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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

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<P align="center"><FONT size="2"><B>SECURITIES AND EXCHANGE COMMISSION<BR>
WASHINGTON, DC 20549</B>
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<P align="center"><FONT size="2"><B>FORM 20-F</B>
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REGISTRATION STATEMENT PURSUANT TO SECTION 12(b)</FONT></TD>
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OR (g)&nbsp;OF THE SECURITIES EXCHANGE ACT OF 1934</FONT></TD>
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OR</FONT></TD>
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)</FONT></TD>
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OF THE SECURITIES EXCHANGE ACT OF 1934</FONT></TD>
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For the fiscal year ended: December&nbsp;31, 2002</FONT></TD>
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OR</FONT></TD>
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TRANSITION REPORT PURSUANT TO SECTION 13</FONT></TD>
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OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</FONT></TD>
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For the transition period from _______ to _______</FONT></TD>
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<P align="center"><FONT size="2">Commission file number: 2-6860<BR>
<B>Lihir Gold Limited</B>
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<P align="center"><FONT size="2">Papua New Guinea
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<P align="center"><FONT size="2">7th Floor, Pacific Place,<BR>
Cnr Champion Parade, Musgrave Street<BR>
Port Moresby, Papua New Guinea<BR>
_________<BR>
Securities registered pursuant to Section&nbsp;12(b) of the Act:<BR>
None<BR>
_________<BR>
Securities registered or to be registered pursuant to Section&nbsp;12(g) of the Act:
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Nasdaq National Market*</FONT></TD>
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Nasdaq National Market</FONT></TD>
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    <TD valign="top"><FONT size="2">Lihir Gold Limited Ordinary Shares and which are</FONT></TD>
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    <TD valign="top"><FONT size="2">evidenced by American Depositary Receipts</FONT></TD>
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<P align="center"><FONT size="2">_________<br>
* Not for trading but only in connection with the registration of the American Depositary Shares representing such shares, pursuant to the requirements of the Securities and Exchange Commission.
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<FONT size="2">_________<br>
Securities for which there is a reporting obligation pursuant to Section&nbsp;15(d) of the Act:<BR>
None
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<br><FONT size="2">_________<br>
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<P align="left"><FONT size="2">Indicate the number of outstanding shares of each of the issuer&#146;s classes of
capital or common stock as of the close of the period covered by the annual
report (at December&nbsp;31, 2002).
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    <TD valign="top"><FONT size="2">Lihir Gold Limited Ordinary Shares of no par value:</FONT></TD>
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1,142,334,215 fully paid shares</FONT></TD>
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&nbsp;&nbsp;&nbsp;161,527,405</FONT></TD>
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<P align="center"><FONT size="2">_______________</FONT>


<P align="left"><FONT size="2">Indicate by check mark whether the registrant (1)&nbsp;has filed all reports
required to be filed by Section&nbsp;13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12&nbsp;months (or for such shorter period that the
registrant was required to file such reports) and (2)&nbsp;has been subject to such
filing requirements for the past 90&nbsp;days.
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No___</FONT></TD>
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<P align="left"><FONT size="2">Indicate by check mark which financial statement item the registrant has elected to follow.
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Item&nbsp;18 <u>&nbsp;&nbsp;X&nbsp;&nbsp;</u></FONT></TD>
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<A name="toc"><DIV align="CENTER" style="page-break-before:always"><U><B>TABLE OF CONTENTS</B></U></DIV></A>

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<TR><TD colspan="9"><A HREF="#000">Forward Looking Statements</A></TD></TR>
<TR><TD colspan="9"><A HREF="#001"> PART 1</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#002"> Item&nbsp;1. Identity Of Directors, Senior Management, And Advisors</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#003"> Item&nbsp;2. Offer Statistics and Expected Timetable</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#004"> Item&nbsp;3. Key Information</A></TD></TR>
<TR><TD></TD><TD></TD><TD colspan="7"><A HREF="#005">A. Selected Financial Data</A></TD></TR>
<TR><TD></TD><TD></TD><TD colspan="7"><A HREF="#006">B. Capitalization and Indebtedness</A></TD></TR>
<TR><TD></TD><TD></TD><TD colspan="7"><A HREF="#007">C. Reasons for the Offer and Use of Proceeds</A></TD></TR>
<TR><TD></TD><TD></TD><TD colspan="7"><A HREF="#008">D. Risk Factors</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#009">Item&nbsp;4. Information on the Company</A></TD></TR>
<TR><TD></TD><TD></TD><TD colspan="7"><A HREF="#010">A. History and Development of the Company</A></TD></TR>
<TR><TD></TD><TD></TD><TD colspan="7"><A HREF="#011">B. Business Overview</A></TD></TR>
<TR><TD></TD><TD></TD><TD colspan="7"><A HREF="#012">C. Organization and Structure</A></TD></TR>
<TR><TD></TD><TD></TD><TD colspan="7"><A HREF="#013">D. Property, Plant and Equipment</A></TD></TR>
<TR><TD colspan="9"><A HREF="#014">Item&nbsp;5. Operating and Financial Review and Prospects</A></TD></TR>
<TR><TD></TD><TD></TD><TD colspan="7"><A HREF="#015">A.&nbsp;Operating Results</A></TD></TR>
<TR><TD></TD><TD></TD><TD colspan="7"><A HREF="#016">B. Liquidity and Capital Resources</A></TD></TR>
<TR><TD></TD><TD></TD><TD colspan="7"><A HREF="#017">C. Research and Development, Patents and Licenses, etc</A></TD></TR>
<TR><TD></TD><TD></TD><TD colspan="7"><A HREF="#018">D. Trend Information</A></TD></TR>
<TR><TD></TD><TD></TD><TD colspan="7"><A HREF="#019">E Events Subsequent to Signing of the Financial Statements</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#020">Item&nbsp;6. Directors, Senior Management and Employees</A></TD></TR>
<TR><TD></TD><TD></TD><TD colspan="7"><A HREF="#021">A. Directors and Senior Management</A></TD></TR>
<TR><TD></TD><TD></TD><TD colspan="7"><A HREF="#022">B. Compensation</A></TD></TR>
<TR><TD></TD><TD></TD><TD colspan="7"><A HREF="#023">C. Board Practices</A></TD></TR>
<TR><TD></TD><TD></TD><TD colspan="7"><A HREF="#024">D. Employees</A></TD></TR>
<TR><TD></TD><TD></TD><TD colspan="7"><A HREF="#025">E. Share Ownership</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#026">Item&nbsp;7. Major Shareholders and Related Party Transactions</A></TD></TR>
<TR><TD></TD><TD></TD><TD colspan="7"><A HREF="#027">A. Major Shareholders</A></TD></TR>
<TR><TD></TD><TD></TD><TD colspan="7"><A HREF="#028">B. Related Party Transactions</A></TD></TR>
<TR><TD></TD><TD></TD><TD colspan="7"><A HREF="#029">C. Interests of Experts and Counsel</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#030">Item&nbsp;8. Financial Information</A></TD></TR>
<TR><TD></TD><TD></TD><TD colspan="7"><A HREF="#031">A. Consolidated statements and other financial information</A></TD></TR>
<TR><TD></TD><TD></TD><TD colspan="7"><A HREF="#032">B. Significant Changes</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#033">Item&nbsp;9. The Offer and Listing</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#034">Item&nbsp;10. Additional Information</A></TD></TR>
<TR><TD></TD><TD></TD><TD colspan="7"><A HREF="#035">A. Share Capital</A></TD></TR>
<TR><TD></TD><TD></TD><TD colspan="7"><A HREF="#036">B. Memorandum and Articles of Association</A></TD></TR>
<TR><TD></TD><TD></TD><TD colspan="7"><A HREF="#037">C. Material Contracts</A></TD></TR>
<TR><TD></TD><TD></TD><TD colspan="7"><A HREF="#038">D. Exchange Controls</A></TD></TR>
<TR><TD></TD><TD></TD><TD colspan="7"><A HREF="#039">E. Taxation</A></TD></TR>
<TR><TD></TD><TD></TD><TD colspan="7"><A HREF="#040">F. Dividends and Paying Agents</A></TD></TR>
<TR><TD></TD><TD></TD><TD colspan="7"><A HREF="#041">G. Statement by Experts</A></TD></TR>
<TR><TD></TD><TD></TD><TD colspan="7"><A HREF="#042">H. Documents on Display</A></TD></TR>
<TR><TD></TD><TD></TD><TD colspan="7"><A HREF="#043">I. Subsidiary Information</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#044">Item&nbsp;11. Quantitative and Qualitative Disclosure About Market Risk</A></TD></TR>
<TR><TD></TD><TD></TD><TD colspan="7"><A HREF="#045">A. Quantitative Information about Market Risk</A></TD></TR>
<TR><TD></TD><TD></TD><TD colspan="7"><A HREF="#046">B. Qualitative Information about Market Risk</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#047"> Item&nbsp;12. Description of Securities Other than Equity Securities</A></TD></TR>
<TR><TD colspan="9"><A HREF="#048"> PART II</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#049"> Item&nbsp;13. Defaults, Dividend Arrearages and Delinquencies</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#050">Item&nbsp;14. Material Modifications to the Rights of Security Holders and Use of Proceeds</A></TD></TR>
<TR><TD colspan="9"><A HREF="#051">PART IV</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#052"> Item&nbsp;17. Financial Statements</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#053"> Item&nbsp;18. Financial Statements</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#054">Item&nbsp;19 &#151; Exhibits</A></TD></TR>
<TR><TD colspan="9"><A HREF="#055">Certification</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#056">NOTE 10: RECEIVABLES</A></TD></TR>
<TR><TD colspan="9"><A HREF="y87848exv8.txt">SIGNIFICANT SUBSIDIARIES</A></TD></TR>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>




<P align="center"><FONT size="2">Table of Contents
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    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B><I>Forward Looking Statements</I></B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
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    <TD align="right"><FONT size="2"><B><I>5</I></B></FONT></TD>
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    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B><I>PART 1</I></B></FONT></DIV></TD>
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    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B><I>6</I></B></FONT></TD>
