##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 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, 2008.
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 OR
 o
    
    SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission file number 000-26860
 Lihir Gold Limited
  
 Company contact person:
Mr Stuart MacKenzie
0011 617 3318 3300  Stuart.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 
Lihir Gold Limited Ordinary Shares and which are

evidenced by American Depositary Receipts
    
    NASDAQ Global Market
 
  
   
  Lihir Gold Limited Ordinary Shares of no par value:
    
    2,368,729,935
(including 1,046,662 Restricted Executive Shares)Lihir Gold Limited Treasury B Shares
    
    161,527,405
 
  þ o
  o þ
   þ o
  þ o o
  o
    
    U.S. GAAPþ
    
    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




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Certain Definitions
    
    
    4Forward Looking Statements
    
    
    6PART I
    
    
    7Item 1. Identity of Directors, Senior Management, and Advisors
    
    
    7Item 2. Offer Statistics and Expected Timetable
    
    
    8Item 3. Key Information
    
    
    9A. Selected Financial Data
    
    
    9B. Capitalisation and Indebtedness
    
    
    11C. Reasons for the Offer and Use of Proceeds
    
    
    12D. Risk Factors
    
    
    13Item 4. Information on the Company
    
    
    27A. History and Development of the Company
    
    
    27B. Business Overview
    
    
    31C. Organisational Structure
    
    
    56D. Property, Plant and Equipment
    
    
    57Item 4A. Unresolved Staff Comments
    
    
    78Item 5. Operating and Financial Review and Prospects
    
    
    79A. Operating results
    
    
    79B. Liquidity and Capital Resources
    
    
    94C. Research and Development, Patents and Licenses, etc
    
    
    96D. Trend Information
    
    
    97E. Off-Balance Sheet Arrangements
    
    
    99F. Tabular disclosure of Contractual Obligations
    
    
    100G. Recently issued IFRS standards
    
    
    101Item 6. Directors, Senior Management and Employees
    
    
    102A. Directors and Senior Management
    
    
    102B. Compensation
    
    
    105C. Board Practices
    
    
    115D. Employees
    
    
    122E. Share Ownership
    
    
    123Item 7. Major Shareholders and Related Party Transactions
    
    
    124A. Major Shareholders
    
    
    124B. Related Party Transactions
    
    
    126C. Interest of Experts and Counsel
    
    
    126Item 8. Financial Information
    
    
    127A. Consolidated Statements and Other Financial Information
    
    
    127B. Significant Changes
    
    
    128Item 9. The Offer and Listing
    
    
    129A. Offer and Listing Details
    
    
    129Item 10. Additional Information
    
    
    131A. Share Capital
    
    
    131B. Memorandum and Articles of Association
    
    
    131C. Material Contracts
    
    
    136D. Exchange Controls
    
    
    141E. Taxation
    
    
    142F. Dividends and Paying Agents
    
    
    145G. Statements by Experts
    
    
    145H. Documents on Display
    
    
    145I. Subsidiary Information
    
    
    145Item 11. Quantitative and Qualitative Disclosure about Market Risk
    
    
    146A. Quantitative Information about Market Risk
    
    
    146B. Qualititative Information about Market Risk
    
    
    146
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Item 12. Description of Securites Other than Equity Securities
    
    
    146PART II
    
    
    147Item 13. Defaults, Dividend Arrerages and Delinquencies
    
    
    147Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
    
    
    147Item 15. Controls and Procedures
    
    
    147A. Evaluation of Disclosure Controls and Proceedures
    
    
    147B. Managements annual report on Internal control over financial reporting
    
    
    147C. Attestation Report of the Registerd public accounting firm
    
    
    148D. Changes in internal control over financial reporting
    
    
    148Item 16A. Audit Committee Financial Expert
    
    
    149Item 16B. Code of Ethics
    
    
    149Item 16C. Principal Accountant Fees and Services
    
    
    153Item 16D. Exceptions from Listing Standards for Audit Committees
    
    
    154Item 16E. Purchases of Equity Securities by Issue and Affiliates
    
    
    154Item 16F. Change in the Registrants Certifying Accountant
    
    
    154Item 16G. Corporate Governance
    
    
    154Item 17. Financial Statements
    
    
    155Glossary of Certain Technical Terms
    
    
    156Conversion Table and Unit Equivalent
    
    
    161Item 18. Financial Statements
    
    162Item 19. Exhibits
    
    164EX-4.AKEX-4.ALEX-4.AMEX-4.ANEX-4.AOEX-4.APEX-8EX-12.AEX-12.BEX-13.AEX-13.B
  3




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Certain Definitions
         Corporations Act
 Companies Act
            4




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5




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Forward Looking Statements
   6




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PART I
 
 Item 1. Identity of Directors, Senior Management, and Advisors
  7




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Item 2. Offer Statistics and Expected Timetable
  8




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Item 3. Key Information
 
 A.
    
    Selected Financial Data
  Year ended December 31,(In $ millions, except where indicated)2008
    
    2007#
    
    2006*
    
    2005*
    
    2004*Amounts calculated in accordance with IFRS:Statements of Comprehensive Income data:Revenue(1)
    
    
    755.6
    
    
    
    498.4
    
    
    
    386.0
    
    
    
    263.9
    
    
    
    246.1Operating profit before other
income/(expense)(2)
    
    
    261.3
    
    
    
    195.9
    
    
    
    156.2
    
    
    
    59.7
    
    
    
    27.1Net profit / (loss) after tax(3)
    
    
    110.2
    
    
    
    (24.1
    )
    
    
    54.9
    
    
    
    6.1
    
    
    
    339.2Earnings ($) per share, basic and diluted(4)
    
    
    0.053
    
    
    
    (0.014
    )
    
    
    0.042
    
    
    
    0.005
    
    
    
    0.264Cash dividends ($) per ordinary share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Number of ordinary shares (millions)(5)
    
    
    2,187.1
    
    
    
    1,903.9
    
    
    
    1,284.2
    
    
    
    1,284.2
    
    
    
    1,284.2Statements of Financial Position data(7):Total assets
    
    
    3,363.8
    
    
    
    2,304.3
    
    
    
    1,503.4
    
    
    
    1,325.7
    
    
    
    1,166.9Cash and current receivables held
    
    
    85.7
    
    
    
    189.1
    
    
    
    51.6
    
    
    
    133.2
    
    
    
    88.7Current liabilities
    
    
    165.2
    
    
    
    77.8
    
    
    
    177.3
    
    
    
    80.8
    
    
    
    104.3Long term obligations
    
    
    271.1
    
    
    
    58.0
    
    
    
    506.8
    
    
    
    455.1
    
    
    
    215.4Total shareholders equity(6)
    
    
    2,927.5
    
    
    
    2,168.5
    
    
    
    819.3
    
    
    
    789.8
    
    
    
    847.2Paid up capital(7)
    
    
    3,080.0
    
    
    
    2,319.7
    
    
    
    1,027.1
    
    
    
    1,027.5
    
    
    
    1,027.5Expenditure and Financing data:Net cash flow from operating activities
    
    
    212.4
    
    
    
    (270.0
    )
    
    
    57.3
    
    
    
    (54.5
    )
    
    
    30.3Net cash flow from investing activities
    
    
    (270.9
    )
    
    
    (178.6
    )
    
    
    (203.3
    )
    
    
    (99.0
    )
    
    
    (87.6
    )Financing activities:Issuance of ordinary shares
    
    
    
    
    
    
    977.4
    
    
    
    
    
    
    
    
    
    
    
    2.2Drawdown of term debt
    
    
    
    
    
    
    22.4
    
    
    
    65.6
    
    
    
    245.5
    
    
    
    Repayment of loans
    
    
    (0.4
    )
    
    
    (421.6
    )
    
    
    
    
    
    
    (49.5
    )
    
    
    (14.0
    )Dividend paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Advance to subsidiaries pre-acquisition
    
    
    (49.7
    )Purchase of treasury shares
    
    
    (0.9
    )
    
    
    (1.3
    )
    
    
    (0.4
    )
    
    
    
    
    
    
    Net cash flow from financing activities
    
    
    (51.0
    )
    
    
    576.9
    
    
    
    65.2
    
    
    
    139.6
    
    
    
    (11.8
    )
 
 (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 9




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(4)
    
    Alternative terminology: net income/(loss) from operations per share or income/(loss) from
continuing operations per share.(5)
    
    As adjusted to reflect changes in capital.(6)
    
    Alternative terminology: net assets.(7)
    
    Alternative terminology: capital stock.*
    
    Revised as follows:a)
    
    A revision of deferred tax balances was undertaken in Lihir Gold Limited which was
attributable to the Lihir Island operation and was made to reconcile the previously reported
tax balances to amendments sought for various income tax returns for the periods 1998-2004.
The effect of this revision for each relevant year was: an increase of $10 million in deferred
tax benefit in 2004, a decrease in deferred tax benefit of $3.7 million in 2005, an increase
in deferred tax benefit of $1.1 million in 2006, an increase of $1.8 million in deferred tax
benefit in the year ended 31 December 2007, an increase of $7.4 million in opening retained
earnings at 1 January 2007 and an increase of $9.2 million in deferred tax assets.# b)
    
    Deferred income tax expense increased by $1.8 million to reflect an accounting adjustment in
relation to opening deferred tax adjustments in Ballarat Goldfields NL.# c)
    
    Finalisation of the Ballarat business combination and subsequent adjustments to the
provisional accounting values as illustrated in Note 30(b) and translation of these final
adjustments to the closing $US rate at 31 December 2007. 10




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B.
    
    Capitalisation and Indebtedness
  11




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C.
    
    Reasons for the Offer and Use of Proceeds
  12




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D.
    
    Risk Factors
  (1)
    
    The Company is dependent on production from Lihir Island
           13




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(2)
    
    The Companys operations may be adversely affected by difficult geological conditions(a)
    
    Hydrological and geothermal risks
    (b)
    
    Earthquake seismic activity risks
    14




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(c)
    
    Landslide risks
  
    
    extension of the North Kapit Stockpile;
    
    higher than long term average rainfall over the previous six months prior to the
landslide; and
    
    a magnitude 7.7 earthquake on September 9, 2005.
  
    
    flow of water into tension cracks and blockage of subsurface drainage;
    
    geothermal activity; and
    
    loss of side restraint and extension upslope.
  (d)
    
    Unstable ground conditions
  (3)
    
    The Companys business is subject to construction, commissioning and other operational risks
    15




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(4)
    
    The Companys results are dependent upon gold prices determined by the market
     .
 16




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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
    
    
    1,011
    
    
    
    712
    
    
    
    8722009 (to 29 May)
    
    
    989
    
    
    
    810
    
    
    
    909
 (5)
    
    The Companys insurance may not address all operating risks
   (6)
    
    The Company is subject to political risks
  (a)
    
    Lihir operation
  17




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(b)
    
    Bonikro operation
  (7)
    
    The Company is vulnerable to civil unrest, adverse community relations and land owner
compensation issues.
  (a)
    
    Lihir operation(i)
    
    Civil unrest
  (ii)
    
    Community relations
  (iii)
    
    Landowner compensation issues
   18




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(b)
    
    Bonikro operation(i)
    
    Civil unrest
  (ii)
    
    Community relations
  (iii)
    
    Landowner compensation issues
   (c)
    
    Ballarat operation
  (8)
    
    The Companys prospects are partly dependant on reserve estimates and future
experience
  19




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(a)
    
    Ballarat operation is exposed to exploration and development risk
  
    
    establish the presence, and to quantify the extent and grades (metal content), of
mineralized material through drilling;
    
    determine appropriate metallurgical recovery processes to extract gold from the
ore;
    
    estimate ore reserves; or
    
    construct, maintain, upgrade or expand mine and processing facilities.
   20




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(9)
    
    The Company is subject to strikes, work slowdowns and other industrial relations risk
  (a)
    
    Lihir operation
   (b)
    
    Bonikro operation
  (c)
    
    Ballarat operation
  (d)
    
    Mt Rawdon operation
  (10)
    
    The Company cannot guarantee it can obtain all the mining and processing inputs required
for its operations, including staff
   21




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(11)
    
    The Company is subject to fluctuations in oil prices
  (12)
    
    The Company has limited financial resources
  (13)
    
    The Companys operations are subject to environmental risks
  (a)
    
    Lihir operation
  (b)
    
    Ballarat operation
   22




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(c)
    
    Mt Rawdon operation
  (d)
    
    Bonikro operation
   (14)
    
    The Companys mining and exploration rights may be suspended or terminated
  (a)
    
    Lihir operation
   23




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(b)
    
    Bonikro operation
  (c)
    
    Ballarat operation
  (d)
    
    Mt Rawdon operation
   (e)
    
    Côte dIvoire
  (15)
    
    The PNG government may not grant the necessary permits to enable the MOPU Project to be completed
  (16)
    
    The Company is vulnerable to currency risks and foreign exchange controls
  24




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(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 or directors 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.
   25




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26




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Item 4. Information on the Company
 
 A. History and Development of the Company
  (a) Introduction
 Companies Act
 
    
    Australian Securities Exchange Limited (ASX);
    
    Port Moresby Stock Exchange (POMSOX);
    
    Toronto Stock Exchange (TSX); and
    
    National Association of Security Dealers Automated Quotations (NASDAQ).
  
    
    the Ballarat operation in the State of Victoria in Australia;
    
    the Bonikro operation in Côte dIvoire in West Africa; and
    
    the Mount Rawdon operation in the State of Queensland in Australia.
 (1) Development of the Lihir operation
    27




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
    
    representation and liaison services;
    
    banking and credit arrangements;
    
    procurement of goods and services;
    
    recruitment;
    
    marketing of products;
    
    tax returns; and
    
    strategic services.
  (2) Merger with Ballarat Goldfields
  (3) Merger with Equigold
   28




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(b) Capital Expenditures
  Capital Expenditure 2006  2008
 (in US$ millions)
    
    2008
    
    2007
    
    2006Lihir
    
    
    153.0
    
    
    
    156.5
    
    
    
    185.9Ballarat
    
    
    118.6
    
    
    
    65.9
    
    
    
    Bonikro
    
    
    27.6
    
    
    
    
    
    
    
    Côte dIvoire exploration
    
    
    2.3
    
    
    
    
    
    
    
    Mount Rawdon
    
    
    1.3
    
    
    
    
    
    
    
    Corporate
    
    
    1.3
    
    
    
    0.3
    
    
    
    1.8304.1
    
    
    
    222.7
    
    
    
    187.7
  (a)
    
    $50.6 million for the MOPU Project;(b)
    
    $102.4 million for other sustaining capital expenditure at the Lihir operation;(c)
    
    $118.6 million for Ballarat operations infrastructure and capitalized development
costs (refer Note 1(v) of the financial statements);(d)
    
    $27.6 million for construction and commissioning of the Bonikro operation;(e)
    
    $2.3 million for expenditure in further defining existing reserves in Côte dIvoire
(refer Note 1 (iv) of the financial statements); and(f)
    
    $1.3 million for each of the Mount Rawdon operation and the Brisbane corporate office.
     (a)
    
    Lihir Island ($82.4 million for the MOPU Project and $4.9 million for other
equipment purchases);(b)
    
    Ballarat ($4.9 million water purification plant and tailings storage upgrade
and $1.2 million other equipment purchases); and(c)
    
    Bonikro ($2.8 million dump trucks and other equipment).
  29




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30




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B.
    
    Business Overview
   2 2
 2 2
 2
 2
 Description of Operations
 (a)
    
    Lihir Operation(1)
    
    Overview
    31




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Current Plant Flowchart after Flotation Installation
 
   (2)
    
    Mining(A)
    
    General
     2008
    
    
    2007
    
    
    2006High-grade sulphide ore (K tonnes)
    
    
    6,204
    
    
    
    6,111
    
    
    
    4,204High-grade sulphide ore (g/t Au)
    
    
    4.98
    
    
    
    5.14
    
    
    
    5.51Low-grade sulphide ore (K tonnes)
    
    
    8,335
    
    
    
    4,380
    
    
    
    3,751Low-grade sulphide ore grade (g/t Au)
    
    
    2.22
    
    
    
    2.32
    
    
    
    2.27Total Ore (K tonnes)
    
    
    14,539
    
    
    
    10,491
    
    
    
    7,955Total Ore grade (g/t Au)
    
    
    3.4
    
    
    
    3.96
    
    
    
    3.98Total Waste (K tonnes)
    
    
    36,120
    
    
    
    47,769
    
    
    
    48,195Total Material (K tonnes)
    
    
    50,660
    
    
    
    58,260
    
    
    
    56,150
 32




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(B)
    
    Pit Design and Planning
   o o o o o
  (C)
    
    Production Scheduling
  (D)
    
    Mill Throughput
  33




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Plant Optimization for selected Pulp Density and Sulphur grades
 
 Sulphide
sulphur grade in autoclave feed solids
 Assumptions:
 3
 Plant Optimization for selected Hardness/Work Index and Sulphur grades
 
 Sulphur
Grade (%)
 34




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(E)
    
    Metallurgical Recovery
 The planned metallurgical recovery is determined from current historical operating
experience and realistically expected future plant performance. It has been shown to be a
logarithmic average by all material types that varies with gold grade. Reviews undertaken
on stockpile material conclude that for lower grade ores the existing logarithmic recovery
function is reasonably justified for estimating Ore Reserves under current and future plant
operating conditions. However, test work is being undertaken to further evaluate the
varying recovery relationships by material type including stockpile material.This relationship is described by:
 Recovery = (0.033*LN(Ore grade)+0.8576)
  (F)
    
    Sulphide Content
  (G)
    
    Economic Grade Ore Stockpiles
  (H)
    
    Waste Rock Disposal
  35




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(I)
    
    Blasting
  (J)
    
    Mine Drainage
  (K)
    
    Mining Equipment
  (3)
    
    Processing
 (A)
    
    General
    36




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(B)
    
    Crushing
  (C)
    
    Stockpiling and Blending
    (D)
    
    Grinding and Thickening
   37




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(E)
    
    Pressure Oxidation
   (F)
    
    Energy
   (G)
    
    CCD Washing and Neutralization
  38




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(H)
    
    CIL Processing
  (I)
    
    Gold Recovery
     (J)
    
    Tailings Disposal
   (K)
    
    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.
 39




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(L)
    
    Limestone Deposits
  (M)
    
    MOPU Project
    (N)
    
    Processing Period after 2022
  (4)
    
    Infrastructure
   40




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(5)
    
    Logistics
  (6)
    
    Personnel
 (A)
    
    Workforce
  (B)
    
    Occupational Health and Safety
  (C)
    
    Safety Performance
  41




---



##### Table of Contents



1998
    
    
    1999
    
    
    2000
    
    
    2001
    
    
    2002
    
    
    2003
    
    
    2004
    
    
    2005
    
    
    2006
    
    
    2007
    
    
    2008LTI
    
    
    12
    
    
    
    11
    
    
    
    11
    
    
    
    16
    
    
    
    11
    
    
    
    12
    
    
    
    13
    
    
    
    12
    
    
    
    5
    
    
    
    2
    
    
    
    3LTIFR
    
    
    2.05
    
    
    
    1.70
    
    
    
    1.75
    
    
    
    2.30
    
    
    
    1.80
    
    
    
    1.50
    
    
    
    1.50
    
    
    
    1.53
    
    
    
    0.53
    
    
    
    0.18
    
    
    
    0.26
    (7)
    
    Community Affairs
   (A)
    
    The Original Integrated Benefits Package (IBP)
 Original
  42




---



##### Table of Contents



(B)
    
    The revised IBP  Lihir Sustainable Development Plan (LSDP)
  (C)
    
    Equity Participation
     43




---



##### Table of Contents



2008
    
    

2007
    
    

2006Kina millions
    
    
    66.5
    
    
    
    55.4
    
    
    
    42.1$ millions equivalent
    
    
    26.2
    
    
    
    20.9
    
    
    
    14.8
  (D)
    
    Business Development
    (E)
    
    Education Assistance
  44




---



##### Table of Contents



(F)
    
    Security
    (G)
    
    Community Health
  (b)
    
    Ballarat Operation
 (1)
    
    Overview
       45




---



##### Table of Contents



(2)
    
    Mining(A)
    
    General
     2008
    
    
    2007
    
    
    2006Development (m)
    
    
    6,093
    
    
    
    3,819
    
    
    
    2,890Total Ore (tonnes)
    
    
    129,282
    
    
    
    24,998
    
    
    
    20,897Total Ore (g Au/t)
    
    
    3.5
    
    
    
    3.3
    
    
    
    3.3Total Waste (tonnes)
    
    
    296,287
    
    
    
    217,300
    
    
    
    191,463Total Material (tonnes)
    
    
    425,569
    
    
    
    242,298
    
    
    
    212,360
 (B)
    
    Underground Mine Design and Planning
    46




---



##### Table of Contents



(C)
    
    Production Scheduling
  (D)
    
    Waste Rock Disposal
  (E)
    
    Mine Dewatering
  (F)
    
    Ventilation
  (3)
    
    Processing(A)
    
    General
   47




---



##### Table of Contents



Recovery Flowsheet
 
 (B)
    
    Crushing
  (C)
    
    Gravity Circuit
    48




---



##### Table of Contents



(D)
    
    Concentrate Leaching
  (E)
    
    Gold Room
    (F)
    
    Tailings Storage Facility.
 3
    (4)
    
    Infrastructure
    49




---



##### Table of Contents



(5)
    
    Logistics
  (6)
    
    Community Affairs & Management Systems
      (c)
    
    Mount Rawdon Operation
 (1)
    
    Overview
    (2)
    
    Mining(A)
    
    General
  50




---



##### Table of Contents



(B)
    
    Pit Design and Planning
   
    
    mill feed requirements and capacities;
    
    stripping requirements for the cutback stages;
    
    loading rates constraints, where only two excavators and associated trucks can
operate; and
    
    haulage limits determined by the size and number of trucks and their
productivity.
  
    
    13 m to 25 m berm width;
    
    30 m bench height;
    
    Variable Slope angles based on recommendations by Coffey Mining, between
53o and 63.4o inter ramp angles; and
    
    25 m wide haul roads typically 1:9 grade.
  (C)
    
    Production Scheduling
  (D)
    
    Mine Equipment
   (3)
    
    Processing
 (A)
    
    Process Plant
   51




---



##### Table of Contents



(B)
    
    Mill Recovery
   (4)
    
    Infrastructure
   
    
    Sunwater  500 megalitres per annum.
    
    Burnett Shire  (Option 1)  400 megalitres per annum.
    
    Burnett Shire  (Option 2)  400 megalitres per annum.
   (5)
    
    Logistics
  52




---



##### Table of Contents



(6)
    
    Community Affairs
   (d)
    
    Bonikro Operation(1)
    
    Overview
  2
   (2)
    
    Mining
  (A)
    
    General
  (B)
    
    Pit Design and Planning
  53




---



##### Table of Contents




    
    mill feed requirements and capacities;
    
    stripping requirements for cutback stages;
    
    loading rate constraints, where two excavators and associated trucks can
operate; and
    
    haulage limits determined by the size and number of trucks and their
productivity.
  
    
    20 m to 30 m berm intervals with 2.5 m to 5 m mining benches;
    
    Variable Slope angles based on recommendations by Coffey Mining, between
37o and 59.6o inter ramp angles; and
    
    15 m to 22 m wide haul roads typically 1:9 grade.
 (C)
    
    Mine Equipment
   (3)
    
    Processing
    Residence Time
    
    24 hoursPulp Density
    
    48-52%Cyanide Concentration
    
    0.05% initialpH
    
    >10Carbon Concentration
    
    8-10GRS/L
    54




---



##### Table of Contents



(4)
    
    Infrastructure
    (5)
    
    Logistics
  (6)
    
    Community Affairs
    55




---



##### Table of Contents



C.
    
    Organisational Structure
     Lihir Gold Limited
    
    
    
    Ownership Interest
    
    Voting PowerSubsidiaries
    
    Country of Incorporation
    
    (Percent)
    
    (Percent)Niugini Mining Limited
    
    Papua New Guinea
    
    
    100
    
    
    
    100Niugini Mining (Australia) Pty Ltd
    
    Australia
    
    
    100
    
    
    
    100Lihir Management Company Limited
    
    Papua New Guinea
    
    
    100
    
    
    
    100Lihir Business Development Limited
    
    Papua New Guinea
    
    
    100
    
    
    
    100Lihir Services Australia Pty Ltd
    
    Australia
    
    
    100
    
    
    
    100Lihir Australian Holdings Pty Ltd
    
    Australia
    
    
    100
    
    
    
    100Ballarat Goldfields Pty Ltd
    
    Australia
    
    
    100
    
    
    
    100Berringa Resources Pty Ltd
    
    Australia
    
    
    100
    
    
    
    100Ballarat West Goldfields Pty Ltd
    
    Australia
    
    
    100
    
    
    
    100New Resources Pty Ltd
    
    Australia
    
    
    100
    
    
    
    100Corpique(No.21) Pty Ltd
    
    Australia
    
    
    100
    
    
    
    100Equigold Pty Ltd
    
    Australia
    
    
    100
    
    
    
    100Swindon Holdings Pty Ltd
    
    Australia
    
    
    100
    
    
    
    100Stanmines Pty Ltd
    
    Australia
    
    
    100
    
    
    
    100Kim Resources Pty Ltd
    
    Australia
    
    
    100
    
    
    
    100Equigold Mines Côte dIvoire SA
    
    Côte dIvoire
    
    
    90
    
    
    
    90Equigold Côte dIvoire SA
    
    Côte dIvoire
    
    
    98
    
    
    
    98
 56




---



##### Table of Contents



D.
    
