    
    
    17.9Trade and other payables
    
    
    46.6
    
    
    
    
    
    
    
    
    
    
    
    
   $mLess than 1
    
    
    Between 1 &
    
    
    Between 2 &
    
    
    Over 5year
    
    
    2 years
    
    
    5 years
    
    
    yearsConsolidated Entity at 31 December 2006Fixed forward contracts  cash flow hedges: outflow
    
    
    36.0
    
    
    
    48.0
    
    
    
    200.0
    
    
    
    Call options contracts  cash flow hedges: outflow
    
    
    25.5
    
    
    
    
    
    
    
    4.3
    
    
    
    17.9Gold lease rate swap contracts  cash flow hedges: outflow
    
    
    
    
    
    
    0.4
    
    
    
    3.4
    
    
    
     inflow
    
    
    (0.3
    )
    
    
    (2.4
    )
    
    
    
    
    
    
    Total derivatives
    
    
    61.2
    
    
    
    46.0
    
    
    
    207.7
    
    
    
    17.9
 Credit risk
  
    
    has a policy for establishing credit limits for the entities dealt with;
    
    may require collateral where appropriate; and
    
    monitors the overall financial strength of customers through publicly available credit
information.
  Fair values
  2007
    
    
    2006$m
    
    
    $mCarrying
    
    
    
    
    
    
    Carryingamount
    
    
    Fair value
    
    
    amount
    
    
    Fair valueAvailable for salefinancial assets
    
    
    2.5
    
    
    
    2.5
    
    
    
    33.0
    
    
    
    33.0Receivables
    
    
    15.3
    
    
    
    15.3
    
    
    
    5.1
    
    
    
    5.1Cash and cash
equivalents
    
    
    174.2
    
    
    
    174.2
    
    
    
    47.0
    
    
    
    47.0Derivative financial
instruments-Assets
    
    
    
    
    
    
    
    
    
    
    2.7
    
    
    
    2.7-Liabilities
    
    
    
    
    
    
    
    
    
    
    (335.5
    )
    
    
    (335.5
    )Finance lease liabilities
    
    
    (1.0
    )
    
    
    (1.0
    )
    
    
    
    
    
    
    Accounts payable
    
    
    (64.0
    )
    
    
    (64.0
    )
    
    
    (46.6
    )
    
    
    (46.6
    )Bank loans
    
    
    
    
    
    
    
    
    
    
    (65.6
    )
    
    
    (65.6
    )Gold loans
    
    
    
    
    
    
    
    
    
    
    (215.5
    )
    
    
    (304.5
    )
    -F-34-




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
   -F-35-




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 NOTE 19: DEFERRED MINING COSTS
 2007
    
    
    2006NON-CURRENTDeferred mining costs
    
    
    218.3
    
    
    
    148.3218.3
    
    
    
    148.3
 Movements:
 2007
    
    
    2006Carrying amount at start of year
    
    
    148.3
    
    
    
    92.0- Cash overburden costs attributable to current year
mining activity
    
    
    (49.7
    )
    
    
    (42.2
    )- Non-cash overburden costs attributable to current
year mining activity
    
    
    (10.5
    )
    
    
    (5.7
    )- Total cash costs of material mined during the period
(cash)
    
    
    110.8
    
    
    
    91.9- Total non-cash costs of material mined during the
period
    
    
    19.4
    
    
    
    12.3Carrying amount at end of year
    
    
    218.3
    
    
    
    148.3
  -F-36-




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 NOTE 20: PROPERTY PLANT AND EQUIPMENT
 $m2007
    
    
    2006LAND AND BUILDINGSCost brought forward
    
    
    
    
    
    
    118.8
    
    
    
    117.7Transfers from capital works in progress
    
    
    
    
    
    
    5.8
    
    
    
    1.1Assets acquired through business combination
    
    
    28
    
    
    
    1.0
    
    
    
    Translation adjustments
    
    
    
    
    
    
    0.1
    
    
    
    Cost carried forward
    
    
    
    
    
    
    125.7
    
    
    
    118.8Depreciation brought forward
    
    
    
    
    
    
    (28.3
    )
    
    
    (25.3
    )Charge for the year
    
    
    
    
    
    
    (3.3
    )
    
    
    (3.0
    )Depreciation carried forward
    
    
    
    
    
    
    (31.6
    )
    
    
    (28.3
    )Net book value
    
    
    
    
    
    
    94.1
    
    
    
    90.5PLANT AND EQUIPMENTCost brought forward
    
    
    
    
    
    
    701.2
    
    
    
    670.0Additions
    
    
    
    
    
    
    6.2
    
    
    
    7.0Transfers from capital works in progress
    
    
    
    
    
    
    278.9
    
    
    
    26.7Assets acquired through business combination
    
    
    28
    
    
    
    2.6
    
    
    
    Translation adjustments
    
    
    
    
    
    
    0.3
    
    
    
    Reclassification
    
    
    
    
    
    
    (5.2
    )
    
    
    Disposals / transfers
    
    
    
    
    
    
    (18.1
    )
    
    
    (2.5
    )Cost carried forward
    
    
    
    
    
    
    965.9
    
    
    
    701.2Depreciation brought forward
    
    
    
    
    
    
    (247.5
    )
    
    
    (225.6
    )Charge for the year
    
    
    
    
    
    
    (38.3
    )
    
    
    (24.4
    )Reclassification
    
    
    
    
    
    
    0.2
    
    
    
    Disposals / transfers
    
    
    
    
    
    
    2.6
    
    
    
    2.5Depreciation carried forward
    
    
    
    
    
    
    (283.0
    )
    
    
    (247.5
    )Net book value
    
    
    
    
    
    
    682.9
    
    
    
    453.7DEFERRED DEVELOPMENTCost brought forward
    
    
    
    
    
    
    290.9
    
    
    
    277.4Additions
    
    
    
    
    
    
    41.6
    
    
    
    Transfers from capital works in progress
    
    
    
    
    
    
    10.3
    
    
    
    14.7Assets acquired through business combination
    
    
    
    
    
    
    
    
    
    
    Translation adjustments
    
    
    
    
    
    
    
    
    
    
    Disposals
    
    
    
    
    
    
    
    
    
    
    (1.2
    )Cost carried forward
    
    
    
    
    
    
    342.8
    
    
    
    290.9Depreciation brought forward
    
    
    
    
    
    
    (93.2
    )
    
    
    (84.6
    )Charge for the year
    
    
    
    
    
    
    (8.1
    )
    
    
    (9.8
    )Disposals
    
    
    
    
    
    
    
    
    
    
    1.2Depreciation carried forward
    
    
    
    
    
    
    (101.3
    )
    
    
    (93.2
    )Net book value
    
    
    
    
    
    
    241.5
    
    
    
    197.7DEVELOPMENT PROPERTIESCost brought forward
    
    
    
    
    
    
    
    
    
    
    Additions
    
    
    
    
    
    
    
    
    
    
    
 -F-37-




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 $m2007
    
    
    2006Transfers from capital works in progress
    
    
    
    
    
    
    
    
    
    
    Assets acquired through business combination
    
    
    28
    
    
    
    272.6
    
    
    
    Translation adjustments
    
    
    
    
    
    
    29.4
    
    
    
    Disposals
    
    
    
    
    
    
    
    
    
    
    Cost carried forward
    
    
    
    
    
    
    302.0
    
    
    
    Depreciation brought forward
    
    
    
    
    
    
    
    
    
    
    Charge for the year
    
    
    
    
    
    
    
    
    
    
    Disposals
    
    
    
    
    
    
    
    
    
    
    Depreciation carried forward
    
    
    
    
    
    
    
    
    
    
    Net book value
    
    
    
    
    
    
    302.0
    
    
    
    CAPITAL WORKS IN PROGRESSCost brought forward
    
    
    
    
    
    
    205.0
    
    
    
    66.9Additions
    
    
    
    
    
    
    171.5
    
    
    
    180.7Transfers
    
    
    
    
    