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    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Item&nbsp;1. Identity Of Directors, Senior Management, And Advisors</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>6</B></FONT></TD>
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    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Item&nbsp;2. Offer Statistics and Expected Timetable</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>6</B></FONT></TD>
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    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Item&nbsp;3. Key Information</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>6</B></FONT></TD>
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    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">A. Selected Financial Data</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6</FONT></TD>
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    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">B. Capitalization and Indebtedness</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">9</FONT></TD>
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    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">C. Reasons for the Offer and Use of Proceeds</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
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    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">D. Risk Factors</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">9</FONT></TD>
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    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Item&nbsp;4. Information on the Company</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>19</B></FONT></TD>
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    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">A. History and Development of the Company</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">19</FONT></TD>
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    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">B. Business Overview</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">22</FONT></TD>
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    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">C. Organization and Structure</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">34</FONT></TD>
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    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">D. Property, Plant and Equipment</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">34</FONT></TD>
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    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Item&nbsp;5. Operating and Financial Review and Prospects</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>47</B></FONT></TD>
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    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">A. Operating Results</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">47</FONT></TD>
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    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">B. Liquidity and Capital Resources</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">62</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">C. Research and Development, Patents and Licenses, etc</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">65</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">D. Trend Information</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">65</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">E Events Subsequent to Signing of the Financial Statements</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">66</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Item&nbsp;6. Directors, Senior Management and Employees</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>67</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">A. Directors and Senior Management</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">67</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">B. Compensation</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">69</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">C. Board Practices</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">71</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">D. Employees</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">75</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">E. Share Ownership</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">77</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Item&nbsp;7. Major Shareholders and Related Party Transactions</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>79</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">A. Major Shareholders</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">79</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">B. Related Party Transactions</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">82</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">C. Interests of Experts and Counsel</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">83</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Item&nbsp;8. Financial Information</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>84</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">A. Consolidated statements and other financial information</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">84</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">B. Significant Changes</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">85</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Item&nbsp;9. The Offer and Listing</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>85</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Item&nbsp;10. Additional Information</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>87</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">A. Share Capital</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">87</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">B. Memorandum and Articles of Association</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">87</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

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    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">C. Material Contracts</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">91</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">3</FONT>
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<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%">
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
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    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
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    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">D. Exchange Controls</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">101</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

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    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">E. Taxation</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">102</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

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    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">F. Dividends and Paying Agents</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">107</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

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    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">G. Statement by Experts</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">107</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">H. Documents on Display</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">107</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

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    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">I. Subsidiary Information</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">107</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Item&nbsp;11. Quantitative and Qualitative Disclosure About Market Risk</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>108</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

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    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">A. Quantitative Information about Market Risk</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">108</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">B. Qualitative Information about Market Risk</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">110</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Item&nbsp;12. Description of Securities Other than Equity Securities</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>111</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B><I>PART II</I></B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>111</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Item&nbsp;13. Defaults, Dividend Arrearages and Delinquencies</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>111</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Item&nbsp;14. Material Modifications to the Rights of Security Holders and Use of Proceeds</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>111</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="3"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B><I>PART IV</I></B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>111</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Item&nbsp;17. Financial Statements</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>111</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Item&nbsp;18. Financial Statements</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>111</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Item&nbsp;19 &#150; Exhibits</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>112</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">4</FONT>
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<!-- link1 "Forward Looking Statements" -->
<DIV align="left"><A NAME="000"></A></DIV>
<P align="left"><FONT size="2"><B>Forward Looking Statements</B>
</FONT>
<P align="left"><FONT size="2">This annual report contains certain forward-looking statements, including
statements regarding (i)&nbsp;estimated reserves, (ii)&nbsp;certain plans, strategies and
objectives of management, (iii)&nbsp;anticipated production or construction
commencement dates, (iv)&nbsp;expected costs or production output, and (v)&nbsp;the
anticipated productive lives of projects and mines. Such forward-looking
statements are not guarantees of future performance and involve known and
unknown risks, uncertainties and other factors, many of which are beyond the
control of Lihir, which may cause actual results to differ materially from
those expressed in the statements contained in this Annual Report.