    Property, Plant and Equipment(a)
    
    Lihir operation
  (1)
    
    Lihir Island (Niolam Island)
     (2)
    
    Mining Rights
    57




---



##### Table of Contents



(3)
    
    Geology
     58




---



##### Table of Contents



59




---



##### Table of Contents



60




---



##### Table of Contents



(4)
    
    Reserve Estimates
     ContainedReserve
    
    Tonnes
    
    Average grade
    
    OuncesCategory
    
    (In millions)
    
    (g/t Au)
    
    (millions)Un-mined Ore
    
    Proven
    
    
    0
    
    
    
    0
    
    
    
    0Probable
    
    
    180.3
    
    
    
    2.94
    
    
    
    17.0Economic Stockpiled Ore
    
    Proven
    
    
    59.4
    
    
    
    2.48
    
    
    
    4.7Total Reserves
    
    
    
    
    239.6
    
    
    
    2.83
    
    
    
    21.8
       61




---



##### Table of Contents



(5)
    
    Exploration
     62




---



##### Table of Contents



(6)
    
    Environmental Considerations(A)
    
    Overview
       63




---



##### Table of Contents



(B)
    
    Environmental Plan
   64




---



##### Table of Contents



(C)
    
    Land and Habitat Impacts
    (D)
    
    Waste Rock and Marine Impacts
     65




---



##### Table of Contents



(E)
    
    Stockpile Drainage
   (F)
    
    Tailings Disposal
     66




---



##### Table of Contents



(G)
    
    Rehabilitation and Decommissioning
    (H)
    
    Seismic Considerations
   67




---



##### Table of Contents



(7)
    
    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 (as at February 2008) to lift process plant
capacity to match the current mining rate.
      68




---



##### Table of Contents




    
    By maximizing 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 optimizing the
processing operation.
    (b)
    
    Ballarat operation
 (1)
    
    Overview
 2 2
 69




---



##### Table of Contents



70




---



##### Table of Contents



(2)
    
    Ballarat East
 (A)
    
    Geology
    ° ° ° °
 (B)
    
    Mineralization
      71




---



##### Table of Contents



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
    %
  
  72




---



##### Table of Contents



(C)
    
    Reserve estimate
    (D)
    
    Exploration
  (E)
    
    Rehabilitation and Decommissioning
  (3)
    
    Other projects
 (A)
    
    Ballarat West
    73




---



##### Table of Contents



(B)
    
    Ballarat South
    (C)
    
    Berringa
    (c)
    
    Mount Rawdon Operation
 (1)
    
    Overview
  (2)
    
    Geology and Mineralization
     74




---



##### Table of Contents



(4)
    
    Reserve Estimate
  75




---



##### Table of Contents



(5)
    
    Rehabilitation and Decommissioning
   (d)
    
    Bonikro operation
 (1)
    
    Overview
  (2)
    
    Geology
     (3)
    
    Mineralization
  76




---



##### Table of Contents



(4)
    
    Reserve Estimates
  (5)
    
    Rehabilitation and Decommissioning
  (d)
    
    Insurance
  77




---



##### Table of Contents



Item 4A. Unresolved Staff Comments
 .
 78




---



##### Table of Contents



Item 5. Operating and Financial Review and Prospects
 
 A. Operating Results
 (a) Introduction
      (b)
    
    Recent Developments
 (1)
    
    MOPU Project
   (2)
    
    Merger with Equigold
  79




---



##### Table of Contents



(3)
    
    Issue of Additional Capital
     (4)
    
    Reserves
   80




---



##### Table of Contents



(5)
    
    Reduction in Ballarat Asset Value
         (c)
    
    Critical Accounting Estimates and Judgments
    81




---



##### Table of Contents



Recoverability of long-lived assets
  Recoverability of non-current ore stockpiles
  Determination of ore reserves and mineral resources and remaining mine life
     
    
    a resource and resource potential review conducted by independent experts
appropriately qualified to opine on the existing exploration and drilling data and take
into account other factors in forming their opinions;
    
    announcements regarding the asset have been sufficiently scrutinised by a JORC
recognised Competent Person with sufficient experience relevant to the style of
mineralisation and the type of deposit under consideration;
    
    clear delineation from drilling of multiple repeats of mineralised faults and
structures that hosted ore bodies in the upper levels of the mine that were
historically extracted. The drilling intersections are of sufficient tenor to provide
confidence of continuity of mineralisation and/or repetition along strike and down dip;
    
    historical records of mining at the Ballarat field revealed production in excess of
11 million ounces of gold. Of this, 1.7 million ounces were produced from geological
structures similar to those identified in recent drilling below the old workings;
    
    a well documented history of previous production and work on stope modelling had
given a good indication of the grade and size of individual ore lenses. This
information had been used to model the shape of likely ore lenses intersected by
drilling;
 82




---



##### Table of Contents




    
    drilling undertaken by Ballarat Goldfields prior to its acquisition by the Company
had successfully intersected multiple repeats of mineralised faults and structures that
hosted ore zones in the upper levels of the mine; ore from these upper level zones had
been successfully extracted in the past.
The drilling intersections were of sufficient spacing and frequency to provide some
confidence about continuity of mineralisation below the historically mined ore zones;
    
    independent technical evaluation of the mineral assets of Ballarat Goldfields
prepared by Grant Samuel & Associates in November 2006;
    
    the successful conversion of inferred resource into higher resource categories as
drilling density increases from resource definition drilling to stope delineation
drilling;
    
    positive results from trial mining and pilot processing plant which during 2008
yielded 10,366oz of gold;
    
    at the time of acquisition, the Ballarat project was deemed to be in the development
phase, with underground decline development and trial mining of the first stopes being
undertaken, along with trial processing of small parcels of ore. A significant effort
had been expended over several years to develop a model which accurately predicts the
resource boundaries and the mineable ore. Drilling results were supportive of the
veracity of the model, and preliminary trial mining had indicated
mineralisation was present on the structures expected.
      Provision for restoration and rehabilitation obligations
  Recoverability of deferred tax assets
  83




---



##### Table of Contents



Unit-of-production method of depreciation
  Deferred mining costs
   Estimated impairment of goodwill
   (d)
    
    Changes in Accounting Policies and New Accounting Standards
  Exploration and Evaluation Expenditure
     84




---



##### Table of Contents



85




---



##### 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
    
    EntityIFRS 2
    
    Share-based Payment
    
    Amendment relating
to vesting
conditions and
cancellations
    
    Annual period
beginning on or
after 1 January
2009
    
    The Consolidated Entity has
share-based payment
transactions that may be
affected by these
amendments. The
Consolidated Entity has yet
to determine the extent of
the impact, if any.
    
    Annual period
beginning on or
after 1 January
2009IFRS 3
    
    Business
Combinations
    
    Comprehensive
revision on
applying the
acquisition method
    
    Annual periods
beginning on or
after 1 July 2009
    
    This amendment will impact
the accounting for future
business combinations
effected after adoption of
the revised accounting
standard.
    
    Annual periods
beginning on or
after 1 July 2009IFRS 7
    
    Financial
Instruments:
Disclosures.
    
    Amendments for
disclosure of
eligible hedged
items.
    
    Annual periods
beginning on or
after 1 July 2009.
    
    IFRS 7 is a disclosure
standard so will have no
direct impact on the amounts
disclosed in the
Consolidated Entities
financial statements.
    
    Annual periods
beginning on or
after 1 July 2009.IAS 1
    
    Presentation of
Financial
Statements
    
    Amendments relating
to disclosure of
puttable
instruments and
obligations arising
on liquidation
    
    Annual periods
beginning on or
after 1 January
2009
    
    At present the Consolidated
Entity has no puttable
financial instruments as
defined under IAS 32
therefore the amendment
would have no impact for the
Consolidated Entity as at 31
December 2008.
    
    Annual periods
beginning on or
after 1 January
2009IAS 27
    
    Consolidated and
Separate Financial
Statements
    
    Consequential
amendments arising
from amendments to
IFRS 3
    
    Annual periods
beginning on or
after 1 July 2009
    
    This amendment will impact
the accounting for future
business combinations
effected after adoption of
the revised accounting
standard.
    
    Annual periods
beginning on or
after 1 July 2009IAS 28
    
    Investments in Associates
    
    Consequential
amendments arising
from amendments to
IFRS 3
    
    Annual periods
beginning on or
after 1 July 2009
    
    This amendment will impact
the accounting for future
business combinations
effected after adoption of
the revised accounting
standard.
    
    Annual periods
beginning on or
after 1 July 2009IAS 31
    
    Interest in Joint Ventures
    
    Consequential
amendments arising
from amendments to
IFRS 3
    
    Annual periods
beginning on or
after 1 July 2009
    
    This amendment will impact
the accounting for future
business combinations
effected after adoption of
the revised accounting
standard.
    
    Annual periods
beginning on or
after 1 July 2009IAS 32
    
    Financial
Instruments:
Presentation
    
    Amendments relating
to puttable
instruments and
obligations arising
from liquidation
    
    Annual periods
beginning on or
after 1 January
2009
    
    At present the Consolidated
Entity has no puttable
financial instruments as
defined under IAS 32
therefore the amendment
would have no impact for the
Consolidated Entity as at 31
December 2008.
    
    Annual periods
beginning on or
after 1 January
2009IAS 39
    
    Financial
Instruments:
Recognition and
Measurement.
    
    Amendments for
eligible hedged
items.
    
    Annual periods
beginning on or
after 1 July 2009.
    
    The Consolidated Entity has
not yet determined the
extent of the impact of
these amendments, if any.
    
    Annual periods
beginning on or
after 1 July 2009.
 86




---



##### 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
    
    EntityIFRIC 15
    
    Agreements for the
construction of
real estate.
    
    This interpretation
provides
clarification of
the accounting
    
    Annual periods
beginning on or
after 1 January
2009.
    
    Not applicable
    
    Annual periods
beginning on or
after 1 January
2009.for agreements for the
construction of
real estate.IFRIC 16
    
    Hedges of a net
investment in a
foreign operation.
    
    This interpretation
provides
clarification for
the accounting for
hedges of a net
investment in a
foreign operation.
    
    Annual periods
beginning on or
after 1 October
2009.
    
    The Consolidated Entity has
not yet determined the
extent of the impact of
these amendments, if any.
    
    Annual periods
beginning on or
after 1 October
2009.IFRIC 17
    
    Guidance on
distributions of
non-cash items to
owners
    
    This interpretation
provides
clarification for
the accounting for
distributions of
non cash items to
owners
    
    Annual periods
beginning on or
after 1 July 2009.
    
    Not applicable
    
    Annual periods
beginning on or
after 1 July 2009.Amendments to IFRS
    
    Various
    
    Improvements to
International
Financial Reporting
Standards
    
    Annual periods
beginning on or
after 1 January
2009
    
    The Consolidated Entity has
not yet determined the
extent of the impact of
these amendments, if any.
    
    Annual periods
beginning on or
after 1 January
2009
 87




---



##### Table of Contents



(e) Financial Results of Operations
 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME  Year ended December 31, 2008, 2007 and 2006
 $mNote
    
    
    2008
    
    
    2007(1)
    
    
    2006(1)Revenue
    
    
    6
    
    
    
    755.6
    
    
    
    498.4
    
    
    
    386.0Cost of sales
    
    
    8
    
    
    
    (451.3
    )
    
    
    (261.3
    )
    
    
    (211.0
    )Gross profit from mining operations
    
    
    
    
    
    
    304.3
    
    
    
    237.1
    
    
    
    175.0Corporate expense
    
    
    
    
    
    
    (31.9
    )
    
    
    (25.3
    )
    
    
    (12.1
    )Project studies
    
    
    
    
    
    
    (2.6
    )
    
    
    (7.5
    )
    
    
    (0.8
    )Exploration expense
    
    
    
    
    
    
    (8.5
    )
    
    
    (8.4
    )
    
    
    (5.9
    )Operating profit before other income / (expense)
    
    
    
    
    
    
    261.3
    
    
    
    195.9
    
    
    
    156.2Other income / (expense)Hedging loss
    
    
    9
    
    
    
    (75.5
    )
    
    
    (97.2
    )
    
    
    (78.3
    )Other income
    
    
    10
    
    
    
    0.3
    
    
    
    
    
    
    
    Other expenses
    
    
    10
    
    
    
    (31.3
    )
    
    
    (13.8
    )
    
    
    Operating profit before finance costs
    
    
    
    
    
    
    154.8
    
    
    
    84.9
    
    
    
    77.9Financial income
    
    
    11
    
    
    
    7.8
    
    
    
    10.9
    
    
    
    4.2Financial expenses
    
    
    11
    
    
    
    (0.6
    )
    
    
    (131.6
    )
    
    
    (6.2
    )Profit / (loss) before tax
    
    
    
    
    
    
    162.0
    
    
    
    (35.8
    )
    
    
    75.9Income tax benefit / (expense)
    
    
    12
    
    
    
    (51.8
    )
    
    
    11.7
    
    
    
    (21.0
    )Net profit / (loss) after tax
    
    
    
    
    
    
    110.2
    
    
    
    (24.1
    )
    
    
    54.9Attributable to equity holders of the Company
    
    
    
    
    
    
    109.3
    
    
    
    (24.1
    )
    
    
    54.9Attributable to minority interests
    
    
    28
    
    
    
    0.9
    
    
    
    110.2
    
    
    
    (24.1
    )
    
    
    54.9Other comprehensive incomeExchange difference on translation of foreign operations
    
    
    27
    
    
    
    (158.5
    )
    
    
    42.6
    
    
    
    Net change in fair value of cash flow hedges
    
    
    27
    
    
    
    (32.7
    )
    
    
    (59.1
    )
    
    
    (50.8
    )Deferred loss on cash flow hedges
    
    
    27
    
    
    
    76.7
    
    
    
    97.8
    
    
    
    Net change in fair value of available for sale financial assets
    
    
    27
    
    
    
    (2.2
    )
    
    
    1.2
    
    
    
    Income tax on other comprehensive income
    
    
    12
    
    
    
    (30.6
    )
    
    
    (4.9
    )
    
    
    20.4Other comprehensive income for the period net of tax
    
    
    
    
    
    
    (147.3
    )
    
    
    77.6
    
    
    
    (30.4
    )Total comprehensive income
    
    
    
    
    
    
    (37.1
    )
    
    
    53.5
    
    
    
    24.5Attributable to equity holders of the Company
    
    
    
    
    
    
    (38.0
    )
    
    
    53.5
    
    
    
    24.5Attributable to minority interests
    
    
    28
    
    
    
    0.9
    
    
    
    
    
    
    
    (37.1
    )
    
    
    53.5
    
    
    
    24.5Earnings / (loss) per share
    
    
    39- Basic (cents/share)
    
    
    
    
    
    
    5.3
    
    
    
    (1.4
    )
    
    
    4.2- Diluted (cents/share)
    
    
    
    
    
    
    5.3
    
    
    
    (1.4
    )
    
    
    4.2
 
 (1)
    
    Revised (refer Note 35 of the financial statements)*
    
    Refer to item 18 Financial Statements 88




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##### Table of Contents



Overview of operating results
      2008 Production Summary (Ozs)
 Operation
    
    FY 2008Lihir, PNG
    
    
    771,455Mt Rawdon, QLD
    
    
    53,592
    (1)Kirkalocka, WA
    
    
    9,442
    (2)Bonikro, Cote dIvoire
    
    
    36,735
    (3)Ballarat, VIC
    
    
    10,366Total
    
    
    881,590
 
 (1)
    
    The acquisition of Mt Rawdon was effective from 17 June 2008. Mt Rawdon poured
102,415 ounces of gold (full year 2008), with 53,592 ounces attributable to the
Consolidated Entity.(2)
    
    The acquisition of Kirkalocka was effective from 17 June 2008 with Kirkalocka
ceasing production on 14 August 2008. Kirkalocka poured 30,474 ounces of gold (full year
2008) with 9,442 ounces attributable to the Consolidated Entity.(3)
    
    The acquisition of Bonikro was effective from 17 June 2008 with the Bonikro
operation being commissioned in October 2008.      89




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##### Table of Contents




    
    Total revenue for the year rose by 52% to a record $756 million (2007 revenue of $498
million and 2006 revenue of $386 million), driven by a combination of higher production
(23%) and a higher gold price (29%). Carbon credits added around $4.5 million to revenue.
    
    Total cash operating cost, before depreciation and amortisation, totalled $367 million,
up 63% on the previous year (2007 cash operating costs of $225 million and 2006 cash
operating costs of $181 million). The increase reflected higher throughput, production and
sales volumes, increased fuel prices and adverse exchange rate movements. On a unit cost
basis, cost increases were less pronounced. Gross cash costs per ounce rose by 19% and
total cash costs by 34%.
    
    Mine EBITDA improved strongly for the year, rising 42% to $389 million ($273 million in
2007, in and $204 million 2006). This increase reflected the strong improvement in
operational performance at the Lihir operation and the contribution of the newly acquired
operations.
    
    Underlying profit was a record $185 million, up 54% on the previous year ($120 million
in 2007 and $66 million in 2006). Net profit after tax attributable to equity holders of
the Company was $109 million, up from a loss of $24 million in 2007 ($156.2 million profit
for 2006).
    
    Operating cash flows for the year were $212 million.
 Discussion and analysis of the statement of comprehensive income
 Revenue
    Cost of sales
     90




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##### Table of Contents



Corporate expenses
   Exploration
   Hedging loss
    Other expenses
   Exchange differences on translation of foreign operations
  Tax Expense
 Income tax
    91




---



##### Table of Contents



(1)
   Dividend withholding tax
  
 (1)
    
    Revised (refer Note 35 of the financial statements) Discussion and analysis of the statement of financial position
    92




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##### Table of Contents



Discussion and analysis of the statement of cash flows
    
    
    Lihir sustaining capital and Million Ounce Plant Upgrade  $141 million
    
    Ballarat operation infrastructure and development expenditure  $108 million
    
    Bonikro, Côte dIvoire  $27 million
  (f)
    
    Significant changes in the state of affairs
  
    
    In June 2008 the group acquired 100% of Equigold. Equigold has five subsidiary companies,
three of which are wholly owned and incorporated in Australia: Swindon Holdings Pty Ltd,
Stanmines Pty Ltd, and Kim Resources NL and two of which are majority owned and are
incorporated in Côte dIvoire: Equigold Mines Côte dIvoireSA (85% interest) and Equigold Côte
dIvoireSA (95% interest). Under the scheme of arrangement for the merger, Equigold
shareholders received 33 shares in the Company for every 25 Equigold shares held.The contribution from these entities for the period June 17, 2008  December 31, 2008 was $8.2
million net profit before tax and $5.2 million net profit after tax, before any adjustments
arising from the business combination, including acquired mineral reserve amortisation charges.
The consolidated results for these entities for the whole of the previous corresponding period
is impractical to disclose due to differences in reporting currencies and accounting policies.
    
    In December 2008, Equigold, Stanmines and Kim Resources changed their company type from no
liability companies to proprietary limited companies.
    
    In December 2008, the Consolidated Entity acquired an additional 5% interest in Equigold
Mines Côte dIvoire SA and 3% interest in Equigold Côte dIvoire SA from the respective
minority interests.
 93




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##### Table of Contents



B. Liquidity and Capital Resources
 (a) Liquidity
        94




---



##### Table of Contents



(b) Capital Expenditures
  Capital
Expenditure 2006  2008
 (in US$ millions)
    
    2008
    
    2007
    
    2006Lihir
    
    
    153.0
    
    
    
    156.5
    
    
    
    185.9Ballarat
    
    
    118.6
    
    
    
    65.9
    
    
    
    Bonikro
    
    
    27.6
    
    
    
    
    
    
    
    Côte dIvoire exploration
    
    
    2.3
    
    
    
    
    
    
    
    Mount Rawdon
    
    
    1.3
    
    
    
    
    
    
    
    Corporate
    
    
    1.3
    
    
    
    0.3
    
    
    
    1.8304.1
    
    
    
    222.7
    
    
    
    187.7
            Financial instruments
  95




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##### Table of Contents



C. Research and Development, Patents and Licenses, etc
  96




---



##### Table of Contents



D. Trend Information
            97




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##### Table of Contents



98




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##### Table of Contents



E. Off-Balance Sheet arrangements
  99




---



##### 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
    
    
    0.5
    
    
    
    0.3
    
    
    
    0.2
    
    
    
    
    
    
    
    Operating Lease
Obligations
    
    
    4.4
    
    
    
    2.2
    
    
    
    0.9
    
    
    
    1.2
    
    
    
    0.1Capital expenditure
commitments(i)
    
    
    96.9
    
    
    
    83.7
    
    
    
    13.2
    
    
    
    
    
    
    
    Purchase obligations (ii)
    
    
    51.7
    
    
    
    51.7
    
    
    
    
    
    
    
    
    
    
    
    Other Liabilities (ii)
    
    
    66.1
    
    
    
    29.3
    
    
    
    
    
    
    
    1.4
    
    
    
    35.4Total
    
    
    219.6
    
    
    
    167.2
    
    
    
    14.3
    
    
    
    2.6
    
    
    
    35.5
 
 (i)
    
    The major items of capital commitment are: Lihir Island ($82.4 million for the MOPU Project
and $4.9 million for other equipment purchases), Ballarat ($4.9 million water purification
plant and tailings storage upgrade and $1.2 million other equipment purchases), and Bonikro
($2.8 million dump trucks and other equipment).(ii)
    
    Purchase obligations consist of trade creditors of $45.5 million and employee service related
liabilities of $6.2 million.(iii)
    
    Other liabilities represents $55.3 million consisting of current and non-current provisions
on the consolidated balance sheet which represents certain employee, rehabilitation and other
provisions and deferred settlement payable of $10.8 million which represents the outstanding
payment on the acquisition of shares from minority interests. 100




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##### Table of Contents



G.
    
    Recently issued IFRS standards
 .
 101




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##### Table of Contents



Item 6. Directors, Senior Management and Employees
 
 A. Directors and senior management
 (a) Directors
  Dr Ross Garnaut
   Mr Arthur Hood
  Mr Bruce Brook
   Dr Peter Cassidy
   102




---



##### Table of Contents



Dr Mike Etheridge
   Mrs Winifred Kamit
   Mr Geoff Loudon
   Mr Alister Maitland
   103




---



##### Table of Contents



(b) Senior Management
  Name
    
    Age
    
    Position with the Company
    
    Year JoinedArthur Hood
    
    56
    
    Managing Director
    
    2005Phil Baker
    
    54
    
    Chief Financial Officer
    
    2007Noel Foley
    
    60
    
    Executive General Manager Lihir Operations
    
    2006Graham Folland
    
    51
    
    Executive General Manager Corporate Development
    
    2006Tim Fry
    
    45
    
    Executive General Manager, West Africa and Corporate Services
    
    2008Stuart MacKenzie
    
    48
    
    Group Secretary and General Counsel
    
    2006
 Arthur Hood :
 Phil Baker:
 Noel Foley:
 Graham Folland:
 Tim Fry:
 Stuart MacKenzie:
  104




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##### Table of Contents



B. Compensation
  
    
    Principles used to determine the nature and amount of remuneration;
    
    Details of remuneration;
    
    Service agreements; and
    
    Share-based compensation.
  (a) Principles used to determine the nature and amount of remuneration
 (1) Non-Executive Directors and the Chairman
 (A) Overview
      (B) Directors fees
  
    
    the Chairman of the Board: $300,000 per annum (with no
additional fee for service on any committees); and
    
    for the other non-executive directors:
 
    
    base fee: $100,000 per annum;
    
    fee for serving as Chairman of the Audit Committee: $27,500 per annum;
    
    fee for serving as Chair of other committees: $20,000 per annum; and
    
    fee for membership of a committee: $10,000 per annum (per committee),
  105




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##### Table of Contents




    
    the Chairman of the Board: $330.000 per annum (with additional fee for
service on any committees); and
    
    for the other non-executive directors:
    
    base fee: $110,000 per annum;
    
    fee for serving as Chairman of the Audit Committee: $30,250 per annum;
    
    fee for serving as Chair of other committees: $22,000 per annum; and
    
    fee for membership of a committee: $11,000 per annum (per committee)
  2008
    
    
    2007$
    
    
    $Dr Ross Garnaut (2) (3)
    
    
    282,787
    
    
    
    255,000Mr Bruce Brook (2)
    
    
    118,893
    
    
    
    107,350Dr Peter Cassidy (2)
    
    
    121,393
    
    
    
    107,500Dr Michael Etheridge (2)
    
    
    103,306
    
    
    
    71,735Mrs Winifred Kamit (1)
    
    
    121,393
    
    
    
    109,850Mr Geoff Loudon (1)
    
    
    112,350
    
    
    
    100,000Mr Alister Maitland (2)
    
    
    103,306
    
    
    
    71,735
  Audit
    
    
    Remuneration
    
    
    Safety and
    
    
    Sustainable
    
    
    TotalCommittee
    
    
    and Nomination
    
    
    Technical
    
    
    Development
    
    
    DirectorsBase fees
    
    
    fees
    
    
    Committee fees
    
    
    Committee fees
    
    
    Committee fees
    
    
    feesDr Ross Garnaut
    
    
    282,787
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    282,787Mr Bruce Brook
    
    
    94,262
    
    
    
    24,631
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    118,893Dr Peter Cassidy
    
    
    94,262
    
    
    
    
    
    
    
    9,044
    
    
    
    18,087
    
    
    
    
    
    
    
    121,393Dr Michael Etheridge
    
    
    94,262
    
    
    
    
    
    
    
    
    
    
    
    9,044
    
    
    
    
    
    
    
    103,306Mrs Winifred Kamit
    
    
    94,262
    
    
    
    
    
    
    
    9,044
    
    
    
    
    
    
    
    18,087
    
    
    
    121,393Mr Geoff Loudon
    
    
    94,262
    
    
    