    
    (295.0
    )
    
    
    (42.6
    )Assets acquired through business combination
    
    
    28
    
    
    
    23.6
    
    
    
    Translation adjustments
    
    
    
    
    
    
    2.6
    
    
    
    Costs carried forward
    
    
    
    
    
    
    107.7
    
    
    
    205.0REHABILITATIONCost brought forward
    
    
    
    
    
    
    6.8
    
    
    
    6.2Additions / (deductions)
    
    
    
    
    
    
    (1.6
    )
    
    
    0.6Cost carried forward
    
    
    
    
    
    
    5.2
    
    
    
    6.8Amortisation brought forward
    
    
    
    
    
    
    (2.5
    )
    
    
    (2.4
    )Charge for the year
    
    
    
    
    
    
    (0.2
    )
    
    
    (0.1
    )Amortisation carried forward
    
    
    
    
    
    
    (2.7
    )
    
    
    (2.5
    )Net book value
    
    
    
    
    
    
    2.5
    
    
    
    4.3Total property, plant & equipment
    
    
    
    
    
    
    1,430.6
    
    
    
    951.2
   - F -38 -




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 NOTE 21: INTANGIBLE ASSETS
 $ m2007
    
    
    2006MINING INFORMATIONAcquired through business combination
    
    
    28
    
    
    
    44.5
    
    
    
    Translation adjustments
    
    
    
    
    
    
    4.7
    
    
    
    Cost carried forward
    
    
    
    
    
    
    49.2
    
    
    
    Closing net book value
    
    
    
    
    
    
    49.2
    
    
    
    EXPLORATION RIGHTSAcquired through business combination
    
    
    28
    
    
    
    1.7
    
    
    
    Translation adjustments
    
    
    
    
    
    
    0.2
    
    
    
    Cost carried forward
    
    
    
    
    
    
    1.9
    
    
    
    Closing net book value
    
    
    
    
    
    
    1.9
    
    
    
    LICENSESAcquired through business combination
    
    
    28
    
    
    
    0.1
    
    
    
    Cost carried forward
    
    
    
    
    
    
    0.1
    
    
    
    Charge for the year (1)
    
    
    
    
    
    
    0.0
    
    
    
    Amortisation carried forward
    
    
    
    
    
    
    0.0
    
    
    
    Closing net book value
    
    
    
    
    
    
    0.1
    
    
    
    GOODWILLAcquired through business combination
    
    
    28
    
    
    
    36.3
    
    
    
    Translation adjustments
    
    
    
    
    
    
    3.9Cost carried forward
    
    
    
    
    
    
    40.2
    
    
    
    Charge for the year
    
    
    
    
    
    
    
    
    
    
    Amortisation carried forward
    
    
    
    
    
    
    
    
    
    
    Closing net book value
    
    
    
    
    
    
    40.2
    
    
    
    OTHER INTANGIBLE ASSETSCosts reclassified (2)
    
    
    
    
    
    
    5.2
    
    
    
    Additions
    
    
    
    
    
    
    2.5
    
    
    
    Cost carried forward
    
    
    
    
    
    
    7.7
    
    
    
    Amortisation reclassified (2)
    
    
    
    
    
    
    0.2
    
    
    
    Charge for the year (1)
    
    
    
    
    
    
    0.5
    
    
    
    Amortisation carried forward
    
    
    
    
    
    
    0.7
    
    
    
    Closing net book value
    
    
    
    
    
    
    7.0
    
    
    
    Total intangible assets
    
    
    
    
    
    
    98.4
    
    
    
    
 - F -39 -




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 (1)
    
    Amortisation of $0.5 million is included in depreciation and amortisation expense in
the statement of comprehensive income(2)
    
    Landowner share based payments have been reclassified as an intangible asset.
   - F -40 -




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 NOTE 22: AVAILABLE-FOR-SALE FINANCIAL ASSETS
   $m2007
    
    
    2006At beginning of year
    
    
    33.0
    
    
    
    Additions
    
    
    1.3
    
    
    
    33.0De-classification on business combination
    
    
    (33.0
    )
    
    
    Revaluation surplus/(deficit) transfer to
Equity
    
    
    1.2
    
    
    
    At end of year
    
    
    2.5
    
    
    
    33.0
 $ m2007
    
    
    2006Listed securities:Equity securities
    
    
    2.5
    
    
    
    33.02.5
    
    
    
    33.0
 - F -41 -




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 NOTE 23: ACCOUNTS PAYABLE & ACCRUED LIABILITIES
 $m2007
    
    
    2006CURRENTTrade creditors and accruals
    
    
    64.0
    
    
    
    46.2Amounts payable to related parties
    
    
    
    
    
    
    Other payables
    
    
    
    
    
    
    0.464.0
    
    
    
    46.6
 - F -42 -




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 NOTE 24: PROVISIONS
 $m2007
    
    
    2006CURRENTEmployee provisions
    
    
    13.5
    
    
    
    6.413.5
    
    
    
    6.4NON CURRENTEmployee provisions
    
    
    3.1
    
    
    
    3.1Other provisions
    
    
    1.4
    
    
    
    Rehabilitation provision
    
    
    10.7
    
    
    
    11.115.2
    
    
    
    14.2
  $m2007
    
    
    2006Employee provisions currentAnnual leave
    
    
    5.4
    
    
    
    2.9Sick leave
    
    
    1.0
    
    
    
    0.6Service bonus
    
    
    3.7
    
    
    
    1.3Short term incentives
    
    
    2.1
    
    
    
    1.2Long service leave current
    
    
    1.3
    
    
    
    0.413.5
    
    
    
    6.4
    $m2007
    
    
    2006Employee provisions non-currentLong service leave
    
    
    3.1
    
    
    
    2.1Service bonus
    
    
    
    
    
    
    1.03.1
    
    
    
    3.1
  $m2007
    
    
    2006Rehabilitation provisionCarrying amount at start of year
    
    
    11.1
    
    
    
    9.8- additional / (reduction in) provision for changes in
estimated cash outflows
    
    
    (1.7
    )
    
    
    0.4- additional provision due to ground disturbance
    
    
    0.1
    
    
    
    0.2- life of mine variation
    
    
    
    
    
    
    -acquisition of subsidiaries
    
    
    0.5
    
    
    
    - interest charge
    
    
    0.7
    
    
    
    0.7Carrying amount at end of year
    
    
    10.7
    
    
    
    11.1
 - F -43 -




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 NOTE 25: BORROWINGS AND FINANCE FACILITIES
 $m2007
    
    
    2006CURRENTProject financing facility  gold loan
    
    
    
    
    
    
    26.9Ballarat facility
    
    
    
    
    
    
    35.6Finance leases (Note 33)
    
    
    0.3
    
    
    
    0.3
    
    
    
    62.5NON CURRENTProject financing facility  gold loan
    
    
    
    
    
    
    188.6Project financing facility  revolving credit facility
    
    
    
    
    
    
    30.0Finance leases (Note 33)
    
    
    0.7
    
    
    
    0.7
    
    
    
    218.6
 Project financing facility
  Repayment of gold loan
   Repayment of revolving credit facility
  Ballarat Goldfields Facility
  Ballarat
    
    
    
    
    
    RevolvingGoldfields
    
    Gold
    
    Credit2006
    
    Facility
    
    Loan
    
    Facility
    
    TotalRepayment Maturity
    
    $m
    
    $m
    
    $m
    
    $mCurrentLess than one year
    
    
    35.6
    
    
    
    26.9
    
    
    
    
    
    
    
    62.5Non-currentBetween one and two years
    
    
    
    
    
    
    44.9
    
    
    
    
    
    
    
    44.9Between two and three years
    
    
    
    
    
    
    58.4
    
    
    
    
    
    
    
    58.4In excess of three years
    
    
    
    
    
    
    85.3
    
    
    
    30.0
    
    
    
    115.3
    
    
    
    188.6
    
    
    
    30.0
    
    
    
    218.6Total
    
    
    35.6
    
    
    