</FONT>
<P align="left"><FONT size="2">For example, future revenues from operations or mines described in this annual
report will be based in part upon the market price of gold produced, which may
vary significantly from current levels. Other factors that may affect the
actual production output and anticipated lives of operations, mines or
facilities include the ability to profitably produce and transport the gold
extracted to the market, the impact of foreign currency exchange rates on cost
inputs and activities of governmental authorities in Papua New Guinea and
elsewhere, including increases in taxes, changes in environmental and other
regulations and political uncertainty. Lihir can give no assurances that the
estimated reserves figures, costs, production output or anticipated lives of
its operations and facilities will not materially differ from the statements
contained in this annual report.
</FONT>
<P align="center"><FONT size="2">5</FONT>
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<!-- link1 " PART 1" -->
<DIV align="left"><A NAME="001"></A></DIV>
<P align="center"><FONT size="2"><B>PART 1</B>
</FONT>

<!-- link2 " Item&nbsp;1. Identity Of Directors, Senior Management, And Advisors" -->
<DIV align="left"><A NAME="002"></A></DIV>
<P align="left"><FONT size="2"><B>Item&nbsp;1. Identity Of Directors, Senior Management, And Advisors</B>
</FONT>
<P align="left"><FONT size="2">Not applicable.
</FONT>
<!-- link2 " Item&nbsp;2. Offer Statistics and Expected Timetable" -->
<DIV align="left"><A NAME="003"></A></DIV>
<P align="left"><FONT size="2"><B>Item&nbsp;2. Offer Statistics and Expected Timetable</B>
</FONT>
<P align="left"><FONT size="2">Not applicable
</FONT>
<!-- link2 " Item&nbsp;3. Key Information" -->
<DIV align="left"><A NAME="004"></A></DIV>
<P align="left"><FONT size="2"><B>Item&nbsp;3. Key Information</B>
</FONT>
<!-- link3 "A. Selected Financial Data" -->
<DIV align="left"><A NAME="005"></A></DIV>
<P align="left"><FONT size="2"><B><I>A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Selected Financial Data</I></B>
</FONT>
<P align="left"><FONT size="2">The following selected financial data should be read in conjunction with the
financial statements and the notes thereto, which have been audited by
PricewaterhouseCoopers of Papua New Guinea, independent public accountants,
whose report is included at Item&nbsp;18 of this annual report, and Item&nbsp;5 entitled
&#147;Operating and Financial Review and Prospects&#148;. The income statement data and
the expenditure and financing data set forth below with respect to the years
ended December&nbsp;31, 2000, 2001 and 2002 and the balance sheet data at December
31, 2000, 2001 and 2002 are derived from, and are qualified by reference to,
the audited financial statements of Lihir prepared in accordance with
International Financial Reporting Standards (&#147;IFRS&#148; or &#147;IAS&#148;) and included
elsewhere in this annual report and should be read in conjunction with those
financial statements and the notes thereto.
</FONT>
<P align="left"><FONT size="2">The income statement data and the expenditure and financing data set forth
below with respect to the years ended December&nbsp;31, 1998 and 1999 and the
balance sheet data at December&nbsp;31, 1998 and 1999 are derived from, and are
qualified by reference to, the audited financial statements of Lihir not
included in this annual report and should be read in conjunction with those
financial statements and notes thereto.
</FONT>
<P align="center"><FONT size="2">6</FONT>
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    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="19"><FONT size="1"><B>Year ended December 31,</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="center" colspan="19"><FONT size="1"><B>(In US$ millions, except where indicated)</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>1999</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>1998</B></FONT></TD>
</TR>
<tr><td>&nbsp;</td></tr>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Amounts calculated in accordance with
IFRS:</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B><I>Income Statement Data:</I></B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Sales revenue <sup><I>(1)</I></sup></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">213.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">233.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">226.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">206.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">181.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Profit/(loss) from ordinary activities
after taxation <I><sup>(2)</sup></I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">53.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">59.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(99.4</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(255.3</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(8.8</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Earnings per share, basic and diluted <I><sup>(3)</sup></I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.047</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.052</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(0.087</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(0.262</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(0.009</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Number of ordinary shares (millions) <I><sup>(4)</sup></I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,142.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,142.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,137.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">974.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">924.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B><I>Balance Sheet Data </I></B><I><sup>(5)</sup></I><B><I>:</I></B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total assets</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">576.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">585.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">547.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">643.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">909.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cash and current receivables held</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">38.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">53.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">69.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">56.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">86.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Current liabilities</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">27.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">33.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">64.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">77.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">73.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Long term obligations</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">122.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">55.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">99.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">138.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">283.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total shareholders&#146; equity <I><sup>(6)</sup></I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">426.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">496.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">383.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">428.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">552.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Paid up capital <I><sup>(7)</sup></I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">873.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">873.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">873.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">819.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">688.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cash dividends per ordinary share <I><sup>(3)</sup></I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B><I>Expenditure and Financing Data:</I></B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cash flow from operating activities</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">22.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">62.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">39.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">8.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">23.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total expenditure on investing activities</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">24.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">36.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">33.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">32.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Financing activities:</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Issuance of ordinary shares</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">130.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">67.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Restructure hedgebook</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">42.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">20.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Drawdown of loans</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Repayment of loans</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(3.8</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(28.4</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(85.8</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(162.0</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(11.3</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total financing activities</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(3.8</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(28.4</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(43.2</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(10.5</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">60.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Amounts calculated in accordance with US