    
    
    
    
    
    
    
    
    9,044
    
    
    
    9,044
    
    
    
    112,350Mr Alister Maitland
    
    
    94,262
    
    
    
    9,044
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    103,306
 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
 106




---



##### Table of Contents



Notes:(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.(3)
    
    The services of Dr Garnaut are provided through Dr Garnauts family company,
Maccullochella Pty Limited   (2) Managing Directors and Senior Executives
 (A) Overview
   
    
    competitive in structure and quantum with comparator organizations so as to
attract, retain and motivate appropriately qualified and experienced executives;
    
    acceptability to shareholders;
    
    performance linkage/alignment of executive compensation;
    
    transparency; and
    
    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; and
    
    attracts and retains high calibre executives.
  
    
    rewards capability and experience;
    
    reflects competitive reward for contribution to growth in shareholder wealth; and
    
    provides a clear structure for earning rewards.
  (B) Executive remuneration
  107




---



##### Table of Contents




    
    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
     108




---



##### Table of Contents



STI Target Level
    
    Managing Director
    
    Key management personnelAttainment of Target
    
    60% of Base package (before tax)
    
    40 % of Base package (before tax)
 Long-term incentives
  (b) Details of remuneration
 Amounts of remuneration
 Related Party Disclosures)
  
    
    Phil Baker Chief Financial Officer
 
    
    Mark Clark  Executive General Manager West Africa and Corporate Services (appointed June
17, 2008, resigned November 14, 2008)
 
    
    Noel Foley  Executive General Manager, PNG Operations
 
    
    Graham Folland  Executive General Manager Corporate Development
 
    
    Tim Fry  Executive General Manager West Africa and Corporate Services (appointed November
1, 2008)
 
    
    Morgan Hart  Executive General Manager Australia and Africa Operations (appointed June 17,
2008, resigned December 31, 2008)
 
    
    Peter Smith  Executive General Manager Australia and Africa Operations (appointed March
19, 2009)
 
    
    Stuart MacKenzie  Group Secretary and General Counsel
  
    
    Noel Foley  Executive General Manager, Operations
 109




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##### Table of Contents



Key management personnel and other executives of the Consolidated Entity
 Long-
    
    
    Share-term
    
    
    based2008
    
    Short-term employee benefits
    
    
    Post-employment benefits
    
    
    benefits
    
    
    paymentsNon
    
    
    
    
    
    
    
    
    
    
    LongCash salary
    
    
    Cash
    
    
    monetary
    
    
    
    
    
    
    
    
    
    
    serviceName
    
    and fees
    
    
    bonus
    
    
    benefits(4)
    
    
    Superannuation
    
    
    Other
    
    
    leave
    
    
    Share rights
    
    
    Total$
    
    
    $
    
    
    $
    
    
    $
    
    
    $
    
    
    $
    
    
    $
    
    
    $Non-executive directorsDr Ross Garnaut  
Chairman
    
    
    282,787
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    282,787Mr Bruce Brook
    
    
    118,893
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    118,893Dr Peter Cassidy
    
    
    121,393
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    121,393Dr Mike Etheridge
    
    
    103,306
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    103,306Mrs Winifred Kamit
    
    
    121,393
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    121,393Mr Geoff Loudon
    
    
    112,350
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    112,350Mr Alister Maitland
    
    
    103,306
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    103,306Sub-total Non-
executive


directors
    
    
    963,428
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    963,428Executive directorsArthur Hood
    
    
    1,403,782
    
    
    
    552,516
    
    
    
    9,422
    
    
    
    104,051
    
    
    
    
    
    
    
    19,868
    
    
    
    1,740,208
    
    
    
    3,829,847Other key management
personnelPhil Baker
    
    
    367,475
    
    
    
    70,767
    
    
    
    12,395
    (5)
    
    
    33,073
    
    
    
    
    
    
    
    2,074
    
    
    
    244,482
    
    
    
    730,266Mark Clark(1)
    
    
    166,158
    
    
    
    12,950
    
    
    
    2,355
    
    
    
    16,037
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    197,500Noel Foley
    
    
    277,505
    
    
    
    37,582
    
    
    
    
    
    
    
    85,251
    
    
    
    
    
    
    
    
    
    
    
    260,007
    
    
    
    660,345Graham Folland
    
    
    304,066
    
    
    
    59,939
    
    
    
    25,979
    (6)
    
    
    27,366
    
    
    
    
    
    
    
    2,817
    
    
    
    222,526
    
    
    
    642,693Tim Fry(2)
    
    
    51,907
    
    
    
    17,322
    
    
    
    
    
    
    
    4,672
    
    
    
    
    
    
    
    10
    
    
    
    
    
    
    
    73,911Morgan Hart(3)
    
    
    203,767
    
    
    
    45,032
    
    
    
    2,355
    
    
    
    16,276
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    267,430Stuart MacKenzie
    
    
    244,281
    
    
    
    46,930
    
    
    
    9,422
    
    
    
    21,985
    
    
    
    
    
    
    
    1,748
    
    
    
    183,017
    
    
    
    507,383Total Key
 management 

personnel compensation
    
    
    3,982,369
    
    
    
    843,038
    
    
    
    61,928
    
    
    
    308,711
    
    
    
    
    
    
    
    26,517
    
    
    
    2,650,240
    
    
    
    7,872,803
 
 Notes:(1)
    
    Mr Clark commenced employment with the Consolidated Entity on 17 June 2008 and ceased
employment with the Consolidated Entity on 31 October 2008.(2)
    
    Mr Fry commenced employment with the Consolidated Entity on 17 November 2008.(3)
    
    Mr Hart commenced employment with the Consolidated Entity on 17 June 2008 and ceased
employment with Consolidated Entity on 31 December 2008.(4)
    
    Non-monetary benefits include car parking, salary continuance, death and total permanent
disablement and motor vehicle benefits.(5)
    
    Included in the total non-monetary benefit is a car benefit of $2,973.(6)
    
    Included in the total non-monetary benefit is a car benefit of $16,576.  Name
    
    Fixed remuneration
    
    At risk - STI
    
    At risk - LTI2008
    
    2007
    
    2008
    
    2007
    
    2008
    
    2007Executive directors
of Lihir Gold LimitedArthur Hood
    
    
    20
    %
    
    
    22
    %
    
    
    12
    %
    
    
    14
    %
    
    
    68
    %
    
    
    64
    %Other key management
personnel of Consolidated
EntityPhil Baker
    
    
    33
    %
    
    
    30
    %
    
    
    13
    %
    
    
    11
    %
    
    
    54
    %
    
    
    59
    %Mark Clark
    
    
    33
    %
    
    
    
    
    
    
    13
    %
    
    
    
    
    
    
    54
    %
    
    
    Noel Foley
    
    
    33
    %
    
    
    30
    %
    
    
    13
    %
    
    
    11
    %
    
    
    54
    %
    
    
    59
    %
 110




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##### Table of Contents



Name
    
    Fixed remuneration
    
    At risk - STI
    
    At risk - LTI2008
    
    2007
    
    2008
    
    2007
    
    2008
    
    2007Graham Folland
    
    
    33
    %
    
    
    30
    %
    
    
    13
    %
    
    
    11
    %
    
    
    54
    %
    
    
    59
    %Tim Fry
    
    
    33
    %
    
    
    
    
    
    
    13
    %
    
    
    
    
    
    
    54
    %
    
    
    Morgan Hart
    
    
    33
    %
    
    
    
    
    
    
    13
    %
    
    
    
    
    
    
    54
    %
    
    
    Stuart MacKenzie
    
    
    33
    %
    
    
    30
    %
    
    
    13
    %
    
    
    11
    %
    
    
    54
    %
    
    
    59
    %
 (c) Service agreements
   Arthur Hood, Managing Director
    
    
    the Managing Directors base package;
    
    60% of the base package (to represent the Short Term Incentive component of
remuneration); and
    
    106.67% of the base package (to represent the Long Term Incentive component of
remuneration).
 Phil Baker, Chief Financial Officer
   st
 Mark Clark, Executive General Manager West Africa and Corporate Services
    Noel Foley, Executive General Manager
   st
 111




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##### Table of Contents



Graham Folland, Executive General Manager Corporate Development
   st
 Tim Fry, Executive General Manager West Africa and Corporate Services
    Morgan Hart, Executive General Manager Australia and Africa Operations
    Stuart MacKenzie, Group Secretary and General Counsel
   st
 (d) Share-based compensation
 Share Rights
  2008 Grant
     112




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##### Table of Contents



Name
    
    Number of share rights granted during the year
    
    
    Number of share rights vested during the year2008
    
    
    2007
    
    
    2008
    
    
    2007Directors of
Lihir Gold LimitedArthur Hood
    
    
    1,649,164
    
    
    
    1,535,255
    
    
    
    129,249
    
    
    
    49,208Other key
management personnel
of the Consolidated
EntityPhil Baker
    
    
    192,711
    
    
    
    251,786
    
    
    
    45,074
    
    
    
    N/AMark Clark
    
    Nil
    
    
    
    N/A
    
    
    Nil
    
    
    
    N/ANoel Foley
    
    
    183,644
    
    
    
    246,481
    
    
    
    41,996
    
    
    
    50,148Graham Folland
    
    
    158,705
    
    
    
    207,890
    
    
    
    33,355
    
    
    
    42,984Tim Fry
    
    Nil
    
    
    
    N/A
    
    
    Nil
    
    
    
    N/AMorgan Hart
    
    Nil
    
    
    
    N/A
    
    
    Nil
    
    
    
    N/AStuart MacKenzie
    
    
    136,033
    
    
    
    181,056
    
    
    
    30,989
    
    
    
    14,969
   (a)
    
    Exercise price: $ nil (2007  $ nil)(b)
    
    Expected volatility: 46.9% (2007  42%)(c)
    
    Risk-free interest rate: 6.8% (2007  6.12%)(d)
    
    Expected life of right (years): 10 years (2007  10 years)(e)
    
    Weighted average share price at grant date: $2.98 (2007  $3.08)(f)
    
    Expected dividend yield: 0% (2007  0%)
   113




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##### Table of Contents



Shares provided on exercise of share rights
  Name
    
    Date of exercise of share rights
    
    
    Number share rights exercised during the year2008
    
    
    2007Directors of Lihir
Gold LimitedArthur Hood
    
    Sep 2008
    
    
    129,249
    
    
    
    49,208Other key management
personnel of the
Consolidated EntityPhil Baker
    
    
    
    
    
    
    
    
    
    
    Mark Clark
    
    
    
    
    
    
    
    
    
    
    Noel Foley
    
    Sep 2008
    
    
    41,996
    
    
    
    50,148Graham Folland
    
    Sep 2008
    
    
    33,355
    
    
    
    42,984Tim Fry
    
    
    
    
    
    
    
    
    
    
    Morgan Hart
    
    
    
    
    
    
    
    
    
    
    Stuart MacKenzie
    
    Sep 2008
    
    
    30,989
    
    
    
    14,969
 114




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##### Table of Contents



C. Board of Directors
   
    
    setting the Companys values and standards of conduct, including in respect of safe
work practices, environmental compliance and social obligations, and ensuring that
these are adhered to in the interests of the Companys shareholders, employees,
customers, suppliers and the communities in which it operates;
    
    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 and ensuring
that the
necessary financial and human resources are in place for the Company to meet its
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, codes of conduct, and legal compliance;
    
    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.
   115




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##### Table of Contents



www.lglgold.com.
 (b) 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 the Managing Director should be
exercised by different individuals.
      116




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##### Table of Contents



Year AppointedName
    
    Position & Committee Memberships
    
    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 DevelopmentCommittee Member of 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
 (c) Board committees
  
    
    Audit;
    
    Remuneration and Nomination;
    
    Sustainable Development (formally Environmental and Lihir Impact Committee); and
    
    Safety and Technical.
  117




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##### Table of Contents



(1) Audit committee
  
    
    Mr Bruce Brook  Committee Chairman
    
    Dr Ross Garnaut
    
    Mr Alister Maitland
   
    
    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.
  (A) 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;
 118




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##### Table of Contents




    
    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.
   (B) Risk Oversight and Management
    (C) Management Assurances
      119




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##### Table of Contents



(2) 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;
    
    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;
    
    ensuring the Companys obligations in relation to employee benefits and
entitlements, including superannuation, are met; and
    
    recruitment, induction, promotion, retention, termination and other general
conditions of employment
     (3) Sustainable Development Committee
  
 120




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##### Table of Contents




    
    the interaction between the Companys activities and the local community, and the
ways in which these activities contribute to social and economic development;
    
    dealings with the local community in relation to land;
    
    maintaining and improving community health;
    
    the impact and associated risks of the Companys activities on the natural marine,
terrestrial and atmospheric environment;
    
    liaising with and monitoring any specialist advisory panels, working groups or
committees
    
    established for the purposes of sustainable development; and
    
    monitoring the Companys compliance with the applicable regulatory regimes including
both the Companys compliance with the relevant local and international emission
standards and controls and the Companys reporting obligations pursuant to those
standards and codes.
   (4) 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;
    
    review and monitoring of LGLs reserves and resources (including review of
statements made in compliance with the Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves (the JORC Code); and
    
    the status of major capital projects approved by the Board.
  121




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##### Table of Contents



D. Employees
  2008
    
    2007
    
    2006Lihir OperationManagement
    
    
    9
    
    
    
    10
    
    
    
    12Commercial,
human resources, towns and site services, community and environment
    
    
    373
    
    
    
    455
    
    
    
    450Mining operations and mine technical
    
    
    582
    
    
    
    570
    
    
    
    642Plant operations and maintenance
    
    
    1055
    
    
    
    879
    
    
    
    455Ballarat OperationManagement
    
    
    6
    
    
    
    9
    
    
    
    Commercial,
human resources, towns and site services, community and environment
    
    
    23
    
    
    
    10
    
    
    
    Mining operations and mine technical
    
    
    186
    
    
    
    83
    
    
    
    Plant operations and maintenance
    
    
    87
    
    
    
    
    
    
    
    Mt Rawdon OperationManagement
    
    
    1
    
    
    
    
    
    
    
    Commercial,
human resources, towns and site services, community and environment
    
    
    8
    
    
    
    
    
    
    
    Mining operations and mine technical
    
    
    74
    
    
    
    
    
    
    
    Plant operations and maintenance
    
    
    47
    
    
    
    
    
    
    
    Bonikro OperationManagement
    
    
    1
    
    
    
    
    
    
    
    Commercial,
human resources, towns and site services, community and environment
    
    
    46
    
    
    
    
    
    
    
    Mining operations and mine technical
    
    
    58
    
    
    
    
    
    
    
    Plant operations and maintenance
    
    
    136
    
    
    
    
    
    
    
    Lihir
Services Australia  BrisbaneVarious corporate support personnel
    
    
    99
    
    
    
    53
    
    
    
    28Côte dIvoire regional officeExploration site personnel
    
    
    2
    
    
    
    
    
    
    
    Various corporate support personnel
    
    
    10
    
    
    
    
    
    
    
    Total Company employees
    
    
    2,803
    
    
    
    2,069
    
    
    
    1,587Total contractors (full-time equivalent)
    
    
    1,893
    
    
    
    1,893
    
    
    
    2,250Total
    
    
    4,696
    
    
    
    3,962
    
    
    
    3,837
    122




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##### Table of Contents



E. Share Ownership
  Interest held by directors in shares of the CompanyRoss Garnaut
(Director)
    
    
    115,296
    (1)Arthur Hood
(Managing Director)
    
    
    519,726Bruce Brook
(Director)
    
    
    56,880
    (2)Peter Cassidy
(Director)
    
    
    46,074
    (3)Michael Etheridge
(Director)
    
    
    61,728
    (4)Geoffrey Loudon
(Director)
    
    
    143,840Winifred Kamit
(Director)
    
    
    2,667
    (5)Alister Maitland
(Director)
    
    
    82,637
    (6)
 
 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 Mrs GD 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.     123




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##### Table of Contents



Item 7. Major Shareholders and Related Party Transactions
 
 A. Major Shareholders
  Percentage/VotingSubstantial Shareholder
    
    Relevant Interest
    
    Power (%)Fidelity Management &
Research LLC and Fidelity
International Limited
    
    
    242,325,016
    
    
    
    11.07Commonwealth Bank of Australia
    
    
    237,985,334
    
    
    
    10.05Merril Lynch & Co Inc
    
    
    217,921,656
    
    
    
    9.96Nuveen Investments Inc
    
    
    214,819,596
    
    
    
    9.8BlackRock Group
    
    
    212,665,688
    
    
    
    9.72
 (a) Class B shares  Niugini Mining Limited
     124




---



##### Table of Contents



(b) PNG Government Participation and MRL Capital Limited Shareholding
       (c) American Depositary Shares
   (d) United States Resident Shareholders
  125




---



##### Table of Contents



(e) Share Options
  (f) Control
   
 B. Related Party Transactions
  
    
    Dr Garnaut was re-appointed as chairman 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 favor, 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. Interest of Experts and Counsel
  126




---



##### Table of Contents



Item 8. Financial Information
 
 A. Consolidated Statements and Other Financial Information
  (a) Export sales
    2008
    
    2007
    
    2006Export sales
    
    $
    M
    
    
    
    683.9
    
    
    
    492.3
    
    
    
    324.8Export volume
    
    oz's
    
    
    792,346
    
    
    
    707,339
    
    
    
    642,531Export volume as % of total
sales volume
    
    
    %
    
    
    
    91.2
    %
    
    
    99.8
    %
    
    
    100.0
    %
 (b) Legal or arbitration proceedings
  (c) Dividend distributions
  127




---



##### Table of Contents



B. Significant Changes
           128




---



##### Table of Contents



Item 9. The Offer and Listing
 
 A. Offer and Listing Details
      Year
    
    Ordinary Shares
    
    American Depositary SharesHigh
    
    Low
    
    High
    
    LowA$
    
    A$
    
    $
    
    $2004
    
    
    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
    
    
    
    21.702008
    
    
    4.37
    
    
    
    1.53
    
    
    
    39.95
    
    
    
    9.81
 Ordinary Shares
    
    American Depositary SharesQuarter Ending
    
    High
    
    Low
    
    High
    
    LowA$
    
    A$
    
    $
    
    $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
    
    March 31
    
    
    4.37
    
    
    
    3.59
    
    
    
    39.95
    
    
    
    31.57June 30
    
    
    3.29
    
    
    
    2.86
    
    
    
    31.87
    
    
    
    26.50September 30
    
    
    2.80
    
    
    
    1.75
    
    
    
    24.80
    
    
    
    13.93December 31
    
    
    3.13
    
    
    
    2.25
    
    
    
    21.93
    
    
    
    13.982009
    
    March 31
    
    
    3.29
    
    
    
    3.20
    
    
    
    22.79
    
    
    
    21.97
  129




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##### Table of Contents



Ordinary Shares
    
    American Depositary SharesHigh
    
    Low
    
    High
    
    LowA$
    
    A$
    
    $
    
    $December 08
    
    
    3.04
    
    
    
    2.98
    
    
    
    21.93
    
    
    
    13.98January 09
    
    
    3.16
    
    
    
    3.07
    
    
    
    21.93
    
    
    
    16.72February 09
    
    
    3.38
    
    
    
    3.29
    
    
    
    22.96
    
    
    
    19.33March 09
    
    
    3.29
    
    
    
    3.20
    
    
    
    23.95
    
    
    
    18.05April 09
    
    
    3.01
    
    
    
    3.00
    
    
    
    24.35
    
    
    
    19.51May 09
    
    
    3.30
    
    
    
    3.26
    
    
    
    24.44
    
    
    
    20.89
 130




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##### Table of Contents



Item 10. Additional Information
 
 A. Share Capital
  
 B. Memorandum and Articles of Association
  (a) 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.
    131




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##### 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.
  (b) Constitution
  
    
    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
    
    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
 132




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##### Table of Contents



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.
    
    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.
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
    
    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.
    
    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.
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
    
    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.
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C. Material Contracts
 (a) General Operational Agreements
 (1) Pressure
Oxidation Technology License.
  (2) Lihir
management
  (b) Ballarat Goldfields merger
 (1) Merger Implementation Agreement
 Corporations Act Corporations Act
 (2) Share
Subscription Agreement
  (3) Deed
Poll
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(4) Completion
  (c) Equigold merger
 (1) 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;
    
    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 authorization 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.
 (2) Deed
Poll
  (3) Completion
  (d) Integrated Benefits Package
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(e) Revised Integrated Benefits Package
  (f) Lihir operation blasting services contracts
  
   (g) Ballarat Goldfields contracts
 (1) Spinifex
Projects Pty Ltd & Gekko Systems Pty Ltd
   (2) Ballarat
Goldfields Mining Contract  Pybar Mining Services Pty Ltd
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(h) Lihir operation geothermal coring contract  Washingtons Drilling (International)
Limited
   (j) AGR Matthey gold refining contract
   (k) Metalor Gold Refining Contract
  (l) Million Ounce Plant Upgrade Project (MOPU) Contracts
  (1) Oxygen
Plant Contract
  (2) Autoclave
Contract
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(3) Grinding
Mills
  140




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D. Exchange Controls
   a)
    
    to comply with any conditions or approvals issued by the Central Bank before September 3, 2007;b)
    
    obtain prior approval from the Central Bank to operate a bank account outside PNG;c)
    
    to obtain prior approval from the Central Bank to give a guarantee or to grant security to a
non-resident where there is no direct benefit to the resident entity or its business in PNG;
andd)
    
    to report certain transactions (by lodgment of the prescribed forms) to the Central Bank for
example reporting any physical commodity exports from PNG.
  a)
    
    proceeds from the sale of mining products;b)
    
    the proceeds of bank loans and insurance policies in an aggregate amount, sufficient to pay
threemonths anticipated loan servicing obligations;c)
    
    payments for goods and services to persons resident outside of PNG;d)
    
    dividends to non-PNG shareholders; ande)
    
    payments for certain approved reductions in share capital.
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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.
  (a) Taxation of Dividends
 
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(b) Taxation of Capital Gains
  (c) PFIC Rules
   143




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(d) 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.
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
    
    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. Statements by Experts
  
 H. Documents on Display
   
 I. Subsidiary Information
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Item 11. Quantitative and Qualitative Disclosure about Market Risk
  A. Quantitative Information about Market Risk
   B. Qualititative Information about Market Risk
   DeliveryDate
    
    Ounces31/03/2009
    
    30,67830/06/2009
    
    15,33930/09/2009
    
    14,14931/12/2009
    
    14,14931/03/2010
    
    14,14930/06/2010
    
    14,14930/09/2010
    
    13,184115,797
      Item 12. Description of Securites Other than Equity Securities
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PART II
 
 Item 13. Defaults, Dividend Arrerages and Delinquencies
  
 Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
  
 Item 15. Controls and Procedures
 
 A. Evaluation of Disclosure Controls and Procedures
   
 B. Managements Report on Internal Control over Financial Reporting
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C. Attestation Report of the Registered Public Accounting Firm
  
 D. Changes in Internal Control Over Financial Reporting
   
    
    Hired a taxation specialist with a strong background in interpreting and applying tax
accounting literature, as well as the application of IFRS accounting principles to complex
and non-routine transactions.
    
    Engaged external taxation consultants with the specialist skills in Papua New Guinea Tax
law, to work with the above specialist on reviewing historic tax returns, and ensuring all
returns are fully up to date.
    
    Strengthened reconciliation controls between tax and book values of assets.
    
    Improved the fixed asset register with greater functionality for recording tax vs. book
value for assets.
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Item 16A. Audit Committee Financial Expert
   
 Item 16B. Code of Ethics
  §
    
    Code of Conduct§
    
    Conflicts of Interest Policy§
    
    Whistleblower Policy & Procedure§
    
    Market & Shareholder Communication Policy§
    
    Continuous Disclosure Policy§
    
    Board Communications Policy
  (a) Code of Conduct
 
 
    
    Compliance with laws
    
    Dealing with public officials
    
    Giving or receiving gifts or benefits
    
    Conflicts of interests
    
    Confidentiality
    
    Insider Trading
    
    Information Systems
    
    Financial controls and records
    
    Sustainability
    
    Equal Opportunity, employee harassment and discrimination
    
    Occupational Health and Safety
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(b) Conflicts of Interest Policy
  
    
    A definition of what is a conflict of interest
    
    A procedure to facilitate the disclosure of the conflict of interest
    
    A procedure to allow the standing notification of a conflict of interest; and
    
    Steps to be taken to handle the conflict of interest.
 (c) Whistleblower Policy & Procedure
   (d) Market and Shareholder Communication Policy
   
    
    A plain English description of the Companys obligations under ASX Listing Rule
3.1 (the continuous disclosure obligation) and its parallel application on the other
markets on which LGL securities are traded (namely POMSoX, NASDAQ and TSX).
    
    Commitments by LGL to use multiple delivery systems to ensure stakeholders are
informed about the business, including email, internet and the LGL website.
    
    Initiatives to promote shareholder participation at general meetings including
advanced notice, multimedia presentations, efficient streamlined proxy appointment
processes and information sessions.
    
    A commitment by LGL to self-assess its corporate governance practices against the
ASX Corporate Governance Councils Principles for Good Corporate Governance and
report the outcome in the LGL annual report.
 (e) Continuous Disclosure Policy
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
    
    A plain English definition of price sensitive information, including several
examples.
    
    The establishment of a Disclosure Committee which is tasked with deciding what
information is to be disclosed to the market, co-ordination of disclosure between
the various markets, regulators, analysts and the website, overseeing the education
of the business on LGLs disclosure obligations and monitoring of compliance with
this policy. The Disclosure Committee is made up of (a minimum of two of) the CEO,
CFO, Group Secretary and GM Corporate Affairs.
    