    215.5
    
    
    
    30.0
    
    
    
    281.1Weighted average interest
rate
    
    
    8.10
    %
    
    
    2.60
    %
    
    
    7.30
    %
    
    
    3.20
    %
 - F -44 -




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 Ballarat
    
    
    
    
    
    RevolvingGoldfields
    
    Gold
    
    Credit2005
    
    Facility
    
    Loan
    
    Facility
    
    TotalRepayment Maturity
    
    $m
    
    $m
    
    $m
    
    $mCurrentLess than one year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Non-currentBetween one and two years
    
    
    
    
    
    
    26.4
    
    
    
    
    
    
    
    26.4Between two and three years
    
    
    
    
    
    
    44.9
    
    
    
    
    
    
    
    58.4In excess of three years
    
    
    
    
    
    
    143.6
    
    
    
    
    
    
    
    143.6
    
    
    
    215.5
    
    
    
    
    
    
    
    215.5Total
    
    
    
    
    
    
    215.5
    
    
    
    
    
    
    
    215.5Weighted average interest
rate
    
    
    
    
    
    
    2.0
    %
    
    
    
    
    
    
    2.0
    %
 - F -45 -




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 NOTE 26: SHARE CAPITAL
 $m2007
    
    
    2006(a) Issued and paid up capitalOrdinary sharesOpening balance
    
    
    1,027.1
    
    
    
    1,027.5New issues  Ballarat acquisition
    
    
    316.5
    
    
    
    New issues  capital raising
    
    
    989.0
    
    
    
    Less: Transaction costs
    
    
    (11.6
    )
    
    
    Shares reclassified as treasury shares
    
    
    (1.3
    )
    
    
    (0.4
    )Closing balance
    
    
    2,319.7
    
    
    
    1,027.1
 Number of shares 0002007
    
    
    2006(b) Issued and paid up capitalOpening balance
    
    
    1,284,049
    
    
    
    1,284,225New issues  capital raising
    
    
    508,277
    
    
    
    New issues  Ballarat acquisition
    
    
    111,996
    
    
    
    Shares reclassified as treasury shares
    
    
    (410
    )
    
    
    (176
    )Closing balance
    
    
    1,903,912
    
    
    
    1,284,049
   PNG Companies Act 1997
 Ballarat acquisition
  Capital raising
  - F -46 -




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 NOTE 27: RESERVES
 US$m2007
    
    
    2006(a) ReservesHedging reserve  cash flow hedges
    
    
    (221.9
    )
    
    
    (256.1
    )Employee Share based payments reserve
    
    
    3.3
    
    
    
    0.2Landowner Share based payments reserve
    
    
    5.2
    
    
    
    5.2Fair value reserve
    
    
    0.8
    
    
    
    Foreign currency translation reserve
    
    
    42.6
    
    
    
    (170.0
    )
    
    
    (250.7
    )Movements:Hedging reserve  cash flow hedgesOpening balance
    
    
    (256.1
    )
    
    
    (225.7
    )Fair value of cash flow hedges
    
    
    (59.1
    )
    
    
    (40.6
    )Call options sold
    
    
    
    
    
    
    (9.4
    )Deferred hedging gains / (losses)
    
    
    97.8
    
    
    
    (0.8
    )Deferred taxation
    
    
    (4.5
    )
    
    
    20.4(221.9
    )
    
    
    (256.1
    )Employee share based payments reserveOpening balance
    
    
    0.2
    
    
    
    Share rights expensed
    
    
    2.9
    
    
    
    0.3Deferred taxation
    
    
    0.2
    
    
    
    (0.1
    )3.3
    
    
    
    0.2Landowners share based payments reserveOpening balance
    
    
    5.2
    
    
    
    Share rights capitalised
    
    
    
    
    
    
    5.25.2
    
    
    
    5.2Fair value reserveOpening balance
    
    
    
    
    
    
    Fair value of available for sale financial assets
    
    
    1.2
    
    
    
    Deferred tax
    
    
    (0.4
    )
    
    
    0.8
    
    
    
    Foreign currency translation reserveOpening balance
    
    
    
    
    
    
    Currency translation differences arising during the
year
    
    
    42.6
    
    
    
    42.6
    
    
    
    (b) Retained ProfitsMovements in retained profits / (losses) were as
follows:Opening balance
    
    
    35.5
    
    
    
    (18.3
    )Net profit for the year
    
    
    (24.1
    )
    
    
    53.811.4
    
    
    
    35.5
 Nature and purpose of reserves
 Available-for-sale investments revaluation reserve
  - F -47 -




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 Hedging reserve  cash flow hedges
  Share-based payments reserve
  
    
    the fair value of options issued to employees
but not exercised
    
    the fair value of shares issued to employees
    
    in the parent entity  the fair value of shares and options issued to employees of
subsidiaries
 Landowner share-based payments reserve
  
    
    the fair value of shares issued to local
landowners
 Foreign currency translation reserve
  - F -48 -




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 NOTE 28: BUSINESS COMBINATION
 (a) Summary of acquisition
      $mPurchase consideration
    
    
    316.5Shares issued
    
    
    33.0Cash paid  prior year
    
    
    3.5Direct costs relating to the acquisition
    
    
    353.0Fair value of net identifiable net assets
    
    
    353.0(b) Reconciliation to cash flow
 2007$mAcquisition of subsidiary net of cash acquired:Cash consideration
    
    
    3.0Less: cash balances acquired
    
    
    (22.6
    )Net outflow/(inflow) of cash
    
    
    (19.6
    )Cash consideration is direct costs relating to the acquisition paid during the period.
 (c) Assets and liabilities acquired
 Acquireescarrying amount
    
    Fair value$m
    
    $mCash and cash equivalents
    
    
    22.6
    
    
    
    22.6Receivables
    
    
    0.7
    
    
    
    0.7Inventory
    
    
    0.4
    
    
    
    0.4Prepayments
    
    
    0.1
    
    
    
    0.1Property, plant and equipment
    
    
    27.2
    
    
    
    27.2Intangible assets
    
    
    1.0
    
    
    
    46.3Development properties
    
    
    
    
    
    
    272.6Deferred tax asset
    
    
    20.8
    
    
    
    20.8Accounts payable
    
    
    (3.9
    )
    
    
    (3.8
    )Goodwill
    
    
    
    
    
    
    36.3Borrowings
    
    
    (1.1
    )
    
    
    (1.1
    )Provisions
    
    
    (0.8
    )
    
    
    (1.0
    )Deferred tax liability
    
    
    (0.2
    )
    
    
    (68.0
    )Net assets
    
    
    66.8
    
    
    
    353.0
 - F -49 -




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 NOTE 29: INVESTMENTS IN SUBSIDIARIES
 Name of subsidiary
    
    % ownership interest
    
    Country of incorporationNiugini Mining Limited
    
    100%
    
    Papua New GuineaNiugini Mining Australia Pty Ltd
    
    100%
    
    AustraliaLihir Management Company Limited
    
    100%
    
    Papua New GuineaLihir Business Development Limited
    
    100%
    
    Papua New GuineaLihir Services Australia Pty Limited
    
    100%
    
    AustraliaLihir Australian Holdings Pty Ltd
    
    100%
    
    AustraliaBallarat Goldfields Pty Ltd
    
    100%
    
    AustraliaNew Resource Pty Ltd
    
    100%
    
    AustraliaBerringa Resources Pty Ltd
    
    100%
    
    AustraliaBallarat West Goldfields Pty Ltd
    
    100%
    
    AustraliaCorpique No. 21 Pty Ltd
    
    100%
    
    Australia
    - F -50 -




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 NOTE 30: KEY MANAGEMENT PERSONNEL
 Directors
  (i)
    
    Chairman  Non-ExecutiveDr Ross Garnaut(ii)
    
    Executive DirectorsMr Arthur Hood, Managing Director(iii)
    