GAAP:</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Sales revenue <sup><I>(1)</i></sup></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">213.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">233.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">226.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">206.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">181.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net income/(loss)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">31.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">42.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(327.7</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(15.8</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(8.2</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Earnings per Share, basic and diluted <I><sup>(3)</sup></I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.027</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.038</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(0.288</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(0.016</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(0.009</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Number of ordinary shares (millions) <I><sup>(4)</sup></I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,142.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,142.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,137.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">974.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">924.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total assets <I><sup>(5)</sup></I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">529.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">577.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">540.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">866.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">892.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total shareholders&#146; equity <I><sup>(5)</sup></I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">388.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">496.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">383.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">656.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">541.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Long term obligations<I><sup>(5)</sup></I></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">113.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">47.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">92.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">131.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">277.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">7</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">(1)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">Alternative terminology: &#147;net
sales&#148; or &#147;operating revenues&#148;<BR>
For consistent disclosure with 2002, sales have been restated for 1998
&#150; 2000 to include amortization of hedging costs, which had previously
been classified as an operating cost prior to 2001.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">(2)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">Alternative terminology: &#147;income/(loss) from operations&#148;,
&#147;income/(loss) from continuing operations&#148; or &#147;net income/(loss)&#148; since
Lihir has no discontinued operations and no income from non-operational
sources.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">(3)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">In US$ per share. Lihir has not paid any dividends to date.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">(4)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">As adjusted to reflect changes in capital</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">(5)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">At period end</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">(6)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">Alternative terminology: &#147;net assets"</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">(7)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">Alternative terminology: &#147;capital stock"</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2"><B>Impairment of Mine Assets</B>
</FONT>
<P align="left"><FONT size="2">Under IAS 36 &#147;Impairments of Assets&#148;, impairments of assets are recognized
whenever the carrying amount of an asset exceeds its recoverable amount. The
recoverable amount is measured as the higher of net selling price and value in
use. Value in use is calculated by discounting future cash flows of the
company&#146;s cash generating unit using a risk adjusted pre-tax discount rate.
The cash-generating unit comprises mine properties and deferred mining costs.
</FONT>
<P align="left"><FONT size="2">In the previous 5&nbsp;years the following assumptions have been used in
determining &#145;value in use&#146; of the company&#146;s cash generating unit, giving rise
to the following impairment (charges) / reversals.
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="43%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>1999</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>1998</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Long term gold price &#151; US$ / oz</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">305</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">280</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">300</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">325</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">350</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Discount Rate</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">7</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">7</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">7</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Impairment (charge) / reversal</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">- IAS GAAP US$&nbsp;millions</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">37.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(120.6</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(236.8</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">- US GAAP US$&nbsp;millions</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(339.2</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">The decline in the spot gold price since 1997 is reported to be for reasons
that include declining inflation in many countries and sales by the central
banks of several countries of portions of gold held by them as reserves. The
recent rally in the gold price, to a high of US$382 / oz, has been sustained by
various factors, including growing global uncertainty, conflict in the Middle
East and a weaker US dollar.
</FONT>
<P align="left"><FONT size="2">There can be no assurance that the assumed per ounce gold price will be
realized in future spot sales or that other factors underlying the estimate of
recoverable amount will not change. Changes in the time value of money and in
the assessment of risks specific to the Lihir project may require changes to
the discount rate assumption. Adverse changes in these assumptions could
materially reduce Lihir&#146;s estimate of its recoverable amount, thereby
negatively impacting its reported financial position and results of operations,
and its future cash flows.
</FONT>
<P align="center"><FONT size="2">8</FONT>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<!-- link3 "B. Capitalization and Indebtedness" -->
<DIV align="left"><A NAME="006"></A></DIV>
<P align="left"><FONT size="2"><B><I>B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Capitalization and Indebtedness</I></B>
</FONT>
<P align="left"><FONT size="2">Not applicable.
</FONT>
<!-- link3 "C. Reasons for the Offer and Use of Proceeds" -->
<DIV align="left"><A NAME="007"></A></DIV>
<P align="left"><FONT size="2"><B><I>C.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reasons for the Offer and Use of Proceeds</I></B>
</FONT>
<P align="left"><FONT size="2">Not applicable.
</FONT>
<!-- link3 "D. Risk Factors" -->
<DIV align="left"><A NAME="008"></A></DIV>
<P align="left"><FONT size="2"><B><I>D.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Risk Factors</I></B>
</FONT>
<P align="left"><FONT size="2">An investment in Lihir&#146;s American Depository Shares (ADSs) and ordinary shares
involves a high degree of risk. The following factors, some of which are not
typically associated with investing in equity securities of companies from the
United States, should be carefully considered by prospective investors in
evaluating an investment in the ADSs and ordinary shares.
</FONT>
<P align="left"><FONT size="2"><B><I>Lihir is dependent on a single operation</I></B>
</FONT>
<P align="left"><FONT size="2">Lihir has only been in full production from sulfide ore since October 1997 and
accordingly only has a limited operating history. As a result, Lihir is
subject to all of the risks inherent in newer mining operations and business
enterprises. Other than exclusive exploration rights over the rest of Lihir
Island, the company has no assets or operations other than those relating to
the Lihir operation. While the company intends to continue to undertake
exploration elsewhere on Lihir Island, for at least the next few years it is
expected that this exploration activity will be limited and that the company&#146;s
principal activity will be owning, further developing and operating the Lihir
operation. Accordingly, Lihir&#146;s commercial viability is completely dependent
upon the successful operation of the Lihir operation. No assurances can be
given that the company will be able to sustain successful mining operations or
that the Lihir operation will remain commercially viable.
</FONT>
<P align="left"><FONT size="2"><B><I>Lihir&#146;s operations may be adversely affected by difficult geological conditions</I></B>
</FONT>
<P align="left"><FONT size="2">The success of the Lihir operation depends, in part, upon the success of
Lihir&#146;s engineering solutions to difficult hydrological and geothermal
conditions. To Lihir&#146;s knowledge, these conditions have never been experienced
before in this combination in a mine of the size of the Lihir operation.
Significant removal of both groundwater and sea water inflow and geothermal
control is required during mining. While Lihir has achieved considerable
success to date in addressing these conditions, no assurance can be given that
future efforts will be adequate or meet expectations. A failure to resolve any
unexpected problems relating to these conditions at a commercially reasonable
cost could adversely affect the economics and/or feasibility of the Lihir
operation. See &#147;Information on the Company &#150; Business Overview &#150; Description
of Operations &#150; Mining &#150; Dewatering and Geothermal Control&#148;.