    A process to follow for market speculation or rumors, including responding to
regulator enquiries; and
    
    The policy on release of price sensitive information to analysts, investors and
the media.
 (f) Board Communications Policy
   (a)
    
    any major events at an LGLs operation likely to have a material impact on production
or the general functioning of that operation (which may trigger the continuous disclosure
policy).(b)
    
    any significant event at an LGLs operation that, may have the effect of reducing or
limiting production or result in the urgent need for additional unforseen capital
expenditure;(c)
    
    any event which is likely to impact negatively on a supplier or contractor to LGL
requiring LGL to either adopt contingencies or engage alternative suppliers;(d)
    
    any significant safety, environmental, industrial or community incident;
(e) financial matters that significantly affect the company or need to be discussed;(f)
    
    industrial relations issues (or employment issues generally) that have the short term
potential to negatively impact on an LGL operation (such as news of an impending strike);
or(g)
    
    any event that is considered prudent by Executive Employees or the Group Secretary to
inform the Board.
  
    
    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;
    
    high standards of proprietary when dealing in any tradable securities of the Company,
including shares, options and prescribed interests.
    
    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.
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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.
   2008 Fees
    
    2007 Fees
    
    2006 FeesServices provided
    
    $000
    
    $000
    
    $000Audit fees
    
    
    1,197
    
    
    
    685
    
    
    
    455Audit-related fees
    
    
    422
    
    
    
    642
    
    
    
    112Tax fees
    
    
    141
    
    
    
    54
    
    
    
    79
  
    
    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;
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
    
    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.
 
 Item 16D. Exceptions from Listing Standards for Audit Committees
  
 Item 16E. Purchases of Equity Securities by Issue and Affiliates
 Total number of
    
    Maximum number (orshares purchased
    
    approximate dollar value) ofAverage price
    
    as part of publicly
    
    shares that may yet beTotal number of
    
    paid per share
    
    announced plans
    
    purchased under the plansPeriod
    
    shares purchased
    
    (A$)
    
    or programs
    
    or programsSeptember 2008
    
    546,575(1)
    
    $
    2.74744
    
    
    
    564,575
    
    
    Nil
 
 (1)
    
    546,575 shares purchased on market in accordance with the 2007 Lihir Executive Share Plan
(LESP), announced by invitation letter to all participants dated January, 31 2007. For
further information see Item 6B. Compensation  (d) Share based compensation. 
 Item 16 F. Change in the Registrants Certifying Accountant
  
 Item 16G. Corporate Governance
  
    
    In 1995, the Company was granted an exemption with respect to the quorum requirement
under NASDAQ Marketplace Rule 4350(f), now rule 5620, 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 complies with the quorum requirements set forth in Item
10.B (b) above.
    
    Rule 5605 requires independent directors to have regularly scheduled meetings at which
only independent directors are present. During 2008, the Chairman organized two
Non-Executive Director (NED) meeting sessions to facilitate NED discussions in the absence
of management. NED sessions are regularly held in conjunction with scheduled Board
meetings.
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PART
III
 
 Item 17. Financial Statements
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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BCM
    
    Bank Cubic Meter (a volume of material in its insitu state).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 resource/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
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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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.
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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Mineable
    
    The portion of a resource 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
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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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ROM
    
    Run of mine pads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
 159




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##### Table of Contents



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
 160




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##### Table of Contents



Conversion Table and Unit Equivalent
 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 pounds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
 161




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##### Table of Contents



Item 18. Financial Statements
 FINANCIAL STATEMENTS LIHIR GOLD LIMITED
 Audited Financial Statements
 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
    
    
    F-A-1CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
    
    
    F-1CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
    
    
    F-2CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
    
    
    F-3CONSOLIDATED STATEMENTS OF CASH FLOW
    
    
    F-5NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
    
    
    F-6
 162




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##### Table of Contents



PricewaterhouseCoopers
ABN 52 780 433 757
 
 
 Report of Independent Registered Public Accounting Firm
  Internal Control  Integrated Framework
  -F-A-1




---



##### Table of Contents



-F-A-2




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##### Table of Contents



LIHIR GOLD LIMITED
 
 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
 Year ended 31 December 2008
 $mNote
    
    
    2008
    
    
    2007(1)
    
    
    2006(1)Revenue
    
    
    6
    
    
    
    755.6
    
    
    
    498.4
    
    
    
    386.0Cost of sales
    
    
    8
    
    
    
    (451.3
    )
    
    
    (261.3
    )
    
    
    (211.0
    )Gross profit from mining operations
    
    
    
    
    
    
    304.3
    
    
    
    237.1
    
    
    
    175.0Corporate expense
    
    
    
    
    
    
    (31.9
    )
    
    
    (25.3
    )
    
    
    (12.1
    )Project studies
    
    
    
    
    
    
    (2.6
    )
    
    
    (7.5
    )
    
    
    (0.8
    )Exploration expense
    
    
    
    
    
    
    (8.5
    )
    
    
    (8.4
    )
    
    
    (5.9
    )Operating profit before other income / (expense)
    
    
    
    
    
    
    261.3
    
    
    
    195.9
    
    
    
    156.2Other income / (expense)Hedging loss
    
    
    9
    
    
    
    (75.5
    )
    
    
    (97.2
    )
    
    
    (78.3
    )Other income
    
    
    10
    
    
    
    0.3
    
    
    
    
    
    
    
    Other expenses
    
    
    10
    
    
    
    (31.3
    )
    
    
    (13.8
    )
    
    
    Operating profit before finance costs
    
    
    
    
    
    
    154.8
    
    
    
    84.9
    
    
    
    77.9Financial income
    
    
    11
    
    
    
    7.8
    
    
    
    10.9
    
    
    
    4.2Financial expenses
    
    
    11
    
    
    
    (0.6
    )
    
    
    (131.6
    )
    
    
    (6.2
    )Profit / (loss) before tax
    
    
    
    
    
    
    162.0
    
    
    
    (35.8
    )
    
    
    75.9Income tax benefit / (expense)
    
    
    12
    
    
    
    (51.8
    )
    
    
    11.7
    
    
    
    (21.0
    )Net profit / (loss) after tax
    
    
    
    
    
    
    110.2
    
    
    
    (24.1
    )
    
    
    54.9Attributable to equity holders of the Company
    
    
    
    
    
    
    109.3
    
    
    
    (24.1
    )
    
    
    54.9Attributable to minority interests
    
    
    28
    
    
    
    0.9
    
    
    
    110.2
    
    
    
    (24.1
    )
    
    
    54.9Other comprehensive incomeExchange difference on translation of foreign operations
    
    
    27
    
    
    
    (158.5
    )
    
    
    42.6
    
    
    
    Net change in fair value of cash flow hedges
    
    
    27
    
    
    
    (32.7
    )
    
    
    (59.1
    )
    
    
    (50.8
    )Deferred loss on cash flow hedges
    
    
    27
    
    
    
    76.7
    
    
    
    97.8
    
    
    
    Net change in fair value of available for sale financial assets
    
    
    27
    
    
    
    (2.2
    )
    
    
    1.2
    
    
    
    Income tax on other comprehensive income
    
    
    12
    
    
    
    (30.6
    )
    
    
    (4.9
    )
    
    
    20.4Other comprehensive income for the period net of tax
    
    
    
    
    
    
    (147.3
    )
    
    
    77.6
    
    
    
    (30.4
    )Total comprehensive income
    
    
    
    
    
    
    (37.1
    )
    
    
    53.5
    
    
    
    24.5Attributable to equity holders of the Company
    
    
    
    
    
    
    (38.0
    )
    
    
    53.5
    
    
    
    24.5Attributable to minority interests
    
    
    28
    
    
    
    0.9
    
    
    
    
    
    
    
    (37.1
    )
    
    
    53.5
    
    
    
    24.5Earnings / (loss) per share
    
    
    39- Basic (cents/share)
    
    
    
    
    
    
    5.3
    
    
    
    (1.4
    )
    
    
    4.2- Diluted (cents/share)
    
    
    
    
    
    
    5.3
    
    
    
    (1.4
    )
    
    
    4.2
 
 (1)
    
    Revised (refer Note 35)  -F- 1 -




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##### Table of Contents



LIHIR GOLD LIMITED
 
 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
 As at 31 December 2008
 $m1 January2007(1)
    
    
    2007(1)Note
    
    
    2008
    
    
    Revised
    
    
    RevisedASSETSCURRENT ASSETSCash and cash equivalents
    
    
    13
    
    
    
    64.7
    
    
    
    174.2
    
    
    
    47.0Receivables
    
    
    15
    
    
    
    21.0
    
    
    
    14.9
    
    
    
    4.6Inventories
    
    
    16
    
    
    
    140.0
    
    
    
    102.8
    
    
    
    75.3Derivative financial instruments
    
    
    24
    (g)
    
    
    0.4
    
    
    
    
    
    
    
    0.3Other assets
    
    
    
    
    
    
    5.1
    
    
    
    2.3
    
    
    
    5.5Total current assets
    
    
    
    
    
    
    231.2
    
    
    
    294.2
    
    
    
    132.7NON-CURRENT ASSETSReceivables
    
    
    15
    
    
    
    0.4
    
    
    
    0.4
    
    
    
    0.5Inventories
    
    
    16
    
    
    
    255.0
    
    
    
    169.1
    
    
    
    141.7Derivative financial instruments
    
    
    24
    (g)
    
    
    0.3
    
    
    
    
    
    
    
    2.4Deferred mining costs
    
    
    17
    
    
    
    259.5
    
    
    
    218.3
    
    
    
    148.3Property plant and equipment
    
    
    18
    
    
    
    2,166.2
    
    
    
    1,425.0
    
    
    
    951.2Intangible assets
    
    
    19
    
    
    
    417.3
    
    
    
    93.5
    
    
    
    Available-for-sale financial assets
    
    
    20
    
    
    
    2.3
    
    
    
    2.5
    
    
    
    33.0Deferred income tax asset
    
    
    12
    
    
    
    31.6
    
    
    
    101.3
    
    
    
    93.6Investments in subsidiaries
    
    
    29
    
    
    
    
    
    
    
    
    
    
    
    Total non-current assets
    
    
    
    
    
    
    3,132.6
    
    
    
    2,010.1
    
    
    
    1,370.7Total assets
    
    
    
    
    
    
    3,363.8
    
    
    
    2,304.3
    
    
    
    1,503.4LIABILITIESCURRENT LIABILITIESAccounts payable & accrued liabilities
    
    
    21
    
    
    
    102.1
    
    
    
    64.0
    
    
    
    46.6Provisions
    
    
    22
    
    
    
    18.5
    
    
    
    13.5
    
    
    
    6.4Borrowings and finance facilities
    
    
    23
    
    
    
    0.3
    
    
    
    0.3
    
    
    
    62.5Derivative financial instruments
    
    
    24
    (g)
    
    
    33.5
    
    
    
    
    
    
    
    61.5Income tax payable
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.3Deferred settlement payable
    
    
    25
    
    
    
    10.8
    
    
    
    
    
    
    
    Total current liabilities
    
    
    
    
    
    
    165.2
    
    
    
    77.8
    
    
    
    177.3NON-CURRENT LIABILITIESProvisions
    
    
    22
    
    
    
    36.8
    
    
    
    15.2
    
    
    
    14.2Borrowings and finance facilities
    
    
    23
    
    
    
    0.2
    
    
    
    0.7
    
    
    
    218.6Derivative financial instruments
    
    
    24
    (g)
    
    
    18.9
    
    
    
    
    
    
    
    274.0Deferred income tax liability
    
    
    12
    
    
    
    215.2
    
    
    
    42.1
    
    
    
    Total non-current liabilities
    
    
    
    
    
    
    271.1
    
    
    
    58.0
    
    
    
    506.8Total liabilities
    
    
    
    
    
    
    436.3
    
    
    
    135.8
    
    
    
    684.1NET ASSETS
    
    
    
    
    
    
    2,927.5
    
    
    
    2,168.5
    
    
    
    819.3EQUITYShare capital
    
    
    26
    
    
    
    3,080.0
    
    
    
    2,319.7
    
    
    
    1,027.1Reserves
    
    
    27
    
    
    
    (312.6
    )
    
    
    (170.0
    )
    
    
    (250.7
    )Retained earnings
    
    
    27
    
    
    
    128.1
    
    
    
    18.8
    
    
    
    42.9Total equity attributable to equity holders of the Company
    
    
    
    
    
    
    2,895.5
    
    
    
    2,168.5
    
    
    
    819.3Minority interests
    
    
    28
    
    
    
    32.0
    
    
    
    
    
    
    
    TOTAL EQUITY
    
    
    
    
    
    
    2,927.5
    
    
    
    2,168.5
    
    
    
    819.3
 
 (1)
    
    Revised (refer Note 35)  -F- 2 -




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##### Table of Contents



LIHIR GOLD LIMITED
 
 CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
 Year ended 31 December 2008
 Attributable to equity holders of the CompanyIssued
    
    
    
    
    
    Retained
    
    
    
    
    
    Minority
    
    TotalCapital
    
    Reserves
    
    Earnings
    
    Total(1)
    
    interest
    
    Equity(1)$m
    
    $m
    
    $m
    
    $m
    
    $m
    
    $mBalance at 1 January 2006
    
    
    1,027.5
    
    
    
    (225.7
    )
    
    
    (18.3
    )
    
    
    783.5
    
    
    
    
    
    
    
    783.5Correction of prior year error
    
    
    
    
    
    
    
    
    
    
    6.3
    
    
    
    6.3
    
    
    
    
    
    
    
    6.3Revised balance(1)
    
    
    1,027.5
    
    
    
    (225.7
    )
    
    
    (12.0
    )
    
    
    789.8
    
    
    
    
    
    
    
    789.8Total comprehensive income / (expense) for
the period(1)
    
    
    
    
    
    
    (30.4
    )
    
    
    54.9
    
    
    
    24.5
    
    
    
    
    
    
    
    24.5Share based payments to employees and other
parties
    
    
    
    
    
    
    5.5
    
    
    
    
    
    
    
    5.5
    
    
    
    
    
    
    
    5.5Deferred tax on share based payments to
employees
    
    
    
    
    
    
    (0.1
    )
    
    
    
    
    
    
    (0.1
    )
    
    
    
    
    
    
    (0.1
    )Purchase of treasury shares
    
    
    (0.4
    )
    
    
    
    
    
    
    
    
    
    
    (0.4
    )
    
    
    
    
    
    
    (0.4
    )Balance at 31 December 2006
    
    
    1,027.1
    
    
    
    (250.7
    )
    
    
    42.9
    
    
    
    819.3
    
    
    
    
    
    
    
    819.3Balance at 1 January 2007
    
    
    1,027.1
    
    
    
    (250.7
    )
    
    
    42.9
    
    
    
    819.3
    
    
    
    
    
    
    
    819.3Total comprehensive income / (expense) for
the period(1)
    
    
    
    
    
    
    77.6
    
    
    
    (24.1
    )
    
    
    53.5
    
    
    
    
    
    
    
    53.5Share based payments to employees
    
    
    
    
    
    
    2.9
    
    
    
    
    
    
    
    2.9
    
    
    
    
    
    
    
    2.9Deferred tax on share based payments to
employees
    
    
    
    
    
    
    0.2
    
    
    
    
    
    
    
    0.2
    
    
    
    
    
    
    
    0.2Issue of shares  on acquisition of Ballarat
    
    
    316.5
    
    
    
    
    
    
    
    
    
    
    
    316.5
    
    
    
    
    
    
    
    316.5Issue of shares  rights issue/placement
(net of transaction costs)
    
    
    977.4
    
    
    
    
    
    
    
    
    
    
    
    977.4
    
    
    
    
    
    
    
    977.4Purchase of treasury shares
    
    
    (1.3
    )
    
    
    
    
    
    
    
    
    
    
    (1.3
    )
    
    
    
    
    
    
    (1.3
    )Balance at 31 December 2007
    
    
    2,319.7
    
    
    
    (170.0
    )
    
    
    18.8
    
    
    
    2,168.5
    
    
    
    
    
    
    
    2,168.5Balance at 1 January 2008
    
    
    2,319.7
    
    
    
    (170.0
    )
    
    
    18.8
    
    
    
    2,168.5
    
    
    
    
    
    
    
    2,168.5Total comprehensive income / (expense) for
the period
    
    
    
    
    
    
    (147.3
    )
    
    
    109.3
    
    
    
    (38.0
    )
    
    
    0.9
    
    
    
    (37.1
    )Share based payments to employees
    
    
    
    
    
    
    4.7
    
    
    
    
    
    
    
    4.7
    
    
    
    
    
    
    
    4.7Deferred tax on share based payments to
employees
    
    
    
    
    
    
    0.8
    
    
    
    
    
    
    
    0.8
    
    
    
    
    
    
    
    0.8
 -F- 3 -




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##### Table of Contents



LIHIR GOLD LIMITED
 CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
 Year ended 31 December 2008
 Attributable to equity holders of the CompanyIssued
    
    
    
    
    
    Retained
    
    
    
    
    
    Minority
    
    TotalCapital
    
    Reserves
    
    Earnings
    
    Total(1)
    
    interest
    
    Equity(1)$m
    
    $m
    
    $m
    
    $m
    
    $m
    
    $mMinority interest on acquisition of
subsidiaries
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    49.1
    
    
    
    49.1Purchase of minority interests
    
    
    
    
    
    
    4.4
    
    
    
    
    
    
    
    4.4
    
    
    
    (18.0
    )
    
    
    (13.6
    )Issue of shares  on acquisition of
Equigold NL
    
    
    756.0
    
    
    
    
    
    
    
    
    
    
    
    756.0
    
    
    
    
    
    
    
    756.0Issue of shares  MRL Capital Limited
    
    
    5.2
    
    
    
    (5.2
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Purchase of treasury shares
    
    
    (0.9
    )
    
    
    
    
    
    
    
    
    
    
    (0.9
    )
    
    
    
    
    
    
    (0.9
    )Balance at 31 December 2008
    
    
    3,080.0
    
    
    
    (312.6
    )
    
    
    128.1
    
    
    
    2,895.5
    
    
    
    32.0
    
    
    
    2,927.5
 
 (2)
    
    Revised (refer Note 35)  -F- 4 -




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##### Table of Contents



LIHIR GOLD LIMITED
 
 CONSOLIDATED STATEMENTS OF CASH FLOW
 Year ended 31 December 2008
 $mNote
    
    
    2008
    
    
    2007
    
    
    2006CASH FLOWS FROM OPERATING ACTIVITIESReceipts from customers
    
    
    
    
    
    
    747.7
    
    
    
    472.4
    
    
    
    329.3Payments arising from suppliers & employees
    
    
    
    
    
    
    (539.7
    )
    
    
    (365.9
    )
    
    
    (268.7
    )Cash generated from operations
    
    
    
    
    
    
    208.0
    
    
    
    106.5
    
    
    
    60.6Purchase of gold to close out hedge book
    
    
    
    
    
    
    
    
    
    
    (648.4
    )
    
    
    Receipts on close out of hedge book
    
    
    
    
    
    
    
    
    
    
    279.9
    
    
    
    Income tax refund received
    
    
    
    
    
    
    4.6
    
    
    
    
    
    
    
    Interest and finance charges paid
    
    
    
    
    
    
    (0.2
    )
    
    
    (8.0
    )
    
    
    (3.3
    )Net cash flow from operating activities
    
    
    14
    
    
    
    212.4
    
    
    
    (270.0
    )
    
    
    57.3CASH FLOWS FROM INVESTING ACTIVITIESInterest received
    
    
    
    
    
    
    3.5
    
    
    
    9.7
    
    
    
    1.4Purchase of property plant and equipment
    
    
    
    
    
    
    (277.9
    )
    
    
    (206.7
    )
    
    
    (170.8
    )Interest and financing charges capitalized
    
    
    
    
    
    
    (2.9
    )
    
    
    
    
    
    
    Proceeds on disposal of property, plant & equipment
    
    
    
    
    
    
    0.1
    
    
    
    
    
    
    
    0.1Payments for acquisition of minority interests
    
    
    
    
    
    
    (2.8
    )
    
    
    
    
    
    
    Payments for investments
    
    
    
    
    
    
    
    
    
    
    (1.2
    )
    
    
    (34.0
    )Acquisition of subsidiary net of cash acquired
    
    
    30
    
    
    
    9.1
    
    
    
    19.6
    
    
    
    Net cash flow from investing activities
    
    
    
    
    
    
    (270.9
    )
    
    
    (178.6
    )
    
    
    (203.3
    )CASH FLOWS FROM FINANCING ACTIVITIESDrawdown of secured debt
    
    
    
    
    
    
    
    
    
    
    22.4
    
    
    
    65.6Repayment of secured debt
    
    
    
    
    
    
    (0.4
    )
    
    
    (88.2
    )
    
    
    Repayment of gold loan
    
    
    
    
    
    
    
    
    
    
    (333.4
    )
    
    
    Proceeds of equity issue
    
    
    
    
    
    
    
    
    
    
    989.0
    
    
    
    Underwriting expenses
    
    
    
    
    
    
    
    
    
    
    (11.6
    )
    
    
    Advance to subsidiary pre acquisition
    
    
    
    
    
    
    (49.7
    )
    
    
    
    
    
    
    Payment for treasury shares
    
    
    
    
    
    
    (0.9
    )
    
    
    (1.3
    )
    
    
    (0.4
    )Net cash flow from financing activities
    
    
    
    
    
    
    (51.0
    )
    
    
    576.9
    
    
    
    65.2Net increase / (decrease) in cash and cash equivalents
    
    
    
    
    
    
    (109.5
    )
    
    
    128.3
    
    
    
    (80.8
    )Cash and cash equivalents at beginning of year
    
    
    
    
    
    
    174.2
    
    
    
    47.0
    
    
    
    127.8Effects of exchange rate changes to cash held
    
    
    
    
    
    
    
    
    
    
    (1.1
    )
    
    
    Cash and cash equivalents at end of year
    
    
    13
    
    
    
    64.7
    
    
    
    174.2
    
    
    
    47.0
  -F- 5 -




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##### Table of Contents



LIHIR GOLD LIMITED
  NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
    (i) Basis of preparation
    1.
    
    derivative financial instruments are measured at fair value2.
    
    financial instruments at fair value through profit and loss are measured at fair value3.
    
    available for sale financial assets are measured at fair value.
  (ii) Consolidation
     -F- 6 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
   (iii) Joint ventures
  (iv) Exploration and evaluation expenditure
   (v) Development properties
    (vi) Mine properties
     -F- 7 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
   (vii) Deferred mining costs
       (viii) Capitalisation of interest and financing costs
   (ix) Property, plant and equipment
 Cost and valuation
 -F- 8 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
  Depreciation and amortisation
   Approximate
    
    Approximatepercentage
    
    percentagedepreciated as
    
    depreciated asFixed asset classification
    
    unit-of-use
    
    straight-line
    
    Depreciation rateDeferred expenditure
    
    
    100
    %
    
    
    
    
    
    Based on applicable reservesLand & buildings
    
    
    100
    %
    
    
    
    
    
    Based on applicable reservesPlant & equipment
    
    
    85
    %
    
    
    15
    %
    
    2  20 yearsTotal average
    
    
    90
    %
    
    
    10
    %
    
    
    
    -F- 9 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
   (x) Intangible assets
 Licences and exploration rights
  Mining information
  Land owner share grants
  Goodwill
    (xi) Inventories
     -F- 10 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
   (xii) Impairment of assets
    (xiii) Restoration, rehabilitation and environmental expenditure
    (xiv) Leases
 Lihir Gold Limited as Lessee
   -F- 11 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
   (xv) Receivables
  (xvi) Payables
  (xvii) Borrowings
   (xviii) Other non-derivative financial instruments
   Held to maturity investments
  Available-for-sale financial assets
  -F- 12 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
  Financial assets at fair value through profit or loss
  Other
  (xix) Derivative financial instruments and hedging activities
   (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); or(3)
    
    hedges of a net investment in a foreign operation (net investment hedge).
    -F- 13 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 Cash flow hedges
          Net investment hedges
  -F- 14




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 Derivatives that do not qualify for hedge accounting
  Hedge book re-structure
  (xx) Share capital
   (xxi) Share-based payments
  1.
    
    The Lihir Executive Share Plan (the LESP), which provides benefits to the executives of the
Company; and2.
    
    Share issues made to local Lihirian landowners through MRL Capital Limited (MRL).
 Executive share plan
       -F- 15 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 Share-based payments to local Lihirian landowners
   (xxii) Revenue recognition
  1.
    
    the product is in a form suitable for delivery and no further processing is required by, or
on behalf of, the Consolidated Entity;2.
    
    the quantity and quality (grade) of the product can be determined with reasonable accuracy;3.
    
    the product has been dispatched to the customer and is no longer under the physical control
of the Consolidated Entity (or property in the product has earlier passed to the customer);4.
    
    the selling price can be measured reliably;5.
    
    it is probable that the economic benefits associated with the transaction will flow to the
Consolidated Entity; and6.
    
    the costs incurred or to be incurred in respect of the transaction can be measured reliably.
    (xxiii) Hedging income / expense
   (xxiv) Interest income
  -F- 16 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 (xxv) Carbon credits
  (xxvi) Cash and cash equivalents
  1.
    
    cash on hand and at call deposits with banks or financial institutions, net of bank
overdrafts; and2.
    
    investments in money market instruments with less than 90 days to maturity from the date of
acquisition.
 (xxvii) Employee benefits
 Wages, Salaries, Salary at Risk, Annual Leave and Sick Leave
  Long Service Leave
   Defined Contribution Superannuation Plan
   (xxviii) Provisions
   -F- 17 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 (xxix) Dividends
  (xxx) Income tax
      Tax consolidation legislation
   (xxxi) Goods and service tax (GST)
    -F- 18 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 (xxxii) Foreign currency translation
 Functional and presentation currency
  Transactions and balances
   Consolidated Entity companies
  1.
    