    Non-Executive DirectorsMr Bruce BrookDr Peter CassidyDr Michael Etheridge (appointed 20 March 2007)Mrs Winifred KamitMr Geoff Loudon
 Mr Alister Maitland (appointed 20 March 2007)
 Other key management personnel
  Name
    
    Position
    
    EmployerPhil Baker
    
    Chief Financial Officer
    
    Lihir Services Australia Pty Ltd(from 21 January 2007)Joe Dowling
    
    General Manager Corporate Affairs
    
    Lihir Services Australia Pty LtdMurray Eagle
    
    General Manager External Affairs & Sustainable
    
    Lihir Gold LimitedDevelopmentNoel Foley
    
    Executive General Manager, Operations
    
    Lihir Gold LimitedGraham Folland
    
    General Manager Corporate Development
    
    Lihir Services Australia Pty LtdStuart MacKenzie
    
    Group Secretary and General Counsel
    
    Lihir Services Australia Pty LtdWojciech Ozga
    
    General Manager, Ballarat Operations
    
    Lihir Services Australia Pty Ltd(from 8 March 2007)Ron Yung
    
    General Manager Organisation Performance
    
    Lihir Services Australia Pty LtdRichard Laufmann
    
    Executive General Manager Australian Operations and
    
    Lihir Services Australia Pty LtdBusiness Development(from 8 March 2007 to 8 June 2007)Paul Fulton
    
    Chief Financial Officer
    
    Lihir Services Australia Pty Ltd(from 1 January 2007 to 20 January 2007)
  Name
    
    Position
    
    EmployerPaul Fulton
    
    Chief Financial Officer
    
    Lihir Services Australia Pty LtdJoe Dowling
    
    Manager Investor Relations
    
    Lihir Services Australia Pty LtdMurray Eagle
    
    General Manager External Affairs & Sustainable
    
    Lihir Gold LimitedDevelopmentNoel Foley
    
    Executive General Manager
    
    Lihir Gold Limited(from 13 March 2006)Graham Folland
    
    General Manager Corporate Development
    
    Lihir Services Australia Pty Ltd(from 1 March 2006)Stuart MacKenzie
    
    Group Secretary and General Counsel
    
    Lihir Services Australia Pty Ltd(from 14 August 2006)Ron Yung
    
    General Manager Organisation Performance
    
    Lihir Services Australia Pty Ltd(from 1 July 2006)Jan Anderson
    
    General Manager Operations
    
    Lihir Gold Limited(from 1 January 2006 to 22 February 2006)Mark Laurie
    
    Company Secretary/General Counsel, Manager Corporate &
    
    Lihir Gold LimitedTowns(from 1 January 2006 to 24 November 2006)
 - F - 51 -




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 Key management personnel compensation
 $2007
    
    2006
    
    2005Short-term employee benefits
    
    
    4,884,602
    
    
    
    2,889,353
    
    
    
    2,750,407Post-employment benefits
    
    
    424,112
    
    
    
    178,219
    
    
    
    293,162Termination benefits
    
    
    842,467
    
    
    
    1,106,205
    
    
    
    Long-term benefits
    
    
    25,967
    
    
    
    
    
    
    
    Share-based payments
    
    
    1,920,781
    
    
    
    722,258
    
    
    
    8,097,929
    
    
    
    4,896,035
    
    
    
    3,043,569
 Equity instrument disclosures relating to key management personnel
 Share rights provided as remuneration
  Share right holdings
  Equity settledBalance at
    
    compensatio
    
    Equity settledstart of the
    
    n
    
    compensatio
    
    
    
    
    
    Other
    
    Balance at end
    
    Vested andName
    
    year
    
    (rights issue)
    
    n
    
    Exercised
    
    changes
    
    of the year
    
    exercisable
    
    UnvestedDirectors of Lihir Gold LimitedMr Arthur Hood
    
    
    181,677
    
    
    
    4,061
    
    
    
    1,531,194
    
    
    
    (49,208
    )
    
    
    
    
    
    
    1,667,724
    
    
    
    
    
    
    
    1,667,724Other key management personnel of the Consolidated EntityPhil Baker
    
    
    
    
    
    
    
    
    
    
    251,786
    
    
    
    
    
    
    
    
    
    
    
    251,786
    
    
    
    
    
    
    
    251,786Joe Dowling
    
    
    35,945
    
    
    
    3,072
    
    
    
    160,679
    
    
    
    (37,220
    )
    
    
    (1,797
    )
    
    
    160,679
    
    
    
    
    
    
    
    160,679Murray Eagle
    
    
    54,225
    
    
    
    3,547
    
    
    
    213,977
    
    
    
    (4,634
    )
    
    
    (2,711
    )
    
    
    264,404
    
    
    
    51,514
    
    
    
    212,890Noel Foley
    
    
    47,926
    
    
    
    4,139
    
    
    
    242,342
    
    
    
    (50,148
    )
    
    
    (1,917
    )
    
    
    242,342
    
    
    
    
    
    
    
    242,342Graham Folland
    
    
    41,080
    
    
    
    1,593
    
    
    
    206,297
    
    
    
    (42,984
    )
    
    
    (1,643
    )
    
    
    204,343
    
    
    
    
    
    
    
    204,343Stuart MacKenzie
    
    
    13,734
    
    
    
    4,634
    
    
    
    176,422
    
    
    
    (14,969
    )
    
    
    
    
    
    
    179,821
    
    
    
    
    
    
    
    179,821Wojciech Ozga
    
    
    
    
    
    
    
    
    
    
    165,235
    
    
    
    
    
    
    
    
    
    
    
    165,235
    
    
    
    
    
    
    
    165,235Ron Yung
    
    
    18,885
    
    
    
    1,235
    
    
    
    196,949
    
    
    
    (19,307
    )
    
    
    (1,171
    )
    
    
    196,591
    
    
    
    
    
    
    
    196,591Paul Fulton
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    393,472
    
    
    
    22,281
    
    
    
    3,144,881
    
    
    
    (218,470
    )
    
    
    (9,239
    )
    
    
    3,332,925
    
    
    
    51,514
    
    
    
    3,281,411
 - F 52 -




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 2006
 Balance at
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance at
    
    Vestedstart of the
    
    Granted as
    
    
    
    
    
    Other
    
    end of the
    
    andName
    
    year
    
    compensation
    
    Exercised
    
    changes
    
    year
    
    exercisable
    
    UnvestedDirectors of Lihir Gold LimitedMr Arthur Hood
    
    
    
    
    
    
    362,263
    
    
    
    (176,071
    )
    
    
    (4,515
    )
    
    
    181,677
    
    
    
    
    
    
    
    181,677Other key management personnel of the Consolidated EntityJan Anderson
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Joe Dowling
    
    
    
    
    
    
    35,945
    
    
    
    
    
    
    
    
    
    
    
    35,945
    
    
    
    
    
    
    
    35,945Murray Eagle
    
    
    
    
    
    
    54,225
    
    
    
    
    
    
    
    
    
    
    
    54,225
    
    
    
    
    
    
    
    54,225Noel Foley
    
    
    
    
    
    
    47,926
    
    
    
    
    
    
    
    
    
    
    
    47,926
    
    
    
    
    
    
    
    47,926Graham Folland
    
    
    
    
    
    
    41,080
    
    
    
    
    
    
    
    
    
    
    
    41,080
    
    
    
    
    
    
    
    41,080Paul Fulton
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stuart MacKenzie
    
    
    
    
    
    
    13,734
    
    
    
    
    
    
    
    
    
    
    
    13,734
    
    
    
    
    
    
    
    13,734Ron Yung
    
    
    
    
    
    
    18,885
    
    
    
    
    
    
    
    
    
    
    
    18,885
    
    
    
    
    
    
    
    18,885
    
    
    
    574,058
    
    
    
    (176,071
    )
    
    
    (4,515
    )
    
    
    393,472
    
    
    
    
    
    
    