</FONT>
<P align="left"><FONT size="2">In addition, Lihir Island is a volcanic seamount and the Lihir operation is
located within the caldera of a volcano believed to be inactive. Although it
is located 90 kilometers away from a seismically active area of PNG, based on
seismic investigations conducted for the joint venture and publicly available
information, the company believes that Lihir Island is situated in an area of
moderate seismic activity. Reviews of Seismic Hazard commissioned by
</FONT>
<P align="center"><FONT size="2">9</FONT>
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<P align="left"><FONT size="2">LMC in 2000, and the PNG Geological Survey (Anton &#038; Ripper, 1999) have
supported this position. While earthquakes of moderate magnitude (up to M-5.6)
have occurred from time to time within 50 kilometers of the Lihir operation
site, the level of shaking at the site associated with these events, while
noticeable, has not been severe. The Maximum Credible Earthquake predicted
from the foregoing studies is located at average distance of between 20 and 35
km from Lihir, with a magnitude of 7.5 and an estimated Return Period of
between 1200 and 2000&nbsp;years. A seismic hazard study commissioned by the joint
venture was used to determine seismic design criteria for the Lihir operation.
Structures, pit slopes and earth embankments are designed to resist without
yielding the degree of earthquake shaking estimated to have a 50% probability
of being exceeded during the Lihir operation&#146;s design life and to resist
without causing major damage or injury earthquake shaking estimated to have a
10% probability of being exceeded during the Lihir operation&#146;s design life.
These criteria are accepted internationally, and exceed the requirements of the
PNG Earthquake Loading Code for the estimated mine life of 30&nbsp;years.
</FONT>
<P align="left"><FONT size="2">Notwithstanding the foregoing, no assurance can be given that the Lihir
operation will not be adversely affected by volcanic or earthquake activity
during the life of the Lihir operation.
</FONT>
<P align="left"><FONT size="2"><B><I>Lihir&#146;s insurance does not address all operating risks</I></B>
</FONT>
<P align="left"><FONT size="2">The mine, processing plant or related facilities may have to be shut down or
operations may otherwise be disrupted by a variety of risks and hazards that
are beyond the control of the company, including environmental hazards,
industrial accidents, technical failures, labor disputes, unusual or unexpected
rock formations, flooding and extended interruptions due to inclement or
hazardous weather conditions, fires, explosions and other accidents at the
mine, processing plant or related facilities. These risks and hazards could
also result in damage to, or destruction of, mineral properties or production
facilities, personal injury, environmental damage, business interruption,
monetary losses and possible legal liability. While Lihir currently intends to
maintain insurance within ranges of coverage the company believes to be
consistent with industry practice, no assurance can be given that Lihir will
continue to be able to obtain insurance coverage at reasonable rates or that
any coverage it arranges will be adequate and available to cover any such
claims. See &#147;Information on the Company &#150; Property, Plant and Equipment -
Insurance.&#148;
</FONT>
<P align="left"><FONT size="2"><B><I>Lihir is subject to Papua New Guinea political risks</I></B>
</FONT>
<P align="left"><FONT size="2">The Lihir operation is located in Papua New Guinea, or PNG, a country subject
to a relatively high degree of political risk. For example, the Export Finance
and Insurance Corporation based in Sydney as of the date of this annual report
graded PNG for political risk in category 4 out of 6 (1 being best). The Lihir
operation is subject to political, economic and other uncertainties, including
the risk of civil rebellion, expropriation, nationalization, renegotiation or
nullification of existing contracts, mining licenses and permits or other
agreements, changes in laws or taxation policies, currency exchange
restrictions, changing political conditions and international monetary
fluctuations. Future PNG Government actions concerning the economy or the
operation and regulation of nationally important facilities such as mines could
have a significant effect on the company. No assurances can be given that the
Lihir operation will not be adversely affected by future developments in PNG.
As part of the syndicated facility agreement signed on November&nbsp;22, 2000, the
banks have required, and Lihir has obtained for the benefit of the banks,
political risk insurance covering 100% of the borrowings under the facility,
which is a condition precedent to those borrowings and any termination of this
political risk insurance will constitute an event of default under the
facility. No political risk insurance has been, or is currently proposed to
be, arranged for the benefit of the company.
</FONT>
<P align="center"><FONT size="2">10</FONT>
<!-- PAGEBREAK -->
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="left"><FONT size="2">Fiscal and tax policy in Papua New Guinea can be uncertain and subject to
sudden changes. For example, the PNG Government imposed and later replaced a
4% mining levy and 15% interest withholding tax in 1998 and 1999. See &#147;
Operating and Financial Review and Prospects &#150; Operating Results&#148; for a
discussion of these tax issues.
</FONT>
<P align="left"><FONT size="2">In addition to the national PNG Government, PNG has a system of 19 provincial
level governments which are funded almost entirely by direct grants from the
national PNG Government. In the past, there have been disagreements between
the PNG Government and the provincial level governments of PNG, primarily in
relation to power sharing and revenue arrangements.
</FONT>
<P align="left"><FONT size="2">The New Ireland provincial government exchanged its equity participation option
in the project for undertakings by the PNG Government to provide an annual
support grant to the New Ireland province of 3,000,000 Kina per year for
expenditure on infrastructure projects. Persistent failure by the PNG
Government to comply with these undertakings could have an adverse effect on
the relationship between the national and provincial government, and this could
result in the New Ireland provincial government taking steps that may have
negative consequences for the Lihir operation.
</FONT>
<P align="left"><FONT size="2"><B><I>Lihir is vulnerable to civil unrest</I></B>
</FONT>
<P align="left"><FONT size="2">There have been instances of civil unrest within PNG. In 1989, civil unrest on
Bougainville Island (which is one of the New Guinea Islands) developed into an
armed rebellion against the PNG Government by the &#147;Bougainville Revolutionary
Army&#148; and Bougainville Island purported to secede from PNG. This resulted in,
among other things, the closure of the Panguna copper mine, which has not
reopened. Lihir believes there are important historical and cultural
differences between Bougainville and Lihir Island. The company has also
devoted significant time and effort to accommodating the concerns of the
Lihirians, and has entered into an integrated compensation, relocation and
benefits package that covers (in different ways) the affected landowners,
future affected generations and Lihirians generally. See &#147;Information on the
Company &#150; Property Plant and Equipment &#151; Community Affairs&#148;. To date there
have been no significant incidents of an extended nature. While the company
believes these cultural and historical differences and its efforts will
significantly reduce the risk of the type of civil unrest experienced in
Bougainville, no assurances can be given that the Lihirians will not disrupt
operations at the Lihir Operation in the future.