    Assets and liabilities for each Statements of Financial Position presented are translated at
the closing rate at the date of that Statements of Financial Position2.
    
    Income and expenses for each Statements 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); and3.
    
    All resulting exchange differences are recognised in the foreign currency translation
reserve.
   (xxxiii) Business combinations
   -F- 19 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 (xxxiv) Segment reporting
   (xxxv) Comparative figures
  (xxxvi) Rounding of amounts
  NOTE 2: CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
    Recoverability of long-lived assets
  Recoverability of non-current ore stockpiles
  -F- 20 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 Determination of ore reserves and mineral resources and remaining mine life
     
    
    a resource and resource potential review conducted by independent experts appropriately
qualified to opine on the existing exploration and drilling data and take into account
other factors in forming their opinions;
    
    announcements regarding the asset have been sufficiently scrutinised by a JORC
recognised Competent Person with sufficient experience relevant to the style of
mineralisation and the type of deposit under consideration;
    
    clear delineation from drilling of multiple repeats of mineralised faults and
structures that hosted ore bodies in the upper levels of the mine that were historically
extracted. The drilling intersections are of sufficient tenor to
provide confidence of
continuity of mineralisation and/or repetition along strike and down dip;
    
    historical records of mining at the Ballarat field revealed production in excess of 11
million ounces of gold. Of this, 1.7 million ounces were produced from geological
structures similar to those identified in recent drilling below the old workings;
    
    a well documented history of previous production and work on stope modelling had given
a good indication of the grade and size of individual ore lenses. This information had
been used to model the shape of likely ore lenses intersected by drilling;
    
    drilling undertaken by Ballarat Goldfields NL prior to the Companys acquisition had
successfully intersected multiple repeats of mineralised faults and structures that hosted
ore zones in the upper levels of the mine; ore from these upper level zones had been
successfully extracted in the past. The drilling intersections were of sufficient spacing
and frequency to provide some confidence about continuity of mineralisation below the
historically mined ore zones;
    
    independent technical evaluation of the mineral assets of Ballarat Goldfields prepared
by Grant Samuel & Associates in November 2006;
    
    the successful conversion of inferred resource into higher resource categories as
drilling density increases from resource definition drilling to stope delineation
drilling;
    
    positive results from trial mining and pilot processing plant which during 2008 yielded
10,366oz of gold;
    
    at the time of acquisition, Ballarat was deemed to be in the development phase, with
underground decline development and trial mining of the first stopes being undertaken,
along with trial processing of small parcels of ore. A significant
effort had been
expended over several years to develop a model which accurately predicts the resource
boundaries and the mineable ore. Drilling results were
supportive of  the veracity of
the model, and  preliminarly trial mining had indicated  mineralization was
present in the structures expected.
  -F- 21 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
      Provision for restoration and rehabilitation obligations
  Recoverability of deferred tax assets
  Unit-of-production method of depreciation
  Deferred mining costs
   Estimated impairment of goodwill
  -F- 22 -




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##### 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
    Preliminary assessment on the
    
    Application date forApplication date
    
    impact of the Consolidated
    
    the ConsolidatedReference
    
    Title
    
    Summary
    
    of standard
    
    Entitys financial report
    
    EntityIFRS 2
    
    Share-based Payment
    
    Amendment relating
to vesting
conditions and
cancellations
    
    Annual period
beginning on or
after 1 January
2009
    
    The Consolidated Entity has
share-based payment
transactions that may be
affected by these
amendments. The
Consolidated Entity has yet
to determine the extent of
the impact, if any.
    
    Annual period
beginning on or
after 1 January
2009IFRS 3
    
    Business
Combinations
    
    Comprehensive
revision on
applying the
acquisition method
    
    Annual periods
beginning on or
after 1 July 2009
    
    This amendment will impact
the accounting for future
business combinations
effected after adoption of
the revised accounting
standard.
    
    Annual periods
beginning on or
after 1 July 2009IFRS 7
    
    Financial
Instruments:
Disclosures.
    
    Amendments for
disclosure of
eligible hedged
items.
    
    Annual periods
beginning on or
after 1 July 2009.
    
    IFRS 7 is a disclosure
standard so will have no
direct impact on the amounts
disclosed in the
Consolidated Entitys
financial statements.
    
    Annual periods
beginning on or
after 1 July 2009.IAS 1
    
    Presentation of
Financial
Statements
    
    Amendments relating
to disclosure of
puttable
instruments and
obligations arising
on liquidation
    
    Annual periods
beginning on or
after 1 January
2009
    
    At present the Consolidated
Entity has no puttable
financial instruments as
defined under IAS 32
therefore the amendment
would have no impact for the
Consolidated Entity as at 31
December 2008.
    
    Annual periods
beginning on or
after 1 January
2009IAS 27
    
    Consolidated and
Separate Financial
Statements
    
    Consequential
amendments arising
from amendments to
IFRS 3
    
    Annual periods
beginning on or
after 1 July 2009
    
    This amendment will impact
the accounting for future
business combinations
effected after adoption of
the revised accounting
standard.
    
    Annual periods
beginning on or
after 1 July 2009IAS 28
    
    Investments in
Associates
    
    Consequential
amendments arising
from amendments to
IFRS 3
    
    Annual periods
beginning on or
after 1 July 2009
    
    This amendment will impact
the accounting for future
business combinations
effected after adoption of
the revised accounting
standard.
    
    Annual periods
beginning on or
after 1 July 2009
 -F- 23 -




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##### 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 31
    
    Interest in Joint
Ventures
    
    Consequential
amendments arising
from amendments to
IFRS 3
    
    Annual periods
beginning on or
after 1 July 2009
    
    This amendment will impact
the accounting for future
business combinations
effected after adoption of
the revised accounting
standard.
    
    Annual periods
beginning on or after 1 July 2009IAS 32
    
    Financial
Instruments:
Presentation
    
    Amendments relating
to puttable
instruments and
obligations arising
from liquidation
    
    Annual periods
beginning on or
after 1 January
2009
    
    At present the Consolidated
Entity has no puttable
financial instruments as
defined under IAS 32
therefore the amendment
would have no impact for the
Consolidated Entity as at 31
December 2008.
    
    Annual periods
beginning on or
after 1 January
2009IAS 39
    
    Financial
Instruments:
Recognition and
Measurement.
    
    Amendments for
eligible hedged
items.
    
    Annual periods
beginning on or
after 1 July 2009.
    
    The Consolidated Entity has
not yet determined the
extent of the impact of
these amendments, if any.
    
    Annual periods
beginning on or
after 1 July 2009.IFRIC 15
    
    Agreements for the
construction of
real estate.
    
    This interpretation
provides
clarification of
the accounting for
agreements for the
construction of
real estate.
    
    Annual periods
beginning on or
after 1 January
2009.
    
    Not applicable
    
    Annual periods
beginning on or
after 1 January
2009.IFRIC 16
    
    Hedges of a net
investment in a
foreign operation.
    
    This interpretation
provides
clarification for
the accounting for
hedges of a net
investment in a
foreign operation.
    
    Annual periods
beginning on or
after 1 October
2009.
    
    The Consolidated Entity has
not yet determined the
extent of the impact of
these amendments, if any.
    
    Annual periods
beginning on or
after 1 October
2009.IFRIC 17
    
    Guidance on
distributions of
non-cash items to
owners
    
    This interpretation
provides
clarification for
the accounting for
distributions of
non cash items to
owners
    
    Annual periods
beginning on or
after 1 July 2009.
    
    Not applicable
    
    Annual periods
beginning on or
after 1 July 2009.
 -F- 24 -




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##### 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
    
    EntityAmendments to IFRS
    
    Various
    
    Improvements to
International
Financial Reporting
Standards
    
    Annual periods
beginning on or
after 1 January
2009
    
    The Consolidated Entity has
not yet determined the
extent of the impact of
these amendments, if any.
    
    Annual periods
beginning on or
after 1 January
2009
 NOTE 4: INTEREST IN UN-INCORPORATED JOINT VENTURE ASSETS
  NOTE 5: 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
 -F- 25 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 
  
    
    Cash and cash equivalents
    
    Current and deferred tax balances
    
    Interest bearing loans and borrowings
    
    Derivative financial instruments
    
    Assets and liabilities of the corporate office
  -F- 26 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 Reporting
by geographical segments
 AustraliaPapua
    
    
    (Mount
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    TotalNew
    
    
    Rawdon/
    
    
    Australia
    
    
    
    
    
    
    
    
    
    
    ConsolidatedProfit and loss
    
    Guinea
    
    
    Kirkalocka)
    
    
    (Ballarat)
    
    
    Africa
    
    
    Unallocated
    
    
    EntityYear ended 31 December 2008
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$mRevenue from external customers
    
    
    667.1
    
    
    
    60.0
    
    
    
    7.0
    
    
    
    21.5
    
    
    
    
    
    
    
    755.6Cost of sales (excluding
depreciation and amortisation)
    
    
    (322.3
    )
    
    
    (33.2
    )
    
    
    (7.0
    )
    
    
    (5.0
    )
    
    
    1.0
    
    
    
    (366.5
    )Mine EBITDA
    
    
    344.8
    
    
    
    26.8
    
    
    
    
    
    
    
    16.5
    
    
    
    1.0
    
    
    
    389.1Non-cash cost of salesDepreciation and amortisation of
mineral reserves
    
    
    
    
    
    
    (14.2
    )
    
    
    
    
    
    
    (12.0
    )
    
    
    
    
    
    
    (26.2
    )Other depreciation and amortisation
    
    
    (66.0
    )
    
    
    (1.9
    )
    
    
    
    
    
    
    (7.7
    )
    
    
    (0.9
    )
    
    
    (76.5
    )(66.0
    )
    
    
    (16.1
    )
    
    
    
    
    
    
    (19.7
    )
    
    
    (0.9
    )
    
    
    (102.7
    )Change in inventories and deferred
waste
    
    
    15.2
    
    
    
    
    
    
    
    
    
    
    
    2.8
    
    
    
    
    
    
    
    18.0Gross profit from mining activities
    
    
    294.0
    
    
    
    10.7
    
    
    
    
    
    
    
    (0.5
    )
    
    
    0.1
    
    
    
    304.3Corporate expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.9
    )
    
    
    (31.0
    )
    
    
    (31.9
    )Project studies
    
    
    (2.6
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2.6
    )Exploration expense
    
    
    (5.8
    )
    
    
    
    
    
    
    (0.4
    )
    
    
    (2.3
    )
    
    
    
    
    
    
    (8.5
    )Operating profit / (loss) before
other income / (expense)
    
    
    285.6
    
    
    
    10.7
    
    
    
    (0.4
    )
    
    
    (3.7
    )
    
    
    (30.9
    )
    
    
    261.3Hedging profit / (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (75.5
    )
    
    
    (75.5
    )Other income and (expenses)
    
    
    (28.0
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3.0
    )
    
    
    (31.0
    )Net finance costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7.2
    
    
    
    7.2Profit / (loss) before income tax
    
    
    257.6
    
    
    
    10.7
    
    
    
    (0.4
    )
    
    
    (3.7
    )
    
    
    (102.2
    )
    
    
    162.0Income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (51.8
    )Net profit / (loss) after tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    110.2Ounces produced (Kozs)
    
    
    772
    
    
    
    63
    
    
    
    10
    
    
    
    37Total cash costs per ounce
    
    
    406
    
    
    
    407
    
    
    
    
    
    
    
    307Capital expenditure
    
    
    141
    
    
    
    1
    
    
    
    108
    
    
    
    27
    
    
    
    1
 -F- 27 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 AustraliaPapua
    
    
    (Mount
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total(1)New
    
    
    Rawdon/
    
    
    Australia
    
    
    
    
    
    
    
    
    
    
    ConsolidatedProfit and loss
    
    Guinea
    
    
    Kirkalocka)
    
    
    (Ballarat)
    
    
    Africa
    
    
    Unallocated
    
    
    EntityYear ended 31 December 2007
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$mRevenue from external customers
    
    
    497.6
    
    
    
    
    
    
    
    0.8
    
    
    
    
    
    
    
    
    
    
    
    498.4Cost of sales (excluding
depreciation and amortisation)
    
    
    (224.5
    )
    
    
    
    
    
    
    (0.8
    )
    
    
    
    
    
    
    
    
    
    
    (225.3
    )Mine EBITDA
    
    
    273.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    273.1Non-cash cost of salesDepreciation and amortisation of
mineral reserves
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other depreciation and amortisation
    
    
    (50.3
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.1
    )
    
    
    (50.4
    )Change in inventories and deferred
waste
    
    
    14.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14.4Gross profit from mining activities
    
    
    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 / (expense)
    
    
    221.5
    
    
    
    
    
    
    
    (0.2
    )
    
    
    
    
    
    
    (25.4
    )
    
    
    195.9Hedging profit / (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 income tax
    
    
    208.5
    
    
    
    
    
    
    
    (0.2
    )
    
    
    
    
    
    
    (244.1
    )
    
    
    (35.8
    )Income tax expense(1)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11.7Net profit / (loss) after tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (24.1
    )Ounces produced (Kozs)
    
    
    700
    
    
    
    
    
    
    
    1.1Total cash costs per ounce
    
    
    305
    
    
    
    
    
    
    
    Capital expenditure
    
    
    149
    
    
    
    
    
    
    
    58
 AustraliaPapua
    
    
    (Mount
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total(1)New
    
    
    Rawdon/
    
    
    Australia
    
    
    
    
    
    
    
    
    
    
    ConsolidatedProfit and loss
    
    Guinea
    
    
    Kirkalocka)
    
    
    (Ballarat)
    
    
    Africa
    
    
    Unallocated
    
    
    EntityYear ended 31 December 2006
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$mRevenue from external customers
    
    
    386.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    386.0Cost of sales (excluding
depreciation and amortisation)
    
    
    (181.7
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (181.7
    )Mine EBITDA
    
    
    204.3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    204.3Non-cash cost of salesDepreciation and amortisation of
mineral reserves
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other depreciation and amortisation
    
    
    (37.3
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (37.3
    )
 -F- 28 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 AustraliaPapua
    
    
    (Mount
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total(1)New
    
    
    Rawdon/
    
    
    Australia
    
    
    
    
    
    
    
    
    
    
    ConsolidatedProfit and loss
    
    Guinea
    
    
    Kirkalocka)
    
    
    (Ballarat)
    
    
    Africa
    
    
    Unallocated
    
    
    EntityYear ended 31 December 2006
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$mChange in inventories and deferred
waste
    
    
    8.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8.0Gross profit from mining activities
    
    
    175.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    175.0Corporate expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12.1
    )
    
    
    (12.1
    )Project studies
    
    
    (0.8
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.8
    )Exploration expense
    
    
    (5.9
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5.9
    )Operating profit / (loss) before
other income / (expense)
    
    
    168.3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12.1
    )
    
    
    156.2Hedging profit / (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(1)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (21.0
    )Net profit / (loss) after tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    54.9Ounces produced (Kozs)
    
    
    651
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total cash costs per ounce
    
    
    297
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Capital expenditure
    
    
    171
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 AustraliaPapua
    
    
    (Mount
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    TotalNew
    
    
    Rawdon/
    
    
    Australia
    
    
    
    
    
    
    
    
    
    
    ConsolidatedGuinea
    
    
    Kirkalocka)
    
    
    (Ballarat)
    
    
    Africa
    
    
    Unallocated
    
    
    EntityBalance Sheet
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$mAs at 31 December 2008Assets and liabilitiesSegment assets
    
    
    1,745.1
    
    
    
    203.1
    
    
    
    476.6
    
    
    
    667.2
    
    
    
    271.8
    
    
    
    3,363.8Segment liabilities
    
    
    (85.0
    )
    
    
    (24.6
    )
    
    
    (19.2
    )
    
    
    (13.2
    )
    
    
    (294.3
    )
    
    
    (436.3
    )As at 31 December 2007(1)Assets and liabilitiesSegment assets
    
    
    1,578.6
    
    
    
    
    
    
    
    481.9
    
    
    
    
    
    
    
    243.8
    
    
    
    2,304.3Segment liabilities
    
    
    (79.2
    )
    
    
    
    
    
    
    (11.6
    )
    
    
    
    
    
    
    (45.0
    )
    
    
    (135.8
    )As at 31 December 2006(1)Assets and liabilitiesSegment assets
    
    
    1,300.0
    
    
    
    
    
    
    
    33.0
    
    
    
    
    
    
    
    170.3
    
    
    
    1,503.4Segment liabilities
    
    
    (348.6
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (335.5
    )
    
    
    (684.1
    )
 
 (1)
    
    Revised (refer Note 35) -F- 29 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 Major customers
   2008Customer
    
    $m
    
    Segment reporting revenue1
    
    
    89.1
    
    
    Papua New Guinea / Africa2
    
    
    82.7
    
    
    Papua New Guinea3
    
    
    79.2
    
    
    Papua New Guinea4
    
    
    77.5
    
    
    Papua New Guinea
 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
 NOTE 6: REVENUE
 $m2008
    
    
    2007
    
    
    2006Gold sales
    
    
    749.7
    
    
    
    493.0
    
    
    
    384.4Silver sales
    
    
    1.4
    
    
    
    0.1
    
    
    
    1.6Other revenue(1)
    
    
    4.5
    
    
    
    5.3
    
    
    
    755.6
    
    
    
    498.4
    
    
    
    386.0
 
 (1)
    
    Other revenue includes certified emission reduction certificate credits -F- 30 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 NOTE 7: EMPLOYEE EXPENSES
 $m2008
    
    
    2007
    
    
    2006Equity settled share-based payment compensation
    
    
    4.7
    
    
    
    2.9
    
    
    
    0.5Other personnel expenses
    
    
    88.1
    
    
    
    66.0
    
    
    
    41.292.8
    
    
    
    68.9
    
    
    
    41.7
 NOTE 8: COST OF SALES
 $m2008
    
    
    2007
    
    
    2006Operating costs
    
    
    (459.5
    )
    
    
    (304.6
    )
    
    
    (237.5
    )Royalties, levies & production taxes
    
    
    (17.8
    )
    
    
    (13.2
    )
    
    
    (9.4
    )Refining costs
    
    
    (3.6
    )
    
    
    (0.5
    )
    
    
    (0.3
    )Depreciation & amortisation
    
    
    (102.7
    )
    
    
    (50.4
    )
    
    
    (37.3
    )Deferred mining costs
    
    
    40.0
    
    
    
    70.0
    
    
    
    56.3Changes in inventories
    
    
    94.2
    
    
    
    41.2
    
    
    
    19.4Stores inventories obsolescence
    
    
    (0.1
    )
    
    
    (0.8
    )
    
    
    (1.0
    )Foreign exchange loss
    
    
    (1.8
    )
    
    
    (3.0
    )
    
    
    (1.2
    )(451.3
    )
    
    
    (261.3
    )
    
    
    (211.0
    )
 NOTE 9: HEDGING LOSS
 $m2008
    
    
    2007
    
    
    2006Cash hedging loss
    
    
    (9.9
    )
    
    
    (21.4
    )
    
    
    (61.2
    )Non-cash hedging loss(1)
    
    
    (65.6
    )
    
    
    (75.8
    )
    
    
    (17.1
    )(75.5
    )
    
    
    (97.2
    )
    
    
    (78.3
    )
 
 (1)
    
    2008 amount of $75.5 million reflecting $76.7 million from the closed-out LGL hedge
book in 2007 and the net effect, after fair value adjustments, of delivering into the acquired
Equigold hedge book. NOTE 10: OTHER INCOME AND EXPENSES
 $m2008
    
    
    2007
    
    
    2006Other incomeOther income
    
    
    0.3
    
    
    
    
    
    
    
    0.3
    
    
    
    
    
    
    
    Other expensesImpairment of listed equity securities(1)
    
    
    (3.2
    )
    
    
    
    
    
    
    Property, plant and equipment disposal loss
    
    
    (28.1
    )
    
    
    (13.8
    )
    
    
    (31.3
    )
    
    
    (13.8
    )
    
    
    -
 
 (1)
    
    Listed share investments with a significant or prolonged decline in fair value below
cost have been impaired. The impairment loss is equivalent to the difference in the listed
market valuation at 31 December 2008 and the cost of the
respective securities. -F- 31 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 NOTE 11: FINANCIAL INCOME AND EXPENSES
 $m2008
    
    
    2007
    
    
    2006Financial incomeInterest income
    
    
    3.5
    
    
    
    9.7
    
    
    
    1.4Foreign exchange gain
    
    
    4.2
    
    
    
    
    
    
    
    Gold lease rate fees
    
    
    
    
    
    
    0.3
    
    
    
    2.8Other income
    
    
    0.1
    
    
    
    0.9
    
    
    
    7.8
    
    
    
    10.9
    
    
    
    4.2Financial expensesLoss on repayment of gold loan
    
    
    
    
    
    
    (117.9
    )
    
    
    Foreign exchange loss
    
    
    
    
    
    
    (5.8
    )      (1)
    
    
    Interest expense on debt facilities
    
    
    
    
    
    
    (4.8
    )
    
    
    (1.5
    )Other interest & financing
    
    
    (0.6
    )
    
    
    (3.1
    )
    
    
    (4.7
    )(0.6
    )
    
    
    (131.6
    )
    
    
    (6.2
    )
 
 (1)
    
    Represents realised foreign exchange in relation to un-favourable movements arising
from receiving funds from the capital raising in A$ transaction and locking in 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- 32 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 NOTE 12: INCOME TAX
  $m2008
    
    
    2007(1)
    
    
    2006Income Tax ExpenseCurrent tax
    
    
    
    
    
    
    
    
    
    
    0.3
    
    
    
    
    
    
    
    0.3Deferred tax
    
    
    52.3
    
    
    
    (10.1
    )
    
    
    22.5Under / (over) provided in prior years
    
    
    (0.5
    )
    
    
    (1.6
    )
    
    
    (1.5
    )51.8
    
    
    
    (11.7
    )
    
    
    21.0Total income tax expense / (benefit)
    
    
    51.8
    
    
    
    (11.7
    )
    
    
    21.0Numerical reconciliation of income
tax expense to prima facie tax
payable Profit / (loss) before tax
    
    
    162.0
    
    
    
    (35.8
    )
    
    
    75.9Deduct Côte dIvoire profit not
taxable under tax holiday
    
    
    (4.4
    )
    
    
    
    
    
    
    157.6
    
    
    
    (35.8
    )
    
    
    75.9Prima facie income tax expense on
before tax profit at 30%
    
    
    47.3
    
    
    
    (10.7
    )
    
    
    22.8Tax effect of amounts which are not
deductible (taxable) in calculating
taxable income- Expenses not deductible / (Income
not taxable) for tax purposes
    
    
    5.1
    
    
    
    1.0
    
    
    
    (0.2
    )- Recognition of tax losses not
previously recognized
    
    
    
    
    
    
    (0.2
    )
    
    
    - Section 72A double deductions
    
    
    (0.1
    )
    
    
    (0.2
    )
    
    
    (0.1
    )52.3
    
    
    
    (10.1
    )
    
    
    22.5Adjustment for current tax of prior
periodsOver provided in prior years
    
    
    (0.5
    )
    
    
    (1.6
    )
    
    
    (1.5
    )Tax expense / (benefit)
    
    
    51.8
    
    
    
    (11.7
    )
    
    
    21.0Deferred Income TaxDeferred tax assets:
    
    
    230.8
    
    
    
    244.4230.8
    
    
    
    244.4Deferred tax liabilities:
    
    
    (414.4
    )
    
    
    (185.3
    )(414.4
    )
    
    
    (185.3
    )Balance at beginning of year
    
    
    59.2
    
    
    
    93.5Credited / (charged) to profit and loss
    
    
    (51.9
    )
    
    
    11.7Acquired on business combination
    
    
    (188.0
    )
    
    
    (37.5
    )Translation adjustments
    
    
    27.7
    
    
    
    (3.8
    )Tax charged to equity
    
    
    (30.6
    )
    
    
    (4.7
    )Balance at end of year
    
    
    (183.6
    )
    
    
    59.2Deferred tax asset  PNG
    
    
    31.6
    
    
    
    101.3Deferred tax  CDI
    
    
    
    
    
    
    Deferred tax liability  Australia
    
    
    (215.2
    )
    
    
    (42.1
    )
 
 (1)
    
    Revised (refer Note 35) F-33




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##### 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 of
    
    
    
    
    
    
    
    
    
    
    MiningDeferred tax assets:
    
    depreciation
    
    
    assets
    
    
    Derivatives
    
    
    Tax losses
    
    
    tenements
    
    
    Other(1)
    
    
    Total(2)At 1 January 2007
    
    
    
    
    
    
    8.9
    
    
    
    99.8
    
    
    
    72.9
    
    
    
    
    
    
    
    0.4
    
    
    
    182.0Credited / (charged)
to profit and loss
    
    
    
    
    
    
    3.1
    
    
    
    (0.3
    )
    
    
    30.5
    
    
    
    
    
    
    
    1.8
    
    
    
    35.1Acquired on business
combination
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29.3
    
    
    
    
    
    
    
    2.9
    
    
    
    32.2Credited / (charged)
to equity
    
    
    
    
    
    
    
    
    
    
    (99.5
    )
    
    
    95.0
    
    
    
    
    
    
    
    (0.4
    )
    
    
    (4.9
    )At 1 January 2008
    
    
    
    
    
    
    12.0
    
    
    
    
    
    
    
    227.7
    
    
    
    
    
    
    
    4.7
    
    
    