    393,472
 Share holdings
  2007
 Received duringthe year on theBalance at the
    
    exercise of share
    
    Other changes
    
    Balance at theName
    
    start of the year
    
    rights
    
    during the year
    
    end of the yearDirectors of Lihir Gold LimitedDr Ross Garnaut
    
    
    53,225
    
    
    
    
    
    
    
    48.298
    
    
    
    101,523Mr Arthur Hood
    
    
    228,371
    
    
    
    49,208
    
    
    
    76,125
    
    
    
    353,704Mr Bruce Brook
    
    
    10,000
    
    
    
    
    
    
    
    23,334
    
    
    
    33,334Dr Peter Cassidy
    
    
    33,225
    
    
    
    
    
    
    
    11,076
    
    
    
    44,301Dr Michael Etheridge
    
    
    
    
    
    
    
    
    
    
    61,728
    
    
    
    61,728Mrs Winifred Kamit
    
    
    2,000
    
    
    
    
    
    
    
    667
    
    
    
    2,667Mr Geoff Loudon
    
    
    143,840
    
    
    
    
    
    
    
    
    
    
    
    143,840Mr Alister Maitland
    
    
    
    
    
    
    
    
    
    
    30,864
    
    
    
    30,864Other key management personnel of the Consolidated Entity Ordinary sharesOrdinary sharesPhil Baker
    
    
    
    
    
    
    
    
    
    
    10,000
    
    
    
    10,000Joe Dowling
    
    
    15,000
    
    
    
    37,220
    
    
    
    5,000
    
    
    
    57,220Murray Eagle
    
    
    
    
    
    
    4,634
    
    
    
    
    
    
    
    4,634Noel Foley
    
    
    35,191
    
    
    
    50,148
    
    
    
    11,731
    
    
    
    97,070Graham Folland
    
    
    3,500
    
    
    
    42,984
    
    
    
    1,167
    
    
    
    47,651Stuart MacKenzie
    
    
    
    
    
    
    14,969
    
    
    
    
    
    
    
    14,969Wojciech Ozga
    
    
    
    
    
    
    
    
    
    
    54,000
    
    
    
    54,000Ron Yung
    
    
    2,000
    
    
    
    19,307
    
    
    
    667
    
    
    
    21,974
 - F - 53 -




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 2006
 Received duringthe year on theBalance at the
    
    issuance of share
    
    Other changes
    
    Balance at theName
    
    start of the year
    
    rights
    
    during the year
    
    end of the yearDirectors of Lihir Gold LimitedOrdinary sharesDr Ross Garnaut
    
    
    53,225
    
    
    
    
    
    
    
    
    
    
    
    53,225Mr Arthur Hood
    
    
    
    
    
    
    176,071
    
    
    
    52,300
    
    
    
    228,371Mr Bruce Brook
    
    
    
    
    
    
    
    
    
    
    10,000
    
    
    
    10,000Dr Peter Cassidy
    
    
    33,225
    
    
    
    
    
    
    
    
    
    
    
    33,225Mrs Winifred Kamit
    
    
    2,000
    
    
    
    
    
    
    
    
    
    
    
    2,000Mr Geoff Loudon
    
    
    143,840
    
    
    
    
    
    
    
    
    
    
    
    143,840Mr John OReilly
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other key management personnel of the Consolidated EntityOrdinary sharesJan Anderson (1)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Joe Dowling
    
    
    15,000
    
    
    
    
    
    
    
    
    
    
    
    15,000Murray Eagle
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Noel Foley
    
    
    
    
    
    
    
    
    
    
    35,191
    
    
    
    35,191Graham Folland
    
    
    
    
    
    
    
    
    
    
    3,500
    
    
    
    3,500Paul Fulton (1)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stuart MacKenzie
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Ron Yung
    
    
    
    
    
    
    
    
    
    
    2,000
    
    
    
    2,000
 
 (1)
    
    Employment with Consolidated Entity ceased Loans to key management personnel
  Aggregates for key management personnel
 Interest paid
    
    
    
    
    
    Number inBalance at the
    
    and payable for
    
    Interest not
    
    Balance at the
    
    Consolidatedstart of the year
    
    the year
    
    charged
    
    end of the year
    
    Entity at the endConsolidated Entity
    
    $
    
    $
    
    $
    
    $
    
       of the year2007
    
    
    
    
    
    373
    
    8,769
    
    12006
    
    
    
    
    
    
    
    
    
    
   - F - 54 -




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
  Remuneration and benefit band
    
    Number of employees$US
    
    2007
    
    2006
    
    2005$  30,001 - $  40,000
    
    37
    
    48
    
    11$  40,001 - $  50,000
    
    27
    
    25
    
    7$  50,001 - $  60,000
    
    24
    
    17
    
    6$  60,001 - $  70,000
    
    20
    
    14
    
    2$  70,001 - $  80,000
    
    26
    
    7
    
    3$  80,001 - $  90,000
    
    13
    
    11
    
    4$  90,001 - $100,000
    
    11
    
    8
    
    5$100,001 - $110,000
    
    15
    
    7
    
    10$110,001 - $120,000
    
    17
    
    10
    
    4$120,001 - $130,000
    
    36
    
    6
    
    9$130,001 - $140,000
    
    24
    
    7
    
    5$140,001 - $150,000
    
    29
    
    5
    
    9$150,001 - $160,000
    
    21
    
    5
    
    7$160,001 - $170,000
    
    20
    
    6
    
    6$170,001 - $180,000
    
    7
    
    6
    
    7$180,001 - $190,000
    
    10
    
    8
    
    $190,001 - $200,000
    
    2
    
    2
    
    3$200,001 - $210,000
    
    2
    
    1
    
    3$210,001 - $220,000
    
    4
    
    5
    
    3$220,001 - $230,000
    
    1
    
    
    
    2$230,001 - $240,000
    
    1
    
    3
    
    1$240,001 - $250,000
    
    3
    
    1
    
    1$250,001 - $260,000
    
    3
    
    
    
    $260,001 - $270,000
    
    4
    
    1
    
    $270,001 - $280,000
    
    1
    
    1
    
    $280,001 - $290,000
    
    
    
    1
    
    1$310,001 - $320,000
    
    
    
    1
    
    $350,001 - $360,000
    
    1
    
    
    
    $360,001 - $370,000
    
    1
    
    
    
    $390,001 - $400,000
    
    
    
    
    
    1$450,001 - $460,000
    
    1
    
    1
    
    $470,001 - $480,000
    
    1
    
    
    
    1$480,001 - $490,000
    
    1
    
    
    
    $610,001 - $620,000
    
    1
    
    
    
    $640,001 - $650,000
    
    1
    
    
    
    $650,001 - $660,000
    
    1
    
    
    
    




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 NOTE 31: RETIREMENT BENEFITS
   NOTE 32: AUDITORS REMUNERATION
  $2007
    
    2006
    
    2005(a) Assurance servicesAudit servicesPricewaterhouseCoopers, PNG Firm
    
    
    154,843
    
    
    
    340,333
    
    
    
    248,555PricewaterhouseCoopers, Other Overseas Firms
    
    
    530,295
    
    
    
    114,976
    
    
    
    104,589Total remuneration for audit services
    
    
    685,138
    
    
    
    455,309
    
    
    
    353,144Other assurance servicesPricewaterhouseCoopers, PNG Firm
    
    
    16,026
    
    
    
    58,115
    
    
    
    51,942PricewaterhouseCoopers, Other Overseas Firms
    
    
    625,664
    
    
    
    54,254
    
    
    
    58,926Total remuneration for other assurance services
    
    
    641,690
    
    
    
    112,369
    
    
    
    110,868Total remuneration for assurance services
    
    
    1,326,828
    
    
    
    567,678
    
    
    
    464,012(b) Taxation servicesPricewaterhouseCoopers,
    
    
    53,598
    
    
    
    78,884
    
    
    
    128,682Total remuneration for taxation services
    
    
    53,598
    
    
    
    78,884
    
    
    
    128,682




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 NOTE 33: CAPITAL AND LEASING COMMITMENTS
 Operating lease commitments
   $ m2007
    