</FONT>
<P align="left"><FONT size="2"><B><I>Lihir could be exposed to pressure on the level of future PNG Government
participation</I></B>
</FONT>
<P align="left"><FONT size="2">Since 1978 the PNG Government has maintained a policy of holding an equity
participation option of up to 30% in mining projects located in PNG. This
equity has been purchased on a historical or sunk cost basis. In 1992, the
previous PNG Government announced a decision to increase the PNG Government&#146;s
equity interest in an existing gold project at Porgera and renegotiated that
interest from 10% to 25%. Although this move was resisted by the other joint
venturers in the Porgera project, a price was ultimately negotiated and
accepted by all parties.
</FONT>
<P align="left"><FONT size="2">Through its wholly owned subsidiary, MRL, the PNG Government acquired a 30%
equity interest in the Lihir operation which was exchanged for a 30% equity
interest in the company immediately prior to the consummation of the global
offering in 1995. One half of this equity interest was committed to the people
of Lihir. As a result of significant restructuring in Lihir&#146;s share register,
the PNG Government, as of May&nbsp;31, 2002, held 6.76% of the project in trust for
the people of Lihir.
</FONT>
<P align="center"><FONT size="2">11</FONT>
<!-- PAGEBREAK -->
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="left"><FONT size="2">Under the State Equity Acquisition Agreement dated March&nbsp;17, 1995 the PNG
Government expressly waived any rights it might otherwise have to acquire an
equity interest in any additional mineral discoveries made by the company on
Lihir Island pursuant to the Exploration Licence (or any extension or renewal
thereof) in recognition of the fact that it has already been given the
opportunity to participate in such discoveries through its indirect equity
interest in the company. However, while Lihir is not aware of any current
intention on the part of the PNG Government to do so, no assurance can be given
that the PNG Government will not seek to acquire additional equity in the Lihir
operation and/or the company in the future. See &#147;Additional Information &#150;
Material Contracts &#151; PNG Government Participation&#148;.
</FONT>
<P align="left"><FONT size="2"><B><I>Lihir is vulnerable to landowner identification and compensation issues</I></B>
</FONT>
<P align="left"><FONT size="2">Approximately 97% of land in PNG is held under customary land tenure, the
nature and terms of which vary considerably throughout the country. In
general, land held under such tenure cannot be alienated and is almost entirely
communally owned. Title to most land in PNG has not been recorded or
registered and there has been little surveying. As a result, title to land (in
Western legal terms) is often unclear. Disputes over land ownership are
common, especially in the context of resource developments. Identifying all
the affected landowners, and structuring compensation arrangements that are
both fair and acceptable to all of them, is often extremely difficult. Lihir
believes that the satisfactory resolution of local landowner concerns is
essential to the development and operation of a mine in PNG. The failure to
adequately address landowner issues has contributed to the disruption of other
mining projects in PNG. While the company has spent considerable time, effort
and expense in an attempt to resolve landowner issues relating to the Lihir
operation, no assurance can be given that disruptions arising out of landowner
dissatisfaction will not occur. See &#147;Information on the Company &#150; Business
Overview &#151; Description of Operations &#150; Workforce and Community Health&#148;.
</FONT>
<P align="left"><FONT size="2"><B><I>Lihir&#146;s results are dependent upon volatile gold prices</I></B>
</FONT>
<P align="left"><FONT size="2">Because substantially all of Lihir&#146;s revenues are derived from the sale of
gold, Lihir&#146;s earnings are closely related to the price of gold. Gold prices
fluctuate widely and are affected by numerous industry factors beyond the
company&#146;s control, such as central bank sales, demand for precious metals,
forward selling by producers and purchases of gold and production cost levels
in major gold producing regions, including South Africa and the various
countries located in the former Soviet Union. Moreover, gold prices are also
affected by macro-economic factors such as expectations regarding inflation,
interest rates, currency exchange rates, and global and regional demand and
political and economic situations. Gold market prices are also affected by
worldwide production levels, which have increased in recent years. While the
current demand for, and supply of, gold affects gold prices, this does not
occur in the same manner as current demand and supply affects the prices of
other commodities. The potential supply of gold consists of new mine
production plus existing stocks of bullion and fabricated gold held by
governments, financial institutions, industrial organizations and individuals.
Since mine production in any single year constitutes a very small portion of
the total supply of gold, normal variations in current production do not
necessarily have a significant effect on the supply of gold or its price. In
addition, the price of gold has on occasion been subject to very rapid
short-term changes because of speculative activities. All these factors are
beyond Lihir&#146;s control and accordingly it is impossible for the management of
Lihir to predict future movements in gold prices.
</FONT>
<P align="left"><FONT size="2">Gold prices declined significantly from the fourth quarter of 1997 and
continued to languish below a level of US$300 / ounce for most of 1998, 1999,
2000 and 2001. In 2002 the gold price rose through $300 per ounce reaching a
high of $US382 per ounce in February 2003. The current spot rate (as of May
2003) of approximately $US 360 per ounce remains below the price levels upon
which the company originally estimated its reserves and
</FONT>
<P align="center"><FONT size="2">12</FONT>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="left"><FONT size="2">designed its pit shell (US$365 and US$375 per ounce, respectively). See
&#147;Information on the Company &#150; Property, Plant and Equipment &#150; Reserves
Estimates&#148;. If gold were to further decline over an extended period, that
could render certain of Lihir&#146;s ore reserves uneconomic and require a
re-evaluation and/or downward adjustment of ore reserves. It could also result
in losses and write-downs of Lihir&#146;s assets. If gold were to fall below
Lihir&#146;s variable production costs for a sustained period, Lihir might have to
curtail or suspend some or all of its operations.
</FONT>
<P align="left"><FONT size="2">The following table sets forth the high, low and average afternoon fixing
prices for gold on the London Bullion Market (the &#147;London P.M. Fix&#148;) for the
periods indicated<I>.</I>
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
    <TD width="67%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="11"><FONT size="1"><B>Price in US$ Per Ounce of Gold</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="11"></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="left"><FONT size="1"><B>Year</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>High</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Low</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Average</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="11"></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">1988</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">484</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">395</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">437</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">1989</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">416</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">356</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">381</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">1990</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">424</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">346</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">384</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">1991</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">403</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">344</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">362</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">1992</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">360</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">330</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">344</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">1993</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">406</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">326</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">360</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">1994</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">396</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">370</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">384</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">1995</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">396</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">372</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">384</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">1996</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">415</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">367</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">397</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">1997</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">366</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">283</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">331</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">1998</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">313</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">273</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">294</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">1999</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">326</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">253</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">279</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2000</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">313</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">264</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">279</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2001</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">293</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">256</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">271</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2002</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">349</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">278</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">310</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">

<TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2003 to May&nbsp;31, 2003</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">382</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">321</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">348</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">The London P.M. Fix on 31 May 2003 was
US$361 per ounce of gold.