    244.4Credited / (charged)
to profit and loss
    
    
    
    
    
    
    (1.2
    )
    
    
    0.1
    
    
    
    (20.6
    )
    
    
    
    
    
    
    (4.5
    )
    
    
    (26.2
    )Translation Adjustment
    
    
    
    
    
    
    2.3
    
    
    
    3.9
    
    
    
    
    
    
    
    
    
    
    
    1.0
    
    
    
    7.2Acquired on business
combination
    
    
    
    
    
    
    4.0
    
    
    
    15.8
    
    
    
    
    
    
    
    
    
    
    
    4.0
    
    
    
    23.8Charged to equity
    
    
    
    
    
    
    
    
    
    
    (4.1
    )
    
    
    (15.7
    )
    
    
    
    
    
    
    1.4
    
    
    
    (18.4
    )At 31 December 2008
    
    
    
    
    
    
    17.1
    
    
    
    15.7
    
    
    
    191.4
    
    
    
    
    
    
    
    6.6
    
    
    
    230.8
 Acceleratedtax
    
    
    Consuma
    
    
    Deferred
    
    
    Prepaid
    
    
    MiningDeferred tax liabilities:
    
    depreciation
    
    
    ble stores
    
    
    mining
    
    
    insurance
    
    
    tenements
    
    
    Derivatives
    
    
    Other(1)
    
    
    Total(2)At 1 January 2007
    
    
    (40.6
    )
    
    
    (4.2
    )
    
    
    (44.5
    )
    
    
    (0.2
    )
    
    
    
    
    
    
    
    
    
    
    1.0
    
    
    
    (88.5
    )Charged/(credited) to
profit and loss
    
    
    2.5
    
    
    
    (2.2
    )
    
    
    (21.5
    )
    
    
    (0.6
    )
    
    
    
    
    
    
    
    
    
    
    (1.5
    )
    
    
    (23.3
    )Acquired on business
combination
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (66.8
    )
    
    
    
    
    
    
    (6.9
    )
    
    
    (73.7
    )(Credited)/charged to
equity
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.2
    
    
    
    0.2At 1 January 2008
    
    
    (38.1
    )
    
    
    (6.4
    )
    
    
    (66.0
    )
    
    
    (0.8
    )
    
    
    (66.8
    )
    
    
    
    
    
    
    (7.2
    )
    
    
    (185.3
    )Charged/(credited) to
profit and loss
    
    
    (20.3
    )
    
    
    (8.3
    )
    
    
    (10.0
    )
    
    
    
    
    
    
    (0.4
    )
    
    
    (0.4
    )
    
    
    13.7
    
    
    
    (25.6
    )Translation Adjustment
    
    
    
    
    
    
    
    
    
    
    (0.2
    )
    
    
    
    
    
    
    20.4
    
    
    
    
    
    
    
    0.3
    
    
    
    20.5Acquired on business
combination
    
    
    
    
    
    
    
    
    
    
    (0.9
    )
    
    
    
    
    
    
    (209.5
    )
    
    
    
    
    
    
    (1.4
    )
    
    
    (211.8
    )Charged to equity
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12.2
    )
    
    
    (12.2
    )At 31 December 2008
    
    
    (58.4
    )
    
    
    (14.7
    )
    
    
    (77.1
    )
    
    
    (0.8
    )
    
    
    (256.3
    )
    
    
    (0.4
    )
    
    
    (6.8
    )
    
    
    (414.4
    )
 
 (1)
    
    Other includes share-based payments(2)
    
    Revised (refer Note 35) -F- 34 -




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##### Table of Contents



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




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 Income tax on other comprehensive income
 $mBefore
    
    
    Tax2008
    
    tax
    
    
    effect
    
    
    Net of taxExchange difference on translation of foreign operations
    
    
    (158.5
    )
    
    
    (11.5
    )
    
    
    (170.0
    )Deferred loss on cash flow hedges
    
    
    44.0
    
    
    
    (19.6
    )
    
    
    24.4Net change in fair value of available for sale financial assets
    
    
    (2.2
    )
    
    
    0.5
    
    
    
    (1.7
    )Other comprehensive income
    
    
    (116.7
    )
    
    
    (30.6
    )
    
    
    (147.3
    )
 $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
    )
    
    
    34.2Net change in fair value of available for sale financial assets
    
    
    1.2
    
    
    
    (0.4
    )
    
    
    0.8Other comprehensive income
    
    
    82.5
    
    
    
    (4.9
    )
    
    
    77.6
 $mBefore
    
    
    Tax2006
    
    tax
    
    
    effect
    
    
    Net of taxDeferred loss on cash flow hedges
    
    
    (50.8
    )
    
    
    20.4
    
    
    
    (30.4
    )Other comprehensive income
    
    
    (50.8
    )
    
    
    20.4
    
    
    
    (30.4
    )
 NOTE 13: CASH AND CASH EQUIVALENTS
 $m2008
    
    
    2007
    
    
    2006Cash at bank and on hand
    
    
    64.7
    
    
    
    44.7
    
    
    
    21.4Short-term deposits with financial institutions
    
    
    
    
    
    
    129.5
    
    
    
    25.664.7
    
    
    
    174.2
    
    
    
    47.0
 -F- 36 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
    -F- 37 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 NOTE 14: NOTE TO STATEMENTS OF CASH FLOWS
 $m2008
    
    
    2007
    
    
    2006Reconciliation of cash flow from operating activities to operating profit after taxNet profit / (loss) after tax
    
    
    110.2
    
    
    
    (24.1
    )
    
    
    54.9Add back non-cash items:Depreciation and amortisation
    
    
    102.7
    
    
    
    50.4
    
    
    
    37.3Fair value losses
    
    
    
    
    
    
    0.4
    
    
    
    1.7Amortisation of deferred hedging costs (net)
    
    
    
    
    
    
    
    
    
    
    17.1Provision for doubtful debts
    
    
    0.7
    
    
    
    1.3
    
    
    
    0.4Non-cash hedging loss
    
    
    65.6
    
    
    
    75.4
    
    
    
    Impairment losses
    
    
    3.2
    
    
    
    
    
    
    
    Other non-cash items
    
    
    (0.8
    )
    
    
    (0.7
    )
    
    
    Share based payment expenses
    
    
    4.7
    
    
    
    2.9
    
    
    
    0.6Hedge book restructure payments and receiptsPurchase of gold to close out hedge book
    
    
    
    
    
    
    (648.4
    )
    
    
    Receipts on close out of hedge book
    
    
    
    
    
    
    279.9
    
    
    
    Add back items presented in investing or financing
(Profit) / loss on disposal of assets
    
    
    27.9
    
    
    
    13.8
    
    
    
    Interest income
    
    
    (3.5
    )
    
    
    (9.7
    )
    
    
    (1.4
    )Interest and financing costs
    
    
    0.2
    
    
    
    117.9
    
    
    
    Change in operating assets and liabilities net of purchase of subsidiary and
translation differences(Increase) / decrease in debtors and prepayments
    
    
    (8.0
    )
    
    
    (6.0
    )
    
    
    0.1(Increase) / decrease in inventories
    
    
    (107.4
    )
    
    
    (54.3
    )
    
    
    (19.8
    )(Increase) / decrease in deferred mining costs
    
    
    (36.4
    )
    
    
    (70.0
    )
    
    
    (56.3
    )Increase / (decrease) in operating payables
    
    
    (1.8
    )
    
    
    12.7
    
    
    
    (0.7
    )Increase / (decrease) in operating provisions
    
    
    (1.3
    )
    
    
    7.1
    
    
    
    2.9Increase / (decrease) in provision for income taxes payable
    
    
    4.6
    
    
    
    (0.3
    )
    
    
    0.3Increase / (decrease) in provision for deferred income tax
    
    
    51.8
    
    
    
    (18.3
    )
    
    
    20.2Net cash flow from operating activities
    
    
    212.4
    
    
    
    (270.0
    )
    
    
    57.3
 NOTE 15: RECEIVABLES
 $m2008
    
    
    2007CURRENTOther amounts receivable from third parties
    
    
    25.9
    
    
    
    19.1Less: Provision for impairment
    
    
    (4.9
    )
    
    
    (4.2
    )Other debtors  related parties and controlled entities
    
    
    
    
    
    
    21.0
    
    
    
    14.9NON-CURRENTOther debtors  related parties and controlled entities
    
    
    
    
    
    
    Other amounts receivable from third parties
    
    
    0.4
    
    
    
    0.40.4
    
    
    
    0.4
 -F- 38 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 NOTE 16: INVENTORIES
 $m2008
    
    
    2007CURRENTStores at net realisable value
    
    
    
    
    
    
    74.2
    
    
    
    55.8Ore stockpiles
    
    
    
    
    
    
    47.7
    
    
    
    39.9Gold in circuit
    
    
    
    
    
    
    7.9
    
    
    
    3.9Finished goods
    
    
    
    
    
    
    10.2
    
    
    
    3.2140.0
    
    
    
    102.8NON-CURRENTOre stockpiles
    
    
    
    
    
    
    255.0
    
    
    
    169.1255.0
    
    
    
    169.1
 NOTE 17: DEFERRED MINING COSTS
 $m2008
    
    
    2007NON-CURRENTDeferred mining costs
    
    
    
    
    
    
    259.5
    
    
    
    218.3259.5
    
    
    
    218.3
 Movements:
 $m2008
    
    
    2007Carrying amount at start of year
    
    
    218.3
    
    
    
    148.3- Acquired on business combination
    
    
    2.9
    
    
    
    - Cash overburden costs attributable to current year mining activity
    
    
    (7.7
    )
    
    
    (49.7
    )- Non-cash overburden costs attributable to current year mining activity(1)
    
    
    (1.0
    )
    
    
    (10.5
    )- Total cash costs of material mined during the period (cash)
    
    
    41.7
    
    
    
    110.8- Total non-cash costs of material mined during the period
    
    
    6.2
    
    
    
    19.4- Translation adjustments
    
    
    (0.9
    )
    
    
    Carrying amount at end of year
    
    
    259.5
    
    
    
    218.3
 
 (1)
    
    Non-cash costs comprise depreciation and amortisation on operating property, plant
and equipment. -F- 39 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 NOTE 18: PROPERTY, PLANT AND EQUIPMENT
 $mNote
    
    
    2008
    
    
    2007(1)LAND AND BUILDINGSCost brought forward
    
    
    
    
    
    
    125.7
    
    
    
    118.8Transfers from capital works in progress
    
    
    
    
    
    
    9.5
    
    
    
    5.8Assets acquired through business combination
    
    
    30
    
    
    
    1.5
    
    
    
    1.0Translation adjustments
    
    
    
    
    
    
    (0.9
    )
    
    
    0.1Disposals
    
    
    
    
    
    
    (1.9
    )
    
    
    Cost carried forward
    
    
    
    
    
    
    133.9
    
    
    
    125.7Depreciation brought forward
    
    
    
    
    
    
    (31.6
    )
    
    
    (28.3
    )Disposals
    
    
    
    
    
    
    0.2
    
    
    
    Charge for the year
    
    
    
    
    
    
    (4.2
    )
    
    
    (3.3
    )Depreciation carried forward
    
    
    
    
    
    
    (35.6
    )
    
    
    (31.6
    )Net book value
    
    
    
    
    
    
    98.3
    
    
    
    94.1PLANT AND EQUIPMENTCost brought forward
    
    
    
    
    
    
    965.9
    
    
    
    701.2Additions
    
    
    
    
    
    
    15.8
    
    
    
    6.2Transfers from capital works in progress
    
    
    
    
    
    
    217.4
    
    
    
    278.9Assets acquired through business combination
    
    
    30
    
    
    
    27.2
    
    
    
    2.6Translation adjustments
    
    
    
    
    
    
    (7.9
    )
    
    
    0.3Reclassification
    
    
    
    
    
    
    
    
    
    
    (5.2
    )Disposals / transfers
    
    
    
    
    
    
    (42.1
    )
    
    
    (18.1
    )Cost carried forward
    
    
    
    
    
    
    1,176.3
    
    
    
    965.9Depreciation brought forward
    
    
    
    
    
    
    (283.0
    )
    
    
    (247.5
    )Charge for the year
    
    
    
    
    
    
    (64.9
    )
    
    
    (38.3
    )Reclassification
    
    
    
    
    
    
    
    
    
    
    0.2Disposals
    
    
    
    
    
    
    17.7
    
    
    
    2.6Depreciation carried forward
    
    
    
    
    
    
    (330.2
    )
    
    
    (283.0
    )Net book value
    
    
    
    
    
    
    846.1
    
    
    
    682.9DEFERRED DEVELOPMENT(2)Cost brought forward
    
    
    
    
    
    
    639.1
    
    
    
    290.9Additions
    
    
    
    
    
    
    105.1
    
    
    
    41.6Transfers from capital works in progress
    
    
    
    
    
    
    42.0
    
    
    
    10.3Assets acquired through business combination
    
    
    30
    
    
    
    6.3
    
    
    
    267.5Translation adjustments
    
    
    
    
    
    
    (86.8
    )
    
    
    28.8Disposals / transfers
    
    
    
    
    
    
    (2.1
    )
    
    
    Cost carried forward
    
    
    
    
    
    
    703.6
    
    
    
    639.1Depreciation brought forward
    
    
    
    
    
    
    (101.3
    )
    
    
    (93.2
    )Charge for the year
    
    
    
    
    
    
    (12.9
    )
    
    
    (8.1
    )Disposals
    
    
    
    
    
    
    0.4
    
    
    
    Depreciation carried forward
    
    
    
    
    
    
    (113.8
    )
    
    
    (101.3
    )Net book value
    
    
    
    
    
    
    589.8
    
    
    
    537.8
 
 (1)
    
    Revised (refer Note 35) -F- 40 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 $mNote
    
    
    2008
    
    
    2007(1)MINE PROPERTIESCost brought forward
    
    
    
    
    
    
    
    
    
    
    Assets acquired through business combination
    
    
    30
    
    
    
    624.1
    
    
    
    Translation adjustments
    
    
    
    
    
    
    (67.7
    )
    
    
    Cost carried forward
    
    
    
    
    
    
    556.4
    
    
    
    Depreciation brought forward
    
    
    
    
    
    
    
    
    
    
    Charge for the year
    
    
    
    
    
    
    (26.2
    )
    
    
    Disposals
    
    
    
    
    
    
    
    
    
    
    Depreciation carried forward
    
    
    
    
    
    
    (26.2
    )
    
    
    Net book value
    
    
    
    
    
    
    530.2
    
    
    
    CAPITAL WORKS IN PROGRESSCost brought forward
    
    
    
    
    
    
    107.7
    
    
    
    205.0Additions
    
    
    
    
    
    
    183.2
    
    
    
    171.5Transfers
    
    
    
    
    
    
    (268.9
    )
    
    
    (295.0
    )Assets acquired through business combination
    
    
    30
    
    
    
    83.8
    
    
    
    23.6Translation adjustments
    
    
    
    
    
    
    (15.2
    )
    
    
    2.6Costs carried forward
    
    
    
    
    
    
    90.6
    
    
    
    107.7REHABILITATIONCost brought forward
    
    
    
    
    
    
    5.2
    
    
    
    6.8Assets acquired through business combination
    
    
    30
    
    
    
    2.2
    
    
    
    Additions / (deductions)
    
    
    
    
    
    
    6.7
    
    
    
    (1.6
    )Cost carried forward
    
    
    
    
    
    
    14.1
    
    
    
    5.2Amortisation brought forward
    
    
    
    
    
    
    (2.7
    )
    
    
    (2.5
    )Charge for the year
    
    
    
    
    
    
    (0.2
    )
    
    
    (0.2
    )Amortisation carried forward
    
    
    
    
    
    
    (2.9
    )
    
    
    (2.7
    )Net book value
    
    
    
    
    
    
    11.2
    
    
    
    2.5Total property, plant & equipment
    
    
    
    
    
    
    2,166.2
    
    
    
    1,425.0
  
 (1)
    
    Revised (refer Note 35)(2)
    
    Development properties classification, totalling $302.0 million in 2007 financial
statements reclassified as deferred development. -F- 41 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 NOTE 19: INTANGIBLE ASSETS
 $mNote
    
    
    2008
    
    
    2007(1)MINING INFORMATIONCost brought forward
    
    
    
    
    
    
    49.2
    
    
    
    Acquired through business combination
    
    
    30
    
    
    
    
    
    
    
    44.5Translation adjustments
    
    
    
    
    
    
    (10.4
    )
    
    
    4.7Cost carried forward
    
    
    
    
    
    
    38.8
    
    
    
    49.2Closing net book value
    
    
    
    
    
    
    38.8
    
    
    
    49.2EXPLORATION RIGHTSCost brought forward
    
    
    
    
    
    
    1.9
    
    
    
    Acquired through business combination
    
    
    30
    
    
    
    162.3
    
    
    
    1.7Translation adjustments
    
    
    
    
    
    
    (0.2
    )
    
    
    0.2Cost carried forward
    
    
    
    
    
    
    164.0
    
    
    
    1.9Closing net book value
    
    
    
    
    
    
    164.0
    
    
    
    1.9LICENSESCost brought forward
    
    
    
    
    
    
    0.1
    
    
    
    Acquired through business combination
    
    
    30
    
    
    
    
    
    
    
    0.1Translation adjustments
    
    
    
    
    
    
    (0.1
    )
    
    
    Cost carried forward
    
    
    
    
    
    
    
    
    
    
    0.1Closing net book value
    
    
    
    
    
    
    
    
    
    
    0.1GOODWILLCost brought forward
    
    
    
    
    
    
    35.3
    
    
    
    Acquired through business combination
    
    
    30
    
    
    
    165.2
    
    
    
    31.7Translation adjustments
    
    
    
    
    
    
    (7.2
    )
    
    
    3.6Cost carried forward
    
    
    
    
    
    
    193.3
    
    
    
    35.3Closing net book value
    
    
    
    
    
    
    193.3
    
    
    
    35.3OTHER INTANGIBLE ASSETSCost brought forward
    
    
    
    
    
    
    7.7
    
    
    
    5.2Acquired through business combination
    
    
    30
    
    
    
    16.2
    
    
    
    Disposals
    
    
    
    
    
    
    (0.2
    )
    
    
    Additions
    
    
    
    
    
    
    
    
    
    
    2.5Cost carried forward
    
    
    
    
    
    
    23.7
    
    
    
    7.7Amortisation brought forward
    
    
    
    
    
    
    (0.7
    )
    
    
    (0.2
    )Charge for the year (2)
    
    
    
    
    
    
    (1.8
    )
    
    
    (0.5
    )Amortisation carried forward
    
    
    
    
    
    
    (2.5
    )
    
    
    (0.7
    )Closing net book value
    
    
    
    
    
    
    21.2
    
    
    
    7.0Total intangible assets
    
    
    
    
    
    
    417.3
    
    
    
    93.5
 
 (1)
    
    Revised (refer Note 35)(2)
    
    Amortisation of $1.8 million is included in depreciation and amortisation expense in
the Statements of Comprehensive Income -F- 42 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 Impairment test for goodwill
     $mBallarat CGU
    
    
    28.1Equigold
    
    
    165.2193.3
  Key assumptions used for fair value less costs to sell of Ballarat CGU
   (1)
    
    Gold price per ounce used for long-term forecast sale cash flows was A$1,363 for
2009, A$1,285 for 2010 and A$1,143 for 2011 and beyond.(2)
    
    Production schedule assuming a progressive ramp up during the four years from 2009
to 2012.(3)
    
    Total production over the life of the mine of more than 4 million ounces. The
critical judgements in assessing the ultimate total mined resource of Ballarat are set out in
Note 2.   (1)
    
    The real cash flows for each SBP case with varying lives ranging from 19 years to 23
years;(2)
    
    A real post-tax discount rate of 6.8%. -F- 43 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 Impact of possible changes in key assumptions
  
    
    Reduction in the gold price used from 2011 and beyond of A$82 per ounce
    
    Delay in the mine production ramp up schedule of more than 12 months
    
    Reduction in the projected total life of mine gold production of 20%.
 NOTE 20: AVAILABLE-FOR-SALE FINANCIAL ASSETS
 $m2008
    
    
    2007At beginning of year
    
    
    2.5
    
    
    
    33.0Additions (1)
    
    
    0.2
    
    
    
    1.3Acquired through business combination (2)
    
    
    6.8
    
    
    
    De-classification on business combination (3)
    
    
    
    
    
    
    (33.0
    )Translation
    
    
    (1.8
    )
    
    
    Impairment
    
    
    (3.2
    )
    
    
    Revaluation surplus / (deficit) transfer to Equity
    
    
    (2.2
    )
    
    
    1.2At end of year
    
    
    2.3
    
    
    
    2.5
 $m2008
    
    
    2007Listed securities:Equity securities
    
    
    2.3
    
    
    
    2.52.3
    
    
    
    2.5
 
 (1)
    
    During the year, the Consolidated Entity acquired 1 million shares of Rex Minerals
Limited as consideration for the North Creswick exploration licence.(2)
    
    During the year, the Consolidated Entity acquired 12 million shares of Mount Magnet
South NL and 10.4 million shares of Adamus Resources Limited on acquisition of Equigold Pty
Limited (formerly Equigold NL).(3)
    
    At 31 December 2006, after entering into a merger proposal between the Company and
Ballarat, Lihir Australian Holdings Pty Ltd held an 11% interest in Ballarat. These equity
securities were carried at fair value. Upon completion of the merger, the remaining shares
were acquired and the wholly owned Ballarat was consolidated into the Consolidated Entitys
accounts. NOTE 21: ACCOUNTS PAYABLE & ACCRUED LIABILITIES
 $m2008
    
    
    2007CURRENTTrade creditors and accruals
    
    
    102.1
    
    
    
    64.0Amounts payable to related parties and controlled entities
    
    
    
    
    
    
    102.1
    
    
    
    64.0
 -F- 44 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 NOTE 22: PROVISIONS
 $m2008
    
    
    2007CURRENTEmployee provisions
    
    
    18.5
    
    
    
    13.518.5
    
    
    
    13.5NON CURRENTEmployee provisions
    
    
    4.4
    
    
    
    3.1Other provisions
    
    
    8.8
    
    
    
    1.4Rehabilitation provision
    
    
    23.6
    
    
    
    10.736.8
    
    
    
    15.2
  $m2008
    
    
    2007Employee provisions currentAnnual leave
    
    
    8.1
    
    
    
    5.4Sick leave
    
    
    1.4
    
    
    
    1.0Service bonus
    
    
    3.1
    
    
    
    3.7Short-term incentives
    
    
    3.3
    
    
    
    2.1Long service leave current
    
    
    1.3
    
    
    
    1.3Other employee provisions
    
    
    1.3
    
    
    
    18.5
    
    
    
    13.5
    $m2008
    
    
    2007Employee provisions non-currentLong service leave
    
    
    2.7
    
    
    
    3.1Service bonus
    
    
    1.7
    
    
    
    4.4
    
    
    
    3.1
  $m2008
    
    
    2007Rehabilitation provisionCarrying amount at start of year
    
    
    10.7
    
    
    
    11.1- additional / (reduction in) provision for changes in
estimated cash outflows
    
    
    2.8
    
    
    
    (1.7
    )- additional provision due to ground disturbance
    
    
    1.8
    
    
    
    0.1- change in discount and inflation rate
    
    
    1.9
    
    
    
    - acquisition of subsidiaries
    
    
    7.4
    
    
    
    0.5- interest charge
    
    
    0.5
    
    
    
    0.7- translation adjustment
    
    
    (1.5
    )
    
    
    Carrying amount at end of year
    
    
    23.6
    
    
    
    10.7
 -F- 45 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 NOTE 23: BORROWINGS AND LEASING AGREEMENTS
 Lihir Gold Limited as lessee
 $m2008
    
    
    2007CURRENTFinance leases (Note 37)
    
    
    0.3
    
    
    
    0.30.3
    
    
    
    0.3NON CURRENTFinance leases (Note 37)
    
    
    0.2
    
    
    
    0.70.2
    
    
    
    0.7
  NOTE 24: FINANCIAL INSTRUMENTS AND RISK
 a) Financial risk management overview
  1.
    
    Credit risk2.
    
    Liquidity risk3.
    