    2006Payable- not later than one year
    
    
    0.7
    
    
    
    1.0- later than one year but not later than 2 years
    
    
    0.5
    
    
    
    0.7- later than two years but not later than 5 years
    
    
    0.7
    
    
    
    1.3- later than 5 years
    
    
    
    
    
    
    2.31.9
    
    
    
    5.3
  Finance lease commitments
 $ m2007
    
    2006Payable- not later than one year
    
    
    0.4
    
    
    
    - later than one year but not later than 2 years
    
    
    0.4
    
    
    
    - later than two years but not later than 5 years
    
    
    0.3
    
    
    
    Total minimum lease payments
    
    
    1.1
    
    
    
    Future finance charges
    
    
    (0.1
    )
    
    
    Total finance lease liability
    
    
    1.0
    
    
    
    Representing lease liabilities:Current
    
    
    0.3
    
    
    
    Non-current
    
    
    0.7
    
    
    
    1.0
    
    
    
    
  Capital expenditure commitments
 $ m2007
    
    2006Capital expenditure commitments contracted for:Payable  not later than one year
    
    
    9.0
    
    
    
    68.39.0
    
    
    
    68.3




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 NOTE 34: CONTINGENT LIABILITIES AND CONTINGENT ASSETS
 Contingent liabilities
 Ballarat
  Niugini Mining Limited  ats  J Bumbandy and the customary landowners of the Mt Victor gold mine
area
   Niugini Mining (Australia) Pty Limited  ats  Roderick Salfinger
   Contingent assets
 Ballarat
  NOTE 35: DIVIDEND RESTRICTION
 settled and cancelled




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 NOTE 36: RELATED PARTY TRANSACTIONS
   
    
    Dr Garnaut was re-appointed as chairman for a three-year period commencing on May 1, 2004,
subject to his continuing to hold office as a director and to certain other termination rights
set out in the agreement;
    
    No fees or benefits are payable to Dr Garnaut by reason of his retirement or other termination
of office; and
  NOTE 37: EARNINGS PER SHARE
  $ m2007
    
    2006
    
    2005Net profit / (loss) attributable to ordinary shareholders
    
    
    (24.1
    )
    
    
    53.8
    
    
    
    9.8Weighted average number of ordinary shares (millions)
    
    
    1,713.8
    
    
    
    1,284.2
    
    
    
    1,284.2Basic EPS (cents/share)
    
    
    (1.4
    )
    
    
    4.2
    
    
    
    0.8Diluted number of ordinary shares (millions)
    
    
    1,717.4
    
    
    
    1,287.5
    
    
    
    1,284.2Diluted EPS (cents/share)
    
    
    (1.4
    )
    
    
    4.2
    
    
    
    0.8
 Reconciliation of weighted average number of ordinary shares
 2007
    
    2006
    
    2005Weighted average number used in calculating basic
earnings per share (in millions)
    
    
    1,713.8
    
    
    
    1,284.2
    
    
    
    1,284.2Adjustments for calculation of diluted earnings per share:Contingently issuable shares
    
    
    3.3
    
    
    
    
    
    
    
    Effect of share options on issue
    
    
    0.3
    
    
    
    
    
    
    
    Weighted average number used in calculating diluted
earnings per share (in millions)
    
    
    1,717.4
    
    
    
    1,287.5
    
    
    
    1,284.2
 NOTE 38: DIVIDENDS PER SHARE




---



##### Table of Contents



LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 NOTE 39: SHARE BASED PAYMENTS
 Lihir Executive Share Plan
       2007 Grant
   2007 Transitional Grant
 st th
 1 2




---



##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
  Per shareright
    
    
    
    
    
    
    
    
    
    Number
    
    Number
    
    Number
    
    Number
    
    NumberExercise
    
    indicative
    
    
    
    
    
    
    
    
    
    granted
    
    exercised
    
    forfeited
    
    outstanding
    
    exercisableprice
    
    value
    
    Hurdle
    
    Number at
    
    during
    
    during
    
    during
    
    at 31-Dec-
    
    at 31-Dec-US$
    
    US$
    
    conditions
    
    1-Jan-07
    
    period
    
    period
    
    period
    
    07
    
    07
    
    
    2.529
    
    
    
    1
    
    
    
    120,814
    
    
    
    123,870
    
    
    
    (48,940
    )
    
    
    (32,561
    )
    
    
    163,183
    
    
    
    39,313
    
    
    2.501
    
    
    
    2
    
    
    
    165,961
    
    
    
    123,876
    
    
    
    (122,645
    )
    
    
    
    
    
    
    167,192
    
    
    
    43,316
    
    
    1.943
    
    
    
    3
    
    
    
    181,213
    
    
    
    185,791
    
    
    
    (102,597
    )
    
    
    (13,644
    )
    
    
    250,763
    
    
    
    64,972
    
    
    1.892
    
    
    
    4
    
    
    
    181,221
    
    
    
    185,801
    
    
    
    (102,603
    )
    
    
    (13,644
    )
    
    
    250,775
    
    
    
    64,974
    
    
    
    
    
    
    5
    
    
    
    
    
    
    
    40,731
    
    
    
    (33,128
    )
    
    
    
    
    
    
    7,603
    
    
    
    7,603
    
    
    1.562
    
    
    
    6
    
    
    
    
    
    
    
    1,840,903
    
    
    
    
    
    
    
    
    
    
    
    1,840,903
    
    
    
    
    
    
    1.506
    
    
    
    7
    
    
    
    
    
    
    
    1,840,928
    
    
    
    
    
    
    
    
    
    
    
    1,840,928
    
    
    
    Total
    
    
    
    
    
    
    
    
    
    
    649,209
    
    
    
    4,341,900
    
    
    
    (409,913
    )
    
    
    (59,849
    )
    
    
    4,521,347
    
    
    
    220,178
  Number exercised
    
    Exercise date
    
    Weighted average price at exercise date (i)409,913
    
    14-20 Sep 2007
    
    USD 2.93
 i.
    
    Purchased over a 5 day period due to restrictions on the volume that could be traded on any
one day.
 Fair value of share rights granted
    (a)
    
    exercise price: $ nil (2006  $ nil)(b)
    
    expected volatility: 42% (2006  43%)(c)
    
    risk-free interest rate: 6.12% (2006 -
6.05%).(d)
    
    Expected life of right (years): 10
years(e)
    
    Weighted average share price at grant date: $3.07
(2006  $2.07)(f)
    
    expected dividend yield: 0% (2006 -
0%)
   Expenses arising from share-based payment transactions
  $US m2007
    
    
    2006
    
    
    2005Executive share plan
    
    
    2.9
    
    
    
    0.5
    
    
    
    
   1.
    
    Individuals are set key performance indicators (KPIs) based around the Companys
performance in developing corporate management and structures in line with Board policies
to raise the long-term value of the Company, including through project and geographic
diversification. The performance condition will be assessed by the Board.
 - F - 61 -




---



##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 2.
    
    This performance condition will be assessed by the Board against changes in the net
present value of the Company. This assessment is to have regard to the amount and timing
of net expected cash flows, as indicated by reserves, costs and other relevant factors.Certain potential sources of change in the Companys net present value will not be included
in the assessment of this performance condition as they have been assessed by the Board to
be beyond the individuals control and the control of the management team generally. The
sources for which adjustments are to be made to date are changes in the gold price,
variations in the hedge delivery programme, hydrocarbon pricing (HFO, diesel and
lubricants), inflation and changes in exchange rates between the US dollar and the
Australian dollar or PNG kina.3.
    