</FONT>
<P align="left"><FONT size="2">Lihir may seek to mitigate the effect of gold price volatility, in part,
through hedging strategies, which may include periodic purchases or sales of
&#147;put&#148; or &#147;call&#148; options, spot deferred sales and forward sales covering a
portion of its gold production at fixed future prices. Certain hedging
transactions may eliminate or limit additional revenues that Lihir would
otherwise receive from any future rises in the gold price. In addition,
Lihir&#146;s profitability could be adversely affected if for any reason its
production of gold is unexpectedly interrupted and as a result it is unable to
produce sufficient gold to cover any forward sales commitments it may have
made.
</FONT>
<P align="left"><FONT size="2"><B><I>Lihir&#146;s prospects are dependent on reserves estimates and future experience</I></B>
</FONT>
<P align="left"><FONT size="2">The reserve estimates presented in this annual report are estimates based on a
gold price of US$305 per ounce for a cut off grade of 1.7 g Au/t using end 2002
mine life cost estimates and within a mine pit designed at US$305 per ounce.
</FONT>
<P align="center"><FONT size="2">13</FONT>

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<P align="left"><FONT size="2">No assurance can be given that the indicated amount of gold will be recovered
or at the rates estimated. Gold reserve estimates are expressions of judgment
based on knowledge, experience and industry practice, and may require revision
based on actual production experience. Estimates that are valid estimates when
made may change significantly when new information becomes available. Such
estimates are necessarily imprecise and depend to some extent on statistical
inferences, which may prove unreliable. Should Lihir encounter mineralization
or formations different from those predicted by past drilling, sampling and
similar examinations, reserve estimates may have to be adjusted and mining
plans may have to be altered in a way that might adversely affect Lihir&#146;s
operations. The reserve estimates contained in this annual report have been
determined based on assumed gold prices, cut-off grades and operating costs
that may prove to be inaccurate. Fluctuations in the market price of gold, or
increased production costs or reduced recovery rates, may render ore reserves
containing relatively lower grades of mineralization uneconomic to recover and
may ultimately result in a restatement of reserves.
</FONT>
<P align="left"><FONT size="2"><B><I>Lihir&#146;s financing agreements impose limitations on its operations</I></B>
</FONT>
<P align="left"><FONT size="2">The syndicated facility agreement signed by Lihir on November&nbsp;22, 2000 contains
numerous events of default which would entitle the banks to prevent future
draw-downs, declare all outstanding borrowings under the facility to be
immediately due and payable and foreclose on Lihir&#146;s assets, almost all of
which have been pledged or otherwise encumbered to secure such borrowings.
Finally, the facility contains a number of covenants by the company which are
likely to restrict its future operations, including but not limited to
agreements not to engage in any business activities other than those relating
to the Lihir operation and the proposed exploration program, to incur any
additional indebtedness or encumbrances or to pay any dividends or make certain
other restricted payments unless certain conditions are met, in each case
without the required consent of the banks. See &#147;Operating and Financial Review
and Prospects &#150; Liquidity and Capital Resources&#148; and &#147;Additional Information &#150;
Material Contracts &#150; Financing Agreements&#148;.
</FONT>
<P align="left"><FONT size="2"><B><I>Lihir has limited financial resources</I></B>
</FONT>
<P align="left"><FONT size="2"><I>Lihir has limited financial resources.</I> While Lihir currently believes that it
has or will have access to resources sufficient to finance its operations, the
adequacy of Lihir&#146;s financial resources will depend upon its ability to
generate sufficient revenues from gold production and to keep its costs and
other expenditures within its current estimates. If Lihir is unable to
generate such revenues, keep its costs and expenditures within such estimates,
or if unexpected conditions or developments occur, Lihir could require more
funds than are currently available to it. In that case, Lihir might not be
able to borrow the necessary additional funds or to do so at reasonable rates
because almost all of its assets have already been pledged or otherwise
encumbered to secure the borrowings under the syndicated facility agreement.
</FONT>
<P align="left"><FONT size="2"><B><I>Lihir is vulnerable to environmental risks</I></B>
</FONT>
<P align="left"><FONT size="2">The Lihir operation is subject to PNG laws and regulations regarding
environmental matters and the discharge of hazardous wastes and materials. The
Lihir operation has some environmental impacts, including land and habitat
impacts arising from the use of land for mining and related activities and
certain impacts on streams and the marine environment near the project site
resulting from water use, ocean waste rock disposal, construction and drainage
run-off and submarine disposal of tailings by pipeline in deep water. While
the Lihir operation currently complies with the applicable licence conditions
accepted by the PNG Government in granting project approval, the eventual,
cumulative environmental impacts could be greater than the estimates in, or not
contemplated by, the environmental plan approved by the PNG Government, and in
such event the PNG Government could require the
</FONT>
<P align="center"><FONT size="2">14</FONT>
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<P align="left"><FONT size="2">company to remedy such consequences and the costs of such remediation could be
material. In addition, PNG environmental rules and regulations are still
developing and their impact on mining and processing operations could change.
Future environmental laws and regulations could impose increased capital or
operating costs on the company and could restrict the development or operation
of the Lihir mine. The company has been consulted by the PNG Government in its
development of the new Environment Act for Papua New Guinea. However, no
assurance can be given that any changes will not have an adverse impact on the
Lihir operation. The extent to which unanticipated environmental consequences
or future regulations may affect the company cannot be predicted. See
&#147;Information on the Company &#150; Property, Plant &#038; Equipment &#151; Environmental
Considerations&#148;.
</FONT>
<P align="left"><FONT size="2"><B><I>Lihir&#146;s mining rights may be terminated under PNG law</I></B>
</FONT>
<P align="left"><FONT size="2">The Lihir operation is also subject to the provisions of the PNG Mining Act
1992 which governs the granting of mining rights and the conditions upon which
those rights may be terminated. In particular, the company is party to a
mining development contract, dated March&nbsp;17, 1995, with the PNG Government
which sets forth the terms upon which Lihir may exercise its rights under the
special mining lease which governs the Lihir operation. Under certain limited
circumstances, the PNG Government may terminate the mining development contract
and, therefore, the special mining lease. Any such termination would prohibit
the continued operation of the Lihir mine. See &#147;Additional Information &#150;
Material Contracts &#150; PNG Mining Laws and Related Agreements with PNG
Government&#148;.