    Market risk, consisting of:
 
    
    Foreign exchange risk
    
    Interest rate risk
    
    Commodity price risk
    2008$mCarryingamount
    
    Fair valueFinancial assetsAvailable for sale financial assets(1)
    
    
    2.3
    
    
    
    2.3
 -F- 46 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 2008$mCarryingamount
    
    Fair valueReceivables(2)
    
    
    21.4
    
    
    
    21.2Cash and cash equivalents
    
    
    64.7
    
    
    
    64.7Derivative financial instruments(3) (4)
    
    
    0.7
    
    
    
    0.7Financial liabilitiesDerivative financial instruments(3) (4)
    
    
    52.4
    
    
    
    52.4Finance lease liabilities
    
    
    0.5
    
    
    
    0.5Accounts payable(2)
    
    
    54.6
    
    
    
    54.6Deferred settlement payable
    
    
    10.8
    
    
    
    10.8
 
 (1)
    
    The fair value of available for sale financial assets is calculated based upon the
market price of the security as at balance date.(2)
    
    The carrying value less impairment provision is taken to be the approximate fair
value of receivables and accounts payable due to their short-term nature.(3)
    
    The fair value of commodity contract derivative financial instruments is estimated
based upon quotes from the market makers of each specific instrument and represents the
estimated amounts that the Company would expect to receive or pay to terminate the agreements
as at balance date.(4)
    
    The fair value of forward exchange contract derivative financial instruments is
estimated based upon the listed market price and represents the estimated amounts that the
Company would expect to receive or pay to terminate the agreements as at balance date. 2007$mCarryingamount
    
    Fair valueFinancial assetsAvailable for sale financial assets(1)
    
    
    2.5
    
    
    
    2.5Receivables(2)
    
    
    15.3
    
    
    
    15.3Cash and cash equivalents
    
    
    174.2
    
    
    
    174.2Financial liabilitiesFinance lease liabilities
    
    
    1.0
    
    
    
    1.0Accounts payable(2)
    
    
    24.9
    
    
    
    24.9
 
 (1)
    
    The fair value of available for sale financial assets is calculated based upon the
market price of the security as at balance date.(2)
    
    The carrying value less impairment provision is taken to be the approximate fair
value of receivables and accounts payable due to their short-term nature. -F- 47 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 b) 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.
   Neither
    
    Past due but not impairedPast due
    
    past due
    
    Less
    
    Between
    
    GreaterCarrying
    
    and
    
    nor
    
    than 30
    
    30 and 90
    
    than 90amount
    
    impaired
    
    impaired
    
    days
    
    days
    
    days$m
    
    $m
    
    $m
    
    $m
    
    $m
    
    $m2008Other amounts
receivable from
third parties
(current)
    
    
    21.0
    
    
    
    5.0
    
    
    
    4.7
    
    
    
    0.6
    
    
    
    1.0
    
    
    
    14.7Other amounts
receivable from
third parties
(non-current)
    
    
    0.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.42007Other amounts
receivable from
third parties
(current)
    
    
    14.9
    
    
    
    4.2
    
    
    
    4.8
    
    
    
    1.6
    
    
    
    2.7
    
    
    
    5.8Other amounts
receivable from
third parties
(non-current)
    
    
    0.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.4
 -F- 48 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
   c) Liquidity risk
     CONSOLIDATED ENTITY
 Total
    
    TotalLess than
    
    Between 1
    
    Between 2
    
    Over 5
    
    contractual
    
    carrying1 year
    
    & 2 years
    
    & 5 years
    
    years
    
    cash flows
    
    amount2008Trade and other payables
    
    
    54.6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    54.6
    
    
    
    54.6Finance lease liabilities
    
    
    0.3
    
    
    
    0.2
    
    
    
    
    
    
    
    
    
    
    
    0.5
    
    
    
    0.5Derivative financial
instruments
    
    
    33.5
    
    
    
    18.9
    
    
    
    
    
    
    
    
    
    
    
    52.4
    
    
    
    52.4Deferred settlement payable
    
    
    10.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10.8
    
    
    
    10.82007Trade and other payables
    
    
    24.9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    24.9
    
    
    
    24.9Finance lease liabilities
    
    
    0.3
    
    
    
    0.4
    
    
    
    0.3
    
    
    
    
    
    
    
    1.0
    
    
    
    1.0
 -F- 49 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
  d) Foreign exchange risk
    (1)
    
    translational exposure in respect of non-functional currency monetary items(2)
    
    transactional exposure in respect of non-functional currency expenditure and
revenues.    -F- 50 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 Foreign exchange risk-10%
    
    
    +10%Carrying
    
    
    
    
    
    
    Profitamount
    
    
    Equity
    
    
    before tax
    
    
    Equity
    
    
    Profit2008
    
    $m
    
    
    $m
    
    
    $m
    
    
    $m
    
    
    $mAustralian dollar denominated balancesCash and cash equivalents
    
    
    4.3
    
    
    
    
    
    
    
    (0.4
    )
    
    
    
    
    
    
    0.4Receivables
    
    
    0.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Derivative financial instruments
    
    
    (51.7
    )
    
    
    5.2
    
    
    
    
    
    
    
    (5.2
    )
    
    
    Finance lease liabilities
    
    
    (0.5
    )
    
    
    
    
    
    
    (0.1
    )
    
    
    
    
    
    
    0.1Accounts payable
    
    
    (5.4
    )
    
    
    
    
    
    
    0.5
    
    
    
    
    
    
    
    (0.5
    )PNG kina denominated balancesCash and cash equivalents
    
    
    1.9
    
    
    
    
    
    
    
    (0.2
    )
    
    
    
    
    
    
    0.2Receivables
    
    
    8.9
    
    
    
    
    
    
    
    (0.9
    )
    
    
    
    
    
    
    0.9Accounts payable
    
    
    (6.1
    )
    
    
    
    
    
    
    0.6
    
    
    
    
    
    
    
    (0.6
    )CFA franc denominated balancesCash and cash equivalents
    
    
    0.6
    
    
    
    
    
    
    
    (0.1
    )
    
    
    
    
    
    
    0.1Accounts payable
    
    
    (2.1
    )
    
    
    
    
    
    
    0.2
    
    
    
    
    
    
    
    (0.2
    )Total increase / (decrease)
    
    
    
    
    
    
    5.2
    
    
    
    (0.4
    )
    
    
    (5.2
    )
    
    
    0.4
 -F- 51 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 Foreign exchange risk-10%
    
    
    +10%Carrying
    
    
    
    
    
    
    Profitamount
    
    
    Equity
    
    
    before tax
    
    
    Equity
    
    
    Profit2007
    
    $m
    
    
    $m
    
    
    $m
    
    
    $m
    
    
    $mAustralian dollar denominated balancesCash and cash equivalents
    
    
    59.3
    
    
    
    
    
    
    
    (5.9
    )
    
    
    
    
    
    
    5.9Receivables
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Derivative financial instruments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Finance lease liabilities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Accounts payable
    
    
    (2.6
    )
    
    
    
    
    
    
    0.3
    
    
    
    
    
    
    
    (0.3
    )PNG kina denominated balancesCash and cash equivalents
    
    
    7.5
    
    
    
    
    
    
    
    (0.7
    )
    
    
    
    
    
    
    0.7Receivables
    
    
    6.7
    
    
    
    
    
    
    
    (0.7
    )
    
    
    
    
    
    
    0.7Accounts payable
    
    
    (1.1
    )
    
    
    
    
    
    
    0.1
    
    
    
    
    
    
    
    (0.1
    )CFA franc denominated balancesCash and cash equivalents
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Accounts payable
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total increase / (decrease)
    
    
    
    
    
    
    
    
    
    
    (6.9
    )
    
    
    
    
    
    
    6.9
  e) Interest rate risk
  -F- 52 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
   Interest rate risk-50bps
    
    
    +50bpsCarrying
    
    
    
    
    
    
    Profitamount
    
    
    Equity
    
    
    before tax
    
    
    Equity
    
    
    Profit2008
    
    $m
    
    
    $m
    
    
    $m
    
    
    $m
    
    
    $mCash and cash equivalents
    
    
    64.7
    
    
    
    (0.3
    )
    
    
    (0.3
    )
    
    
    0.3
    
    
    
    0.3Total increase / (decrease)
    
    
    
    
    
    
    (0.3
    )
    
    
    (0.3
    )
    
    
    0.3
    
    
    
    0.3
 Interest rate risk-50bps
    
    
    +50bpsCarrying
    
    
    
    
    
    
    Profitamount
    
    
    Equity
    
    
    before tax
    
    
    Equity
    
    
    Profit2007
    
    $m
    
    
    $m
    
    
    $m
    
    
    $m
    
    
    $mCash and cash equivalents
    
    
    174.2
    
    
    
    (0.6
    )
    
    
    (0.6
    )
    
    
    0.6
    
    
    
    0.6Total increase / (decrease)
    
    
    
    
    
    
    (0.6
    )
    
    
    (0.6
    )
    
    
    0.6
    
    
    
    0.6
  f) Price Risk
   -F- 53 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
  Gold price risk+10%
    
    -10%ProfitCarrying amount
    
    Equity
    
    before tax
    
    Equity
    
    Profit2008
    
    $m
    
    $m
    
    $m
    
    $m
    
    $mDerivative financial instruments liability
    
    
    52.4
    
    
    
    (9.9
    )
    
    
    (9.9
    )
    
    
    9.9
    
    
    
    9.9Total increase / (decrease)
    
    
    
    
    
    
    (9.9
    )
    
    
    (9.9
    )
    
    
    9.9
    
    
    
    9.9
  g) Derivative financial instruments
 $mDerivative financial instruments
    
    2008
    
    2007Current assets
- Forward currency contracts
    
    
    0.4
    
    
    
    0.4
    
    
    
    Non-current assets
- Forward currency contracts
    
    
    0.3
    
    
    
    0.3
    
    
    
    Current liabilities
- Forward commodity contracts
    
    
    33.5
    
    
    
    33.5
    
    
    
    Non-current liabilities
- Forward commodity contracts
    
    
    18.9
    
    
    
    18.9
    
    
    
    
   -F- 54 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 Contractprice
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Totalper
    
    Less than 1
    
    Between 1 &
    
    Between 2 &
    
    
    
    
    
    carrying2008
    
    Ounces
    
    ounce
    
    year
    
    2 years
    
    5 years
    
    Over 5 years
    
    valueAssets- Forward currency contracts
    
    
    
    
    
    
    
    
    
    
    0.4
    
    
    
    0.3
    
    
    
    
    
    
    
    
    
    
    
    0.7Liabilities- Forward commodity contracts
    
    
    115,797
    
    
    
    A$600
    
    
    
    33.5
    
    
    
    18.9
    
    
    
    
    
    
    
    
    
    
    
    52.4
 h) Gold hedge book close out
      Total gross pre-tax
    
    
    
    
    
    Total net post-tax hedgehedge loss
    
    Total tax effect
    
    lossDesignation Year
    
    $m
    
    $m
    
    $m2009
    
    
    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
    )
    
    
    4.2240.2
    
    
    
    (72.0
    )
    
    
    168.2
 i) Gold hedge book acquisition
  -F- 55 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
  Contractprice per
    
    Less than 1
    
    Between 1 &
    
    Between 2 &2008
    
    Ounces
    
    ounce
    
    year
    
    2 years
    
    5 years
    
    Over 5 years
    
    Total- Forward commodity
contracts
    
    
    115,797
    
    
    
    A$600
    
    
    
    A$25.1m
    
    
    
    A$14.0m
    
    
    
    
    
    
    
    
    
    
    
    A$39.1m
 j) Capital management
    NOTE 25: DEFERRED SETTLEMENT PAYABLE
 $m2008
    
    2007CURRENTDeferred settlement payable
    
    
    10.8
    
    
    
    10.8
    
    
    
    
  NOTE 26: SHARE CAPITAL
 $m2008
    
    
    2007(a) Issued and paid up capitalOrdinary sharesOpening balance
    
    
    2,319.7
    
    
    
    1,027.1
 -F- 56 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 $m2008
    
    
    2007New issues  MRL Capital Limited
    
    
    5.2
    
    
    
    New issues  Equigold acquisition
    
    
    756.0
    
    
    
    New issues  Ballarat acquisition
    
    
    
    
    
    
    316.5New issues  capital raising
    
    
    
    
    
    
    989.0Less: Transaction costs
    
    
    
    
    
    
    (11.6
    )Shares reclassified as treasury shares (1)
    
    
    (0.9
    )
    
    
    (1.3
    )Closing balance
    
    
    3,080.0
    
    
    
    2,319.7
 Number of shares 0002008
    
    
    2007(b) Issued and paid up capitalOpening balance
    
    
    1,903,912
    
    
    
    1,284,049New issues  capital raising
    
    
    
    
    
    
    508,277New issues  MRL Capital Limited
    
    
    3,284
    
    
    
    New issues  Equigold acquisition
    
    
    280,405
    
    
    
    New issues  Ballarat acquisition
    
    
    
    
    
    
    111,996Shares reclassified as treasury shares(1)
    
    
    (546
    )
    
    
    (410
    )Closing balance
    
    
    2,187,055
    
    
    
    1,903,912
 
 (1)
    
    The treasury restricted executive shares are shares purchased for the
LESP (see Note 31, Share Based Payments). On consolidation, shares held under the LESP are
offset against share capital.   Equigold acquisition
  Ballarat acquisition
  Capital raising
  -F- 57 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 MRL Capital Limited
  NOTE 27: RESERVES
 $m2008
    
    
    2007 Revised(a) ReservesHedging reserve  cash flow hedges
    
    
    (197.4
    )
    
    
    (221.9
    )Employee Share based payments reserve
    
    
    8.8
    
    
    
    3.3Landowner Share based payments reserve
    
    
    
    
    
    
    5.2Fair value reserve
    
    
    (0.8
    )
    
    
    0.8Foreign currency translation reserve
    
    
    (127.6
    )
    
    
    42.6Other reserves
    
    
    4.4
    
    
    
    (312.6
    )
    
    
    (170.0
    )Movements:Hedging reserve  cash flow hedgesOpening balance
    
    
    (221.9
    )
    
    
    (256.1
    )Fair value of cash flow hedges
    
    
    (32.7
    )
    
    
    (59.1
    )Deferred hedging gains / (losses)
    
    
    76.7
    
    
    
    97.8Deferred taxation
    
    
    (19.5
    )
    
    
    (4.5
    )(197.4
    )
    
    
    (221.9
    )Employee share based payments reserveOpening balance
    
    
    3.3
    
    
    
    0.2Share rights expensed
    
    
    4.7
    
    
    
    2.9Deferred taxation
    
    
    0.8
    
    
    
    0.28.8
    
    
    
    3.3Landowners share based payments reserveOpening balance
    
    
    5.2
    
    
    
    5.2Shares issued
    
    
    (5.2
    )
    
    
    
    
    
    
    5.2Fair value reserveOpening balance
    
    
    0.8
    
    
    
    Fair value of available for sale financial assets
    
    
    (2.0
    )
    
    
    1.2Deferred tax
    
    
    0.4
    
    
    
    (0.4
    )(0.8
    )
    
    
    0.8Foreign currency translation reserveOpening balance
    
    
    42.6
    
    
    
    Currency translation differences arising during the year
    
    
    (158.5
    )
    
    
    42.6Deferred tax
    
    
    (11.7
    )
    
    
    (127.6
    )
    
    
    42.6Other reserveOpening balance
    
    
    
    
    
    
    Purchase of minority interests
    
    
    4.4
    
    
    
    4.4
    
    
    
    (b) Retained Profits(1)Movements in retained profits / (losses) were as follows:Opening balance
    
    
    18.8
    
    
    
    42.9Net profit for the year
    
    
    109.3
    
    
    
    (24.1
    )128.1
    
    
    
    18.8
 
 (1)
    
    Revised (refer Note 35) -F- 58 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 Nature and purpose of reserves
 Hedging reserve  cash flow hedges
  Employee 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.
 Fair value reserve
  Foreign currency translation reserve
  Other reserve
  NOTE 28: MINORITY INTERESTS
 $m2008
    
    2007Minority interest in Equigold Côte dIvoire SA and Equigold
Mines Côte dIvoire SAShare capital
    
    
    31.1
    
    
    
    Retained earnings
    
    
    0.9
    
    
    
    32.0
    
    
    
    Movements in minority interest in retained earnings:Balance at the beginning of the year
    
    
    
    
    
    
    Interest in profit / (loss) after tax
    
    
    0.9
    
    
    
    0.9
    
    
    
    Total minority interests
    
    
    32.0
    
    
    
    
 -F- 59 -




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##### 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 Ltd
    
    
    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
    %
    
    AustraliaEquigold Pty Ltd
    
    
    100
    %
    
    AustraliaSwindon Holdings Pty Ltd
    
    
    100
    %
    
    AustraliaStanmines Pty Ltd
    
    
    100
    %
    
    AustraliaKim Resources Pty Ltd
    
    
    100
    %
    
    AustraliaEquigold Mines CI SA
    
    
    90
    %
    
    Côte dIvoireEquigold CI SA
    
    
    98
    %
    
    Côte dIvoire
    NOTE 30: BUSINESS COMBINATIONS
 a) Current year business combinations
 Equigold NL
    -F- 60 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
    Provisional fairCarrying value
    
    Fair value(1)
    
    valueUS$m
    
    adjustments
    
    US$mCash and cash equivalents
    
    
    14.4
    
    
    
    
    
    
    
    14.4Receivables
    
    
    8.3
    
    
    
    
    
    
    
    8.3Inventories
    
    
    12.7
    
    
    
    5.9
    
    
    
    18.6Other assets
    
    
    0.3
    
    
    
    
    
    
    
    0.3Deferred mining costs
    
    
    2.9
    
    
    
    
    
    
    
    2.9Property, plant, equipment and capitalised exploration
    
    
    159.0
    
    
    
    (38.0
    )
    
    
    121.0Mineral reserves and resources
    
    
    
    
    
    
    624.1
    
    
    
    624.1Exploration potential
    
    
    
    
    
    
    162.3
    
    
    
    162.3Intangibles assets
    
    
    
    
    
    
    16.2
    
    
    
    16.2Available for sale financial asset
    
    
    6.8
    
    
    
    
    
    
    
    6.8Accounts payable & accrued liabilities
    
    
    (16.8
    )
    
    
    
    
    
    
    (16.8
    )Contingent liabilities (2)
    
    
    
    
    
    
    (10.0
    )
    
    
    (10.0
    )Provisions
    
    
    (13.1
    )
    
    
    
    
    
    
    (13.1
    )Derivative financial instruments
    
    
    (52.8
    )
    
    
    
    
    
    
    (52.8
    )Deferred income tax assets / (liabilities)
    
    
    21.5
    
    
    
    (209.5
    )
    
    
    (188.0
    )Borrowings
    
    
    (49.0
    )
    
    
    
    
    
    
    (49.0
    )Net assets
    
    
    94.2
    
    
    
    551.0
    
    
    
    645.2Goodwill arising on business combination (1)
    
    
    
    
    
    
    165.2
    
    
    
    165.2Minority interests
    
    
    
    
    
    
    (49.1
    )
    
    
    (49.1
    )Total cost
    
    
    94.2
    
    
    
    667.1
    
    
    
    761.3
 
 (1)
    
    The goodwill balance is a result of the acquisition of certain assets for which a
deferred tax liability is recognised on acquisition that differs from the available tax base of
these assets.(2)
    
    In attributing value to the potential exploration projects acquired, it has been
assumed that through the realisation of these projects the Côte dIvoire government will take a 10%
stake on any projects that proceed to operate as mining projects. This potential 10% interest has
been recognised as a contingent liability.   -F- 61 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 Purchase consideration
 US$mShares issued (280,405,288 shares at A$2.87 at rate of US$0.9394 per A$1)
    
    
    756.0Direct costs relating to the acquisition
    
    
    5.3761.3
 Reconciliation to cash flow
 Year ended31 December2008 US$mAcquisition of subsidiary net of cash acquired:Cash balances acquired
    
    
    14.4Less: direct cash costs of acquisition
    
    
    (5.3
    )Net cash inflow
    
    
    9.1
 b) Prior year business combinations
  Provisional fairvalue aspreviouslyreported
    
    
    
    
    
    FinalUS$m
    
    Adjustments(1)
    
    US$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
    
    
    
    
    
    
    
    27.2Intangibles  exploration rights, mining information
and forestry licence
    
    
    46.3
    
    
    
    
    
    
    
    46.3Development property  mining tenements
    
    
    225.0
    
    
    
    (5.1
    )
    
    
    219.9Development
property  development assets
    
    
    47.6
    
    
    
    
    
    
    
    47.6Deferred tax asset
    
    
    20.8
    
    
    
    8.5
    
    
    
    29.3Accounts payable
    
    
    (3.9
    )
    
    
    
    
    
    
    (3.9
    )Borrowings
    
    
    (1.1
    )
    
    
    
    
    
    
    (1.1
    )Provisions
    
    
    (1.0
    )
    
    
    
    
    
    
    (1.0
    )Deferred tax liability
    
    
    (68.0
    )
    
    
    1.2
    
    
    
    (66.8
    )Net assets
    
    
    316.7
    
    
    
    4.6
    
    
    
    321.3Goodwill arising on business combination (2)
    
    
    36.3
    
    
    
    (4.6
    )
    
    
    31.7Total cost
    
    
    353.0
    
    
    
    
    
    
    
    353.0
 
 (1)
    
    The main adjustments relate to finalisation of the available tax losses and tax
obligations on acquisition and the associated iterative effect on mining tenements, goodwill
and deferred tax liabilities. As required under IFRS 3, all adjustments have been presented as
if the accounting had been completed on acquisition.(2)
    
    The goodwill balance is a result of the acquisition of certain assets for which a
deferred tax liability is recognised on acquisition that differs from the available tax base
of these assets -F- 62 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 Purchase consideration
 US$mShares issued
    
    
    316.5Cash paid
    
    
    33.0Direct costs relating to the acquisition
    
    
    3.5353.0
 Reconciliation to cash flow
 31 December2007US$mAcquisition of subsidiary net of cash acquired:Cash balances acquired
    
    
    22.6Less: direct cash costs of acquisition
    
    
    (3.0
    )Net inflow of cash
    
    
    19.6
 NOTE 31: SHARE BASED PAYMENTS
 a) Lihir Executive Share Plan
      -F- 63 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
  b) Fair value of share rights granted
    (1)
    
    Exercise price: $ nil (2007  $ nil)(2)
    
    Expected volatility: 46.9% (2007  42%)(3)
    
    Risk-free interest rate: 6.81% (2007  6.12%)(4)
    
    Expected life of right (years): 10 years (2007  10 years)(5)
    
    Weighted average share price at grant date: $2.98 (2007  $3.08)(6)
    
    Expected dividend yield: 0% (2007  0%)
   c) Summary of movements and other information
  Per sharerightindicative
    
    
    
    
    
    
    
    Number
    
    Number
    
    Number
    
    
    
    
    
    Number
    
    NumberExercise price
    
    value
    
    Performance
    
    Number at
    
    granted during
    
    exercised
    
    forfeited during
    
    Other Changes
    
    outstanding at
    
    exercisable atUS$
    
    US$
    
    conditions
    
    1-Jan-08
    
    period
    
    during period
    
    period
    
    (1)
    
    31-Dec-08
    
    31-Dec-08
    
    2.529
    
    1
    
    
    163,183
    
    
    
    
    
    
    
    (114,133
    )
    
    
    (46,944
    )
    
    
    31,238
    
    
    
    33,344
    
    
    
    33,344
    
    2.602
    
    2
    
    
    167,192
    
    
    
    
    
    
    
    (4,459
    )
    
    
    
    
    
    
    (151,182
    )
    
    
    11,551
    
    
    
    11,551
    
    1.928
    
    3
    
    
    250,763
    
    
    
    
    
    
    
    (213,395
    )
    
    
    
    
    
    
    24,061
    
    
    
    61,429
    
    
    
    61,429
    
    1.978
    
    4
    
    
    250,775
    
    
    
    
    
    
    
    (213,396
    )
    
    
    
    
    
    
    24,052
    
    
    
    61,431
    
    
    
    61,431
    
    
    
    5
    
    
    7,603
    
    
    
    
    
    
    
    (1,192
    )
    
    
    
    
    
    
    
    
    
    
    6,411
    
    
    
    6,411
    
    1.542
    
    6
    
    
    1,840,903
    
    
    
    2,154,285
    
    
    
    
    
    
    
    (48,313
    )
    
    
    
    
    
    
    3,946,875
    
    
    
    
    
    1.507
    
    7
    
    
    1,840,928
    
    
    
    2,154,307
    
    
    
    
    
    
    
    (48,313
    )
    
    
    
    
    
    
    3,946,922
    
    
    
    Total
    
    
    
    
    
    
    4,521,347
    
    
    
    4,308,592
    
    
    
    (546,575
    )
    
    
    (143,570
    )
    
    
    (71,831
    )
    
    
    8,067,963
    
    
    
    174,166
 
 (1)
    
    This represents the transfer of some of the share rights from performance condition
2 evenly across performance conditions 1, 3 & 4.  -F- 64 -




---



##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 Per share rightindicative
    
    
    
    
    
    
    
    
    
    Number
    
    Number
    
    Number
    
    Number
    
    NumberExercise price
    
    value
    
    Performance
    
    Number at
    
    granted during
    
    exercised
    
    forfeited during
    
    outstanding at
    
    exercisable atUS$
    
    US$
    
    conditions
    
    1-Jan-07
    
    period
    
    during period
    
    period
    
    31-Dec-07
    
    31-Dec-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 (1)546,575
    
    23-29 Sep 2008
    
    A$2.75
 
 (1)
    
    Purchased over a 7 day period due to restrictions on the volume that could be traded
on any one day.
 Expenses arising from share-based payment transactions
  $m2008
    
    2007Executive share plan
    
    
    4.7
    
    
    
    2.94.7
    
    
    
    2.9
   1.
    
    Individuals are set key performance indicators (KPIs) based around the Companys performance
in line with Board policies to raise the long-term value of the Company. The performance
conditions were assessed by the Board.2.
    
    This performance condition was assessed by the Board against changes in the net present value
of the Company. This assessment was 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 were not 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.3.
    
    This performance condition was 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
Month Employed until the testing date using the VWAP (volume weighted average share price);
and
    
    Average total shareholder return of the Comparator Group using the Comparator Groups
VWAP for the same time periods as applicable above.
 -F- 65 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 Total shareholder return or TSR is, broadly, share price growth and dividends reinvested,
excluding the impacts of franking credits and taxations.4.
    