    This performance condition will be assessed by the Board by reference to the
performance of the:
 
    
    Companys total shareholder return or TSR over the performance period from
the VWAP (volume weighted average share price) Month Employed until the testing date
using the VWAP; and
    
    Average total shareholder return of the Comparator Group using the Comparator
Groups VWAP for the same time periods as applicable above.
 If the Companys annual TSR when compared with the Comparator Groups
annual TSR:
 
    
    is greater by 10% or more, all of the share rights
subject to this condition will vest; or
    
    does not exceed the Comparator Groups, no share rights subject to this condition will
vest; or
    
    is greater by less than 10% a straight-line calculated proportion of the share rights
subject to this condition will vest.
 Total shareholder return or TSR is, broadly, share price growth and dividends reinvested,
excluding the impacts of franking credits and taxations.Comparator Group (Sept 05 grant and Jan
06 grants)Prior to March 2006:Newmont, Barrick, Newcrest, Anglo Gold, Oxiana, Goldfields (South Africa), Placer Dome, Rio
Tinto Limited, Harmony and CroesusGrants after March 2006:Newmont, Barrick, Newcrest, Anglo Gold, Oxiana, Goldfields (South Africa), Kingsgate and
Sino Gold.4.
    
    This performance condition will be assessed to the extent to which the Companys total
shareholder return increases over the performance period using the VWAP Month for each
participant as the starting share value for the TSR until the testing date VWAP.If the Companys TSR over the performance period increases by:
 
    
    15% or more, the participant is entitled to all of the TSR growth share rights vesting;
    
    5% or less, the participant will not be entitled to any TSR growth share rights vesting; or
    
    More than 5% but less than 15%, the participant will be entitled to a pro rated
number of TSR growth share rights vesting calculated on a straight line basis.
 5.
    
    This grant was made to existing participants who held share rights at the time of the 3
for 1 Entitlement offer and were unable to participate in the offer due to trading
restrictions leading up to the capital raising. In recognition of Participants in the LESP
not being eligible to participate in the Entitlement Offer, the directors resolved that the
number of share rights vested for each Participant be adjusted to take into account each
Participants entitlement to share rights had they been eligible to participate. The grant
is subject to the same three year service period restrictions.6.
    
    This performance measure will be assessed on the extent to which Companys TSR
increases over the performance period compared to growth in the TSX Global Gold Index
(Index) over the performance period. If Companys TSR when compared with the TSX Global
Gold Index:
 
    
    is less than the Index, then none of the share rights subject to this tranche will vest;
    
    is equal to the Index (Target case), then a fixed % [refer to (a) to (d) below] of the
share rights subject to this tranche will vest; or
    
    is equal to 125% of the Index (Stretch case), then 100% of the share rights subject to
this tranche will vest; or
    
    if the Companys TSR is greater than the Index but less than 125% of the Index, then a
proportion of the share rights (calculated on a straight-line basis) will vest.
 Where the fixed % for the Target case
is equal to:(a)
    
    50%(b)
    
    33.3%(c)
    
    37.5%(d)
    
    40%
 The grant is split into two 50% tranches with performance periods of 1 July 2007 to 31
December 2008 and 1 July 2007 to 31 December 2009.7.
    
    This performance measure will be assessed on the extent to which the Companys TSR
increases over the performance period compared to the TSR growth of companies in the
Comparator Group over the performance period. If the Companys TSR when compared with the
TSRs of the companies in the Comparator Group:
 
    
    is at less than the 50th Percentile (P50), then none of the share rights subject to this
tranche will vest;
    
    is equal to P50 (Target case), then [a fixed % [refer to (a) to (d) below] of the share
rights subject to this tranche will vest; or
    
    is equal to the 90th Percentile (P90)
(Stretch case), then 100% of the share rights subject to this tranche will vest.
 - F - 62 -




---



##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 
    
    if Companys TSR is greater than P50 but less than P90, then a proportion of the share rights
subject to this tranche (calculated on a straight-line basis) will vest.
 Where the fixed % for the Target case
is equal to:(a)
    
    50%(b)
    
    33.3%(c)
    
    37.5%(d)
    
    40%The Comparator Group is composed of those companies in the TSX Global Gold Index with a market
capitalisation of more than US$1billion at the commencement of the performance period, plus
Newcrest, which remain listed companies at the end of the performance period.The grant is split into two 50% tranches with performance periods of 1 July 2007 to 31
December 2008 and 1 July 2007 to 31 December 2009.
 - F - 63 -




---



##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 NOTE 40: SUBSEQUENT EVENTS
 Proposed Merger with Equigold NL
   
    
    obtaining approvals from applicable regulatory bodies such as the Foreign Investment Review
Board, the Australian Securities and Investments Commission, the ASX, POMSoX, PNGSC and the TSX as
appropriate;
    
    obtaining exchange control approval from the Bank of Papua New Guinea;
    
    if required under decree 96-634 of August 9, 1996 determining the terms of application of Law
95-553 of July 18, 1995 being the Mining Code of the Republic of the Ivory Coast, obtaining the
authorisation of the Administration des Minesto implement the Scheme;
    
    obtaining Equigold
shareholder approval of the Scheme at the scheme meeting by the requisite majorities under the
Corporations Act;and
    
    obtaining Court approval of the Scheme in accordance with section
411(4)(b) of the Corporations Act.
         Issue of Additional Capital
  - F - 64 -




---



##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
  MOPU Project
  - F - 65 -




---



##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 
 DIRECTORS DECLARATION
  1.
    
    The financial statements and notes of the Company and of the Consolidated Entity:
 a.
    
    comply with International Financial Reporting Standards and other mandatory professional
reporting requirements; and,b.
    
    give a true and fair view, in all material respects, of the
financial position as at 31 December 2007 and performance of the
Company and the Consolidated Entity for the year ended on that date; and are in
accordance with the Papua New Guinea Companies Act 1997.
 2.
    
    There are reasonable grounds to believe that the Company will be able to pay its debts as and
when they become due and payable.
   Ross Garnaut
    
    Arthur HoodChairman
    
    Managing Director15 April 2008
 - F - 66 -




---



##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 
 SUPPLEMENTARY INFORMATION
 Additional disclosures for PNG investors
  CONSOLIDATED ENTITY2007
    
    
    2006PGK Mil
    
    
    PGK Mil
    
    
    2005Revenue
    
    
    1,389.5
    
    
    
    1,156.0
    
    
    
    658.3Net Profit
    
    
    (67.2
    )
    
    
    161.2
    
    
    
    28.7Total Assets
    
    
    6,427.7
    
    
    
    4,366.8
    
    
    
    3,882.9Total Liabilities
    
    
    (402.8
    )
    
    
    (1,997.0
    )
    
    
    (1,577.2
    )Net Assets
    
    
    6,024.9
    
    
    
    2,369.8
    
    
    
    2,305.7
  - F - 67 -




---



##### Table of Contents



SIGNATURES




---



##### Table of Contents



Item 19. Exhibits
 Exhibit 1 *
    
    Constitutionof Lihir Gold Limited, effective as of April 28, 1998 (incorporated by reference to
Lihirs
annual report on Form 20-F for the fiscal year ended December 31, 2000).Exhibit 4 (a) *
    
    Syndicated Facilities Agreementbetween Lihir, ABN AMRO Australia Limited, ABN AMRO Bank N.V.
(Australia Branch), Australia and New Zealand Banking Group Limited, Bayerische Hypo-und
Vereinsbank AG, BNP Paribus, Bank of Western Australia Limited, Commonwealth Bank of Australia,
Macquarie Bank Limited, National Australia Bank Limited, Natexis Banques Populaires, Societe General,
Société Génerale Australia Branch, WestLB AG, and Westpac Banking Corporation dated September 13,
2005 incorporated by reference to Lihirs annual report on Form 20-F for the fiscal year ended December
31, 2005).Exhibit 4 (b) *
    
    Refinancing Coordination Deed 2005between Lihir, ABN AMRO Australia Limited, ABN AMRO Bank
NV, Commonwealth Bank of Australia, Macquarie Bank Limited, Société Génerale and Société Génerale
Australia Branch, dated September 13, 2005. (incorporated by reference to Lihirs annual report on
Form 20-F for the fiscal year ended December 31, 2005).Exhibit 4 (c) *
    
    Amending Deed (Security Trust Deed)between Lihir Niugini Mining Limited, Niugini Mining (Australia)
Pty Ltd, ABN AMRO Australia Limited, ABN AMRO Bank NV, Commonwealth Bank of Australia,
Macquarie Bank Limited, Société Génerale and Société Génerale Australia Branch, Mitsui & Co.
Precious Metals Inc., and J. Aron & Company dated September 13, 2005 (incorporated by reference to
Lihirs annual report on Form 20-F for the fiscal year ended December 31, 2005).Exhibit 4 (d) *
    
    Lihir Gold Security Trust Deedbetween Lihir, Niugini Mining Limited, Niugini Mining (Australia) Pty
Ltd,
ABN AMRO Australia Limited, ABN AMRO Bank NV, Citibank N.A., and J. Aron & Company dated
November 22, 2000 (incorporated by reference to Lihirs annual report on Form 20-F for the fiscal year
ended December 31, 2000).Exhibit 4 (e) *
    
    Lihir Gold Limited Offshore Chargebetween Lihir and ABN AMRO Australia Limited dated September
13, 2005 (incorporated by reference to Lihirs annual report on Form 20-F for the fiscal year ended
December 31, 2005).Exhibit 4 (f) *
    
    Lihir Gold Deed of Security (PNG) 2005between Lihir and ABN AMRO Australia Limited dated
September 13, 2005 (incorporated by reference to Lihirs annual report on Form 20-F for the fiscal year
ended December 31, 2005).Exhibit 4 (g) *
    
    Lihir Gold Mortgage of Bullion Accountbetween Lihir and ABN AMRO Australia Limited dated
September 13, 2005 (incorporated by reference to Lihirs annual report on Form 20-F for the fiscal year
ended December 31, 2005).Exhibit 4 (h) *
    
    Special MiningLease, dated as of March 17, 1995, between Lihir and the PNG Government
(incorporated by reference to Lihirs Form F-1 filed September 6, 1995).Exhibit 4 (i) *
    
    Mining Development Contract,dated as of March 17, 1995, between Lihir and the PNG Government
(incorporated by reference to Lihirs Form F-1 filed September 6, 1995).Exhibit 4 (m) *
    
    Compensation Agreement for Land, Crops, Water and Air,dated as of April 26, 1995, between Lihir
Management Company, Lihir Mining Area Landowners Association Incorporated, Block Executives (for
and on behalf of the Landowners), Catholic Mission (Kavieng Property Trust) and the United Church in
PNG and the Solomon Islands (incorporated by reference to Lihirs Form F-1 filed September 6, 1995).Exhibit 4 (n) *
    
    Putput and Ladolam Relocation Agreementdated as of April 26, 1995, between Lihir Management
Company, Lihir Mining Area Landowners Association Incorporated and the persons named in various
schedules to the agreement (incorporated by reference to Lihirs Form F-1 filed September 6, 1995).Exhibit 4 (o) *
    
    Integrated Benefits Package Review Status Statement (LSDP)between Nimamar Rural Local
Level Government, Lihir Mining Area Landowners Association, the State of Papua New Guinea, New
Ireland Provincial Government and Lihir dated November 9, 2005 (incorporated by reference to Lihirs
annual report on Form 20-F for the fiscal year ended December 31, 2005).Exhibit 4 (p) *
    
    Amended and Restated Lihirian Equity Settlement Agreementdated January 27, 2006
between Mineral Resources Development Company Limited, Mineral Resources Lihir Limited
and the European Investment Bank (incorporated by reference to Lihirs annual report on
Form 20-F for the fiscal year ended December 31, 2005).
 121




---



##### Table of Contents



Exhibit 4 (q) *
    
    Patent and Know-How License Agreementdated August 5, 1995 between Sherritt Inc and
Lihir Management Company Limited for and on behalf of Lihir, together with amendment
thereto dated August 18, 1995 (incorporated by reference to Lihirs annual report on Form 20-
F for the fiscal year ended December 31, 2003).Exhibit 4 (r) *
    
    Number not usedExhibit 4 (s) *
    
    Agreement for the Servicesof Professor Ross Garnaut as Chairman of Lihir, dated April 26,
2004 between Lihir and Maccullochella Pty Ltd. (incorporated by reference to Lihirs annual
report on Form 20-F for the fiscal year ended December 31, 2003).Exhibit 4 (v) *
    
    Parent Deposit Agreementbetween Lihir Gold Limited and Australia and New Zealand
Banking Group Limited dated February 12, 2007(incorporated by reference to Lihirs annual
report on Form 20-F for the fiscal year ended December 31, 2006).Exhibit 4 (w) *
    
    Management Services Agreement (PNG)between Lihir Services Australia Pty Limited and
Lihir Gold Limited dated May 9, 2006 (incorporated by reference to Lihirs annual report on
Form 20-F for the fiscal year ended December 31, 2006).Exhibit 4 (x) *
    
    Management Services Agreement (Australia)between Lihir Services Australia Pty Limited
and Lihir Gold Limited dated May 9, 2006 (incorporated by reference to Lihirs annual report on
Form 20-F for the fiscal year ended December 31, 2006).Exhibit 4 (y) *
    
    Merger Implementation Agreementbetween Lihir Gold Limited, Lihir Australian Holdings Pty
Limited and Ballarat Goldfields NL dated October 17, 2006(incorporated by reference to Lihirs
annual report on Form 20-F for the fiscal year ended December 31, 2006).Exhibit 4 (z) *
    
    Share Subscription Agreementbetween Lihir Australian Holdings Pty Limited and Ballarat
Goldfields NL dated October 17, 2006(incorporated by reference to Lihirs annual report on
Form 20-F for the fiscal year ended December 31, 2006).Exhibit 4 (aa) *
    
    Deed Pollbetween Lihir Gold Limited the holders of fully paid ordinary shares in Ballarat
Goldfields N.L. dated December 12, 2006 (incorporated by reference to Lihirs annual report
on Form 20-F for the fiscal year ended December 31, 2006).Exhibit 4 (ab)
    
    DNX (Australia) Contractbetween Lihir Gold Limited and DNX Australia Pty Ltd dated
January 2, 2008.Exhibit 4 (ac)
    
    DNX (PNG) Contractbetween Lihir Gold Limited and DNX Papua New Guinea Ltd dated
January 2, 2008.Exhibit 4 (ad)
    
    Revised IBP (Integrated Benefits Package Review Status Statement (LSDP))between Lihir
Gold Limited and The People of Lihir represented by The Mining Area Landowners
Association Inc and The Nimamar Rural Local-Level Government dated May, 2 2007.Exhibit 4 (ae)
    
    Gekko Contractbetween Ballarat Goldfields NL and Gecko Systems Pty Ltd made on March
26, 2007.Exhibit 4 (af)
    
    Spinifex Contractbetween Ballarat Goldfields NL and Spinifex Projects Pty Ltd made on or
about May 12, 2005.Exhibit 4 (ag)
    
    Pybar Contractbetween Ballarat Goldfields NL and Pybar Mining Services Pty Ltd made on
October 18, 2004.Exhibit 4 (ah)
    
    Washingtons Drilling Contractbetween Lihir Gold Limited and Washingtons Drilling
(International) Limited NZ made on August 2, 2007.Exhibit 4 (ai)
    
    Merger Implementation Agreementbetween Lihir Gold Limited, Lihir Australian Holdings Pty
Ltd and Equigold NL dated March 20, 2008.Exhibit 4 (aj)
    
    Lihir Executive Share Plan (LESP)for Lihir Gold Limited approved by shareholders on April 24, 2007
 122




---



##### Table of Contents



Exhibit 8
    
    Significant subsidiariesExhibit 12 (a)
    
    302 Certification by Chief Executive OfficerExhibit 12 (b)
    
    302 Certification by Chief Financial OfficerExhibit 13 (a)
    
    906 Certification by Chief Executive OfficerExhibit 13 (b)
    
    906 Certification by Chief Financial Officer
 
 *
    
    Indicates exhibits lodged with SEC in previous Form 20-Fs. 123