    This performance condition was assessed to the extent to which the Companys TSR increased
over the performance period using the VWAP Month for each participant as the starting share
value for the TSR until the testing date VWAP.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.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.
 NOTE 32: 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 33: KEY MANAGEMENT PERSONNEL
 Directors
  (i)
    
    Chairman  Non-Executive
Dr Ross Garnaut
 -F- 66 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 (ii)
    
    Executive Directors
Mr Arthur Hood, Managing Director
 (iii)
    
    Non-Executive Directors
 Mr Bruce Brook
Dr Peter Cassidy
Dr Michael Etheridge
Mrs Winifred Kamit
Mr Geoff Loudon
Mr Alister Maitland
 Other key management personnel
  Name
    

Position
    

EmployerPhil Baker
    
    Chief Financial Officer
    
    Lihir Services Australia Pty LtdMark Clark
    
    Executive General Manager West Africa
and Corporate Services (appointed 17
June 2008, resigned 31 October 2008)
    
    Lihir Services Australia Pty LtdNoel Foley
    
    Executive General Manager, PNG Operations
    
    Lihir Gold LimitedGraham Folland
    
    Executive General Manager Corporate Development
    
    Lihir Services Australia Pty LtdTim Fry
    
    Executive General Manager West Africa
and Corporate Services (appointed 1
November 2008)
    
    Lihir Services Australia Pty LtdMorgan Hart
    
    Executive General Manager Australia and
Africa Operations (appointed 17 June
2008, resigned 31 December 2008)
    
    Lihir Services Australia Pty LtdStuart MacKenzie
    
    Group Secretary and General Counsel
    
    Lihir Services Australia Pty Ltd
   Name
    

Position
    

EmployerPhil Baker
    
    Chief Financial Officer
(from January 21, 2007)
    
    Lihir Services Australia Pty LtdJoe Dowling
    
    General Manager Corporate Affairs
    
    Lihir Services Australia Pty LtdMurray Eagle
    
    General Manager External Affairs &
Sustainable Development (retired January, 31 2008)
    
    Lihir Gold LimitedNoel Foley
    
    Executive General Manager, Operations
    
    Lihir Gold LimitedGraham Folland
    
    General Manager Corporate Development
    
    Lihir Services Australia Pty LtdPaul Fulton
    
    Chief Financial Officer(from January 1, 2007 to January 20, 2007)
    
    Lihir Services Australia Pty Ltd
 -F- 67 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 Name
    
    Position
    
    EmployerRichard Laufmann
    
    Executive General Manager Australian Operations and Business Development(from 8 March 2007 to 8 June 2007)
    
    Lihir Services Australia Pty LtdStuart MacKenzie
    
    Group Secretary and General Counsel
    
    Lihir Services Australia Pty LtdWojciech Ozga
    
    General Manager, Ballarat Operations(from 8 March 2007, resigned January, 31 2008)
    
    Lihir Services Australia Pty LtdRon Yung
    
    General Manager Organization Performance
    
    Lihir Services Australia Pty Ltd
 a) Key management personnel compensation
 $2008
    
    2007Short-term employee benefits
    
    
    3,923,907
    
    
    
    4,884,602Post-employment benefits
    
    
    308,711
    
    
    
    424,112Termination benefits
    
    
    
    
    
    
    842,467Long-term benefits
    
    
    26,517
    
    
    
    25,967Share-based payments
    
    
    2,650,240
    
    
    
    1,920,7816,909,375
    
    
    
    8,097,929
 b) Equity instrument disclosures relating to key management personnel
 Share rights provided as remuneration
  Share right holdings
  2008
 Balance at
    
    Equity settled
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance atstart of the
    
    compensation
    
    Equity settled
    
    
    
    
    
    Other
    
    end of the
    
    Vested andName
    
    year
    
    (rights issue)
    
    compensation
    
    Exercised
    
    changes
    
    year
    
    exercisable
    
    UnvestedDirectors of Lihir Gold
LimitedArthur Hood
    
    
    1,667,724
    
    
    
    
    
    
    
    1,649,164
    
    
    
    (129,249
    )
    
    
    (85,028
    )
    
    
    3,102,611
    
    
    
    
    
    
    
    3,102,611Other key management
personnel of the Consolidated EntityPhil Baker
    
    
    251,786
    
    
    
    
    
    
    
    192,711
    
    
    
    
    
    
    
    
    
    
    
    444,497
    
    
    
    45,074
    
    
    
    399,423Mark Clark
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Noel Foley
    
    
    242,342
    
    
    
    
    
    
    
    183,644
    
    
    
    (41,996
    )
    
    
    (1,388
    )
    
    
    382,602
    
    
    
    
    
    
    
    382,602Graham Folland
    
    
    204,343
    
    
    
    
    
    
    
    158,705
    
    
    
    (33,355
    )
    
    
    (451
    )
    
    
    329,242
    
    
    
    
    
    
    
    329,242Tim Fry
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Morgan Hart
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stuart MacKenzie
    
    
    179,821
    
    
    
    
    
    
    
    136,033
    
    
    
    (30,989
    )
    
    
    
    
    
    
    284,865
    
    
    
    
    
    
    
    284,8652,546,016
    
    
    
    
    
    
    
    2,320,257
    
    
    
    (235,589
    )
    
    
    (86,867
    )
    
    
    4,543,817
    
    
    
    45,074
    
    
    
    4,498,743
 -F- 68 -




---



##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 2007
 Balance at
    
    Equity settled
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance at
    
    Vestedstart of the
    
    compensation
    
    Equity settled
    
    
    
    
    
    Other
    
    end of the
    
    andName
    
    year
    
    (rights issue)
    
    compensation
    
    Exercised
    
    changes
    
    year
    
    exercisable
    
    UnvestedDirectors of Lihir Gold LimitedArthur 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
 Share
holdings
  2008
 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
    
    
    101,523
    
    
    
    
    
    
    
    12,000
    
    
    
    113,523Mr Arthur Hood
    
    
    353,704
    
    
    
    129,249
    
    
    
    35,000
    
    
    
    517,953Mr Bruce Brook
    
    
    33,334
    
    
    
    
    
    
    
    20,000
    
    
    
    53,334Dr Peter Cassidy
    
    
    44,301
    
    
    
    
    
    
    
    
    
    
    
    44,301Dr Michael Etheridge
    
    
    61,728
    
    
    
    
    
    
    
    
    
    
    
    61,728Mrs Winifred Kamit
    
    
    2,667
    
    
    
    
    
    
    
    
    
    
    
    2,667Mr Geoff Loudon
    
    
    143,840
    
    
    
    
    
    
    
    
    
    
    
    143,840Mr Alister Maitland
    
    
    30,864
    
    
    
    
    
    
    
    50,000
    
    
    
    80,864Other key management personnel
of the Consolidated EntityPhil Baker
    
    
    10,000
    
    
    
    
    
    
    
    (10,000
    )
    
    
    Noel Foley
    
    
    97,070
    
    
    
    41,996
    
    
    
    11,500
    
    
    
    150,566Graham Folland
    
    
    47,651
    
    
    
    33,355
    
    
    
    7,642
    
    
    
    88,648Tim Fry
    
    
    
    
    
    
    
    
    
    
    2,457
    
    
    
    2,457Morgan Hart
    
    
    1,386,000
    
    
    
    
    
    
    
    (389,510
    )
    
    
    996,490Stuart MacKenzie
    
    
    14,969
    
    
    
    30,989
    
    
    
    
    
    
    
    45,958
 -F- 69 -




---



##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 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 EntityPhil Baker
    
    
    
    
    
    
    
    
    
    
    10,000
    
    
    
    10,000Joe Dowling
    
    
    15,000
    
    
    
    37,220
    
    
    
    5,000
    
    
    
    57,220Murray Eagle(1)
    
    
    
    
    
    
    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(1)
    
    
    
    
    
    
    
    
    
    
    54,000
    
    
    
    54,000Ron Yung
    
    
    2,000
    
    
    
    19,307
    
    
    
    667
    
    
    
    21,974
 
 (1)
    
    Employment with Consolidated Entity ceased on 31 January 2008. -F- 70 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 c) Outstanding balances receivable from key management personnel
 Aggregates for key management personnel
 Number inInterest paid
    
    
    
    
    
    ConsolidatedBalance at the
    
    and payable for
    
    Interest not
    
    Balance at the
    
    Entity at the endstart of the year
    
    the year
    
    charged
    
    end of the year
    
    of the year$
    
    $
    
    $
    
    $
    
    $2008
    
    
    
    
    
    
    
    
    
    2007
    
    
    
    
    
    373
    
    8,769
    
    1(1)
     Remuneration and benefit band
    
    Number of employees$US
    
    2008
    
    2007
    
    2006$  30,001 - $  40,000
    
    13
    
    37
    
    48$  40,001 - $  50,000
    
    74
    
    27
    
    25$  50,001 - $  60,000
    
    55
    
    24
    
    17$  60,001 - $  70,000
    
    75
    
    20
    
    14$  70,001 - $  80,000
    
    77
    
    26
    
    7$  80,001 - $  90,000
    
    55
    
    13
    
    11$  90,001 - $100,000
    
    45
    
    11
    
    8$100,001 - $110,000
    
    29
    
    15
    
    7$110,001 - $120,000
    
    30
    
    17
    
    10$120,001 - $130,000
    
    41
    
    36
    
    6$130,001 - $140,000
    
    30
    
    24
    
    7$140,001 - $150,000
    
    25
    
    29
    
    5$150,001 - $160,000
    
    16
    
    21
    
    5$160,001 - $170,000
    
    21
    
    20
    
    6$170,001 - $180,000
    
    17
    
    37
    
    6$180,001 - $190,000
    
    10
    
    10
    
    8$190,001 - $200,000
    
    15
    
    2
    
    2$200,001 - $210,000
    
    8
    
    2
    
    1$210,001 - $220,000
    
    6
    
    4
    
    5$220,001 - $230,000
    
    3
    
    1
    
    $230,001 - $240,000
    
    2
    
    1
    
    3$240,001 - $250,000
    
    3
    
    3
    
    1$250,001 - $260,000
    
    4
    
    3
    
    $260,001 - $270,000
    
    2
    
    4
    
    1$270,001 - $280,000
    
    2
    
    1
    
    1$280,001 - $290,000
    
    3
    
    
    
    1$300,001 - $310,000
    
    1
    
    
    
    $310,001 - $320,000
    
    4
    
    
    
    1
 -F- 71 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 Remuneration and benefit band
    
    Number of employees$US
    
    2008
    
    2007
    
    2006$340,001 - $350,000
    
    2
    
    
    
    $350,001 - $360,000
    
    3
    
    1
    
    $360,001 - $370,000
    
    1
    
    1
    
    $450,001 - $460,000
    
    
    
    1
    
    1$470,001 - $480,000
    
    
    
    1
    
    $480,001 - $490,000
    
    
    
    1
    
    $530,001 - $540,000
    
    1
    
    
    
    $610,001 - $620,000
    
    
    
    1
    
    $640,001 - $650,000
    
    1
    
    1
    
    $650,001 - $660,000
    
    
    
    1
    
    $660,001 - $670,000
    
    1
    
    
    
    $730,001 - $740,000
    
    1
    
    
    
    
 NOTE 34: RETIREMENT BENEFITS
  NOTE 35: COMPARATIVE REVISION
 Comparative period adjustments to income statement items
 2007
    
    
    
    
    
    
    2007
    
    
    2006
    
    
    
    
    
    
    2006US$m
    
    
    
    
    
    
    US$m
    
    
    US$m
    
    
    
    
    
    
    US$mAs reported
    
    
    adjustment
    
    
    As revised
    
    
    As reported
    
    
    adjustment
    
    
    As revised(a)/(b) Income tax benefit
    
    
    (11.7
    )
    
    
    
    
    
    
    (11.7
    )
    
    
    22.1
    
    
    
    (1.1
    )
    
    
    21.0
 Comparative
period adjustments to other comprehensive income
 2007
    
    
    
    
    
    
    2007
    
    
    2006
    
    
    
    
    
    
    2006US$m
    
    
    
    
    
    
    US$m
    
    
    US$m
    
    
    
    
    
    
    US$mAs reported
    
    
    adjustment
    
    
    As revised
    
    
    As reported
    
    
    adjustment
    
    
    As revised(d) Share based payments
    
    
    2.9
    
    
    
    (2.9
    )
    
    
    
    
    
    
    5.5
    
    
    
    (5.5
    )
    
    
    (d) Income
tax on other comprehensive income
    
    
    (4.7
    )
    
    
    (0.2
    )
    
    
    (4.9
    )
    
    
    20.3
    
    
    
    0.1
    
    
    
    20.4
 Comparative period adjustments to balance items
 2007
    
    
    
    
    
    
    2007
    
    
    2006
    
    
    
    
    
    
    2006US$m
    
    
    
    
    
    
    US$m
    
    
    US$m
    
    
    
    
    
    
    US$mAs reported
    
    
    adjustment
    
    
    As revised
    
    
    As reported
    
    
    adjustment
    
    
    As reviseda) Deferred tax asset
    
    
    92.1
    
    
    
    9.2
    
    
    
    101.3
    
    
    
    86.2
    
    
    
    7.4
    
    
    
    93.6c) Property, plant and equipment
    
    
    1,430.6
    
    
    
    (5.6
    )
    
    
    1,425.0
    
    
    
    
    
    
    
    
    
    
    
    c) Intangible assets
    
    
    98.4
    
    
    
    (4.9
    )
    
    
    93.5
    
    
    
    
    
    
    
    
    
    
    
    b)/c) Deferred tax liability
    
    
    (50.8
    )
    
    
    8.7
    
    
    
    (42.1
    )
    
    
    
    
    
    
    
    
    
    
    a)/b) Opening retained
earnings
    
    
    (11.4
    )
    
    
    (7.4
    )
    
    
    (18.8
    )
    
    
    18.3
    
    
    
    (6.3
    )
    
    
    12.0
 a)
    
    A revision of deferred tax balances was undertaken in Lihir Gold Limited which was
attributable to the Lihir Island operation and was made to reconcile the previously reported
tax balances to amendments sought for various income tax returns for the periods 1998-2004.
The effect of this revision for each relevant year was: an increase of $10 million in deferred
tax benefit in 2004, a decrease in deferred tax benenfit of $3.7 million in 2005, an increase
in deferred tax benefit of $1.1 million in 2006, an increase of $1.8 million in deferred tax
 -F- 72 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 benefit in the year ended 31 December 2007, an increase of $7.4 million in opening retained
earnings at 1 January 2007 and an increase of $9.2 million in deferred tax assets.b)
    
    Deferred income tax expense increased by $1.8 million to reflect an accounting adjustment in
relation to opening deferred tax adjustments in Ballarat Goldfields NL.c)
    
    Finalisation of the Ballarat business combination and subsequent adjustments to the
provisional accounting values as illustrated in Note 30(b) and translation of these final
adjustments to the closing $US rate at 31 December 2007.d)
    
    Share based payments and the associated tax effect is now disclosed as a separate item within the statements of changes in equity.
 NOTE 36: AUDITORS REMUNERATION
  $2008
    
    2007
    
    2006(a) Assurance servicesAudit servicesPricewaterhouseCoopers, PNG Firm
    
    
    239,420
    
    
    
    154,843
    
    
    
    340,333PricewaterhouseCoopers, Other
Overseas Firms
    
    
    957,680
    
    
    
    530,295
    
    
    
    114,976Total remuneration for audit services
    
    
    1,197,100
    
    
    
    685,138
    
    
    
    455,309Other assurance servicesPricewaterhouseCoopers, PNG Firm
    
    
    
    
    
    
    16,026
    
    
    
    58,115PricewaterhouseCoopers, Other
Overseas Firms
    
    
    422,752
    
    
    
    625,664
    
    
    
    54,254Total remuneration for other assurance
services
    
    
    422,752
    
    
    
    641,690
    
    
    
    112,369Total remuneration for assurance services
    
    
    1,619,852
    
    
    
    1,326,828
    
    
    
    567,678(b) Taxation servicesPricewaterhouseCoopers
    
    
    141,453
    
    
    
    53,598
    
    
    
    78,884Total remuneration for taxation services
    
    
    141,453
    
    
    
    53,598
    
    
    
    78,884
 NOTE 37: CAPITAL AND LEASING COMMITMENTS
 Operating lease commitments
 $m2008
    
    2007Payable- not later than one year
    
    
    2.2
    
    
    
    0.7- later than one year but not later than 2 years
    
    
    0.9
    
    
    
    0.5- later than two years but not later than 5 years
    
    
    1.2
    
    
    
    0.7- later than 5 years
    
    
    0.1
    
    
    
    4.4
    
    
    
    1.9
  -F- 73 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 Finance lease commitments
 $m2008
    
    2007Payable- not later than one year
    
    
    0.3
    
    
    
    0.4- later than one year but not later than 2 years
    
    
    0.2
    
    
    
    0.4- later than two years but not later than 5 years
    
    
    
    
    
    
    0.3Total minimum lease payments
    
    
    0.5
    
    
    
    1.1Future finance charges
    
    
    
    
    
    
    (0.1
    )Total finance lease liability
    
    
    0.5
    
    
    
    1.0Representing lease liabilities:Current
    
    
    0.3
    
    
    
    0.3Non-current
    
    
    0.2
    
    
    
    0.70.5
    
    
    
    1.0
  Capital expenditure commitments
 $m2008
    
    2007Capital expenditure commitments contracted for:Payable  not later than one year
    
    
    83.7
    
    
    
    9.0Payable  not later than two years
    
    
    13.2
    
    
    
    96.9
    
    
    
    9.0
  NOTE 38: CONTINGENT LIABILITIES AND CONTINGENT ASSETS
 Contingent liabilities
   Contingent assets
  -F- 74 -




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##### Table of Contents



LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
 NOTE 39: EARNINGS PER SHARE
  $m2008
    
    
    2007
    
    
    2006Net profit / (loss) attributable to ordinary shareholders
    
    
    109.3
    
    
    
    (24.1
    )
    
    
    54.9Weighted average number of ordinary shares (thousands)
    
    
    2,057.3
    
    
    
    1,713.8
    
    
    
    1,284.2Basic EPS (cents/share)
    
    
    5.3
    
    
    
    (1.4
    )
    
    
    4.2Diluted number of ordinary shares (thousands)
    
    
    2,058.7
    
    
    
    1,717.4
    
    
    
    1,287.5Diluted EPS (cents/share)
    
    
    5.3
    
    
    
    (1.4
    )
    
    
    4.2
 Reconciliation of weighted average number of ordinary shares
 $m2008
    
    
    2007
    
    
    2006Weighted average number used in calculating basic
earnings per share (in millions)
    
    
    2,057.3
    
    
    
    1,713.8
    
    
    
    1,284.2Adjustments for calculation of diluted earnings per share:Contingently issuable shares
    
    
    
    
    
    
    3.3
    
    
    
    Effect of share options on issue
    
    
    1.4
    
    
    
    0.3
    
    
    
    Weighted average number used in calculating diluted
earnings per share (in millions)
    
    
    2,058.7
    
    
    
    1,717.4
    
    
    
    1,284.2
 NOTE 40: DIVIDENDS PER SHARE
  NOTE 41: SUBSEQUENT EVENTS
 Capital raising
  
    
    to accelerate key stages of the planned process plan expansion at Lihir Island in PNG,
taking advantage of changing market conditions that have led to reduced prices and shorter
lead-times for components;
    
    to position the company for further growth opportunities that emerge, including west
Africa; and
    
    to provide continued financial strength and flexibility for the group.
  -F- 75-




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LIHIR GOLD LIMITED
 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
  Ballarat Impairment
       -F- 76-




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163




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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 Gold
Limited, 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
Gold Limiteds annual report on Form 20-F for the fiscal
year ended December 31, 2005).Exhibit 4 (b) *
    
    Refinancing Coordination Deed 2005between Lihir Gold
Limited, 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 Gold
Limited, 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 Gold Limiteds annual report on
Form 20-F for the fiscal year ended December 31, 2005).Exhibit 4 (d) *
    
    Lihir Gold Security Trust Deedbetween Lihir Gold
Limited, 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
Gold Limiteds annual report on Form 20-F for the fiscal
year ended December 31, 2000).Exhibit 4 (e) *
    
    Lihir Gold Limited Offshore Chargebetween Lihir Gold
Limited and ABN AMRO Australia Limited dated September
13, 2005 (incorporated by reference to Lihir Gold
Limited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 Gold
Limited and ABN AMRO Australia Limited dated September
13, 2005 (incorporated by reference to Lihir Gold
Limited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 Gold
Limited and ABN AMRO Australia Limited dated September
13, 2005 (incorporated by reference to Lihir Gold
Limiteds annual report on Form 20-F for the fiscal year
ended December 31, 2005).Exhibit 4 (h) *
    
    Special Mining Lease, dated as of March 17, 1995, between
Lihir Gold Limited and the PNG Government (incorporated
by reference to Lihirs Form F-1 filed September 6,
1995).
 164




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Exhibit 4 (i) *
    
    Mining Development Contract, dated as of March 17, 1995,
between Lihir Gold Limited and the PNG Government
(incorporated by reference to Lihirs Form F-1 filed
September 6, 1995).Exhibit 4 (j) *
    
    Share Sale and Purchase Agreementbetween Rio Tinto
Western Holdings Limited and Lihir Gold Limited dated
October 10, 2005 (incorporated by reference to Lihir Gold
Limiteds annual report on Form 20-F for the fiscal year
ended December 31, 2005).Exhibit 4 (k) *
    
    Technical and Procurement Services Agreementbetween
Technological Resources Pty Ltd, Rio Tinto Services
Limited and Lihir Gold Limited dated October 10, 2005
(incorporated by reference to Lihir Gold Limiteds annual
report on Form 20-F for the fiscal year ended
December 31, 2005).Exhibit 4 (l) *
    
    General Termination and Release Deedbetween Lihir Gold
Limited, Lihir Management Company Ltd, Rio Tinto Western
Holdings Ltd and Rio Tinto plc dated October 10, 2005
(incorporated by reference to Lihir Gold Limiteds annual
report on Form 20-F for the fiscal year ended
December 31, 2005).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 Gold Limited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
between Nimamar Rural Local Level Government, Lihir
Mining Area Landowners Association, the State of Papua
New Guinea, New Ireland Provincial Government and Lihir
Gold Limited dated November 9, 2005 (incorporated by
reference to Lihir Gold Limiteds annual report on
Form 20-F for the fiscal year ended December 31, 2005).Exhibit 4 (p) *
    
    Amended and Restated Lihirian Equity Settlement Agreement
dated January 27, 2006 between Mineral Resources
Development Company Limited, MRL Capital Limited
(Formerly Mineral Resources Lihir Limited) and the
European Investment Bank (incorporated by reference to
Lihir Gold Limiteds annual report on Form 20-F for the
fiscal year ended December 31, 2005).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 Gold Limited, together
with amendment thereto dated August 18, 1995
(incorporated by reference to Lihir Gold Limited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 Gold Limited, dated April 26, 2004
between Lihir and Maccullochella Pty Ltd. (incorporated
by reference to Lihir Gold Limiteds annual report on
Form 20-F for the fiscal year ended December 31, 2003).Exhibit 4 (t) *
    
    Facility Agreementbetween Lihir Australian Holdings Pty
Limited and Australia and New Zealand Banking Group
Limited dated October 17, 2006.
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Exhibit 4 (u) *
    
    Deed of Chargebetween Lihir Australian Holdings Pty
Limited and Australia and New Zealand Banking Group
Limited dated October 19, 2006.Exhibit 4 (v) *
    
    Parent Deposit Agreementbetween Lihir Gold Limited and
Australia and New Zealand Banking Group Limited dated
February 12, 2007.Exhibit 4 (w) *
    
    Management Services Agreement (PNG)between Lihir
Services Australia Pty Limited and Lihir Gold Limited
dated May 9, 2006.Exhibit 4 (x) *
    
    Management Services Agreement (Australia) between Lihir
Services Australia Pty Limited and Lihir Gold Limited
dated May 9, 2006.Exhibit 4 (y) *
    
    Merger Implementation Agreementbetween Lihir Gold
Limited, Lihir Australian Holdings Pty Limited and
Ballarat Goldfields NL dated October 17, 2006.Exhibit 4 (z) *
    
    Share Subscription Agreementbetween Lihir Australian
Holdings Pty Limited and Ballarat Goldfields NL dated
October 17, 2006.Exhibit 4 (aa) *
    
    Deed Pollbetween Lihir Gold Limited the holders of fully
paid ordinary shares in Ballarat Goldfields NL dated
December 12, 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 Nimamer Rural Local-Level
Government dated May, 2 2007Exhibit 4 (ae) *
    
    Gekko Contractbetween Ballarat Goldfields NL and Gecko
Systems Pty ltd made on March 26, 2007.Exhibit 4 (af) *
    
    Spinefex Contractbetween Ballarat Goldfuields NL and
Spinefex 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 made on March 20, 2008.Exhibit 4 (aj) *
    
    Lihir Executive Share Plan (LESP)for Lihir Gold Limited
approved by shareholders on April 24, 2007.Exhibit 4 (ak)
    
    Spinefex Projects Pty Ltd & Gekko Systems Pty Ltd
amendment letter dated June 2008 to the Spinefex Contract
between Ballarat Goldfuields NL and Spinefex Projects Pty
Ltd made on or about May 12, 2005.Exhibit 4 (al)
    
    AGR Matthey Gold Refining Contractbetween Lihir Gold
Limited and AGR Matthey (a partnership between the
Western Australian Mint, Australian Gold Alliance Pty Ltd
and Johnson Matthey (Aust.) Ltd) made on March 1 2008.
 166




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Exhibit (am)
    
    Metalor Gold Refining Contractbetween Equigold Mines CI
SA and Metalor Technologies SA made on August 28, 2008.Exhibit (an)
    
    Oxygen Plant Contractbetween Lihir Gold Limited and Air
Products PLC made on May 2, 2008.Exhibit (ao)
    
    Autoclave Contractbetween Lihir Gold Limited and WE
Smith Engineering Pty Ltd made on October 10, 2008.Exhibit (ap)
    
    Grinding Mills Agreementbetween Lihir Gold Limited and
FLSmidth Minerals Pty Limited made on May 8, 2008.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. 167