</FONT>
<P align="left"><FONT size="2"><B><I>Lihir is vulnerable to a limited market for the Kina and foreign exchange
controls</I></B>
</FONT>
<P align="left"><FONT size="2">The PNG national currency, the Kina, is subject to exchange controls. There is
currently a relatively limited and inefficient market for the Kina and no
assurance can be given that Lihir will be able to convert any Kina funds it has
into other currencies at rates comparable to those at which funds were
initially remitted to PNG or at all. In addition, the PNG Central Banking
(Foreign Exchange and Gold) Regulations require the prior approval of the PNG
central bank to convert funds from Kina into other currencies. While these
regulations also generally require PNG companies to transfer all of their
non-Kina revenues to PNG and convert them into Kina, as is ordinarily the case
with large mining and petroleum projects in PNG, under the mining development
contract the PNG Government has agreed to ensure that the PNG central bank will
grant to the company permission to retain certain of its funds in other
currencies in, and to convert and transfer its Kina funds into, offshore
accounts outside PNG. This permission is limited to certain proceeds from bank
loans, insurance policies and the sale of gold in an amount sufficient to cover
certain specified purposes during the following three month period. As a result
of these limitations, Lihir is still exposed to certain exchange rate
fluctuations and convertibility risks. The Kina has depreciated against the
U.S. dollar in recent years. There can be no assurance that the Kina will not
depreciate further against the U.S. dollar. See &#147;Additional Information &#150;
Exchange Controls&#148;.
</FONT>
<P align="left"><FONT size="2"><B><I>Lihir is subject to dominance by its initial shareholders and their affiliates</I></B>
</FONT>
<P align="left"><FONT size="2">Immediately prior to the consummation of Lihir&#146;s global offering of shares in
1995, the outstanding ordinary shares were owned 40% by Southern Gold (which
was owned 75% by Rio Tinto and 25% by Vengold), 30% by Niugini Mining and 30%
by MRL (which is indirectly wholly owned by the PNG Government). As of March
31, 2003 and excluding the shares in the company held by Niugini Mining Limited
as a wholly owned subsidiary of Lihir, the remaining former participants in the
joint venture (or their assignees) collectively owned 262,927,557 (23.0%) of
the outstanding ordinary shares of the company. See &#147;Major Shareholders and
Related Party Transactions &#150; Major Shareholders&#148;.
</FONT>
<P align="center"><FONT size="2">15</FONT>
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<P align="left"><FONT size="2">Accordingly, if the initial shareholders elected to vote in the same manner on
any matter requiring approval of a majority of the outstanding ordinary shares,
such matters are likely to be approved or defeated, as the case may be, by
virtue of the percentage of votes cast by the initial shareholders.
</FONT>
<P align="left"><FONT size="2"><B><I>Agreements made by Lihir with Rio Tinto and its affiliate were not subject to
arm&#146;s length negotiations</I></B>
</FONT>
<P align="left"><FONT size="2">The company has entered into certain agreements with Rio Tinto and its
affiliates, including the management agreement and the Technical Support
Agreement. For a description of these agreements, see &#147;Additional Information
&#150; Material Contracts &#150; Lihir Management&#148;. While Lihir believes these
agreements contain terms and conditions at least as favorable to it as those
which might reasonably be expected to be negotiated on an arm&#146;s length basis
between unaffiliated third parties, these agreements were not the product of
such a negotiation and no assurance can be given the terms and conditions would
meet such a standard.
</FONT>
<P align="left"><FONT size="2"><B><I>Lihir is dependent on Rio Tinto</I></B>
</FONT>
<P align="left"><FONT size="2">Following the consummation of the global offering in 1995, the initial
shareholders (who were the participants in the joint venture) have had no
continuing obligation to contribute to, or otherwise to fund, the expenses of
the Lihir operation and the company has been responsible for obtaining and
maintaining its own external sources of funding. Lihir, however, continues to
be highly dependent on Rio Tinto as one of the initial shareholders and certain
of its affiliates in several important respects. Pursuant to the management
agreement, the board of directors has delegated management of most aspects of
the corporate affairs, operations and activities of the company to Lihir
Management Company, an affiliate of Rio Tinto, and for this reason Lihir has no
executive officers or senior management personnel other than a managing
director, chief financial officer, company secretary and public officer.
</FONT>
<P align="left"><FONT size="2">Certain technical services are provided to the company by Rio Tinto and its
affiliates under the Technical Services Agreement. As a result of these
arrangements, Lihir is dependent upon employees of Lihir Management Company and
Rio Tinto and its affiliates to provide the executive and senior technical
services customarily performed by direct employees of a company. In addition,
it constitutes a review event under the syndicated facility agreement signed on
November&nbsp;22, 2000 if the Rio Tinto Group disposes of any of the ordinary shares
beneficially held by it or the manager of Lihir ceases to be a wholly-owned
subsidiary of the Rio Tinto Group. See &#147;Additional Information &#150; Material
Contracts -&#150; Financing Agreements&#150; Syndicated Facility Agreement&#148;
</FONT>
<P align="left"><FONT size="2">Rio Tinto is under no obligation to Lihir to ensure that these conditions
continue to be satisfied, and Lihir has no right to require such compliance by
Rio Tinto.
</FONT>
<P align="left"><FONT size="2"><B><I>Lihir is exposed to potential conflicts of interest</I></B>
</FONT>
<P align="left"><FONT size="2">Under current PNG law directors have fiduciary duties to all shareholders.
However the representatives of the initial shareholders on the company&#146;s board
of directors may have actual or potential conflicts of interest between their
responsibilities to Lihir as a director and their employment obligations to the
initial shareholder that appointed them. Although the directors have advised
the company that they understand their fiduciary duties and the company is not
aware of any intention on their part to contravene such duties, it is
nevertheless possible that such directors could resolve such actual or
potential conflicts in the interests of the initial shareholder that nominated
them instead of in the interests of Lihir and its shareholders as a whole. In
addition, the employees of Rio Tinto and its affiliates who provide executive,
managerial, technical and administrative services to the
</FONT>
<P align="center"><FONT size="2">16</FONT>
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<P align="left"><FONT size="2">company pursuant to the management agreement and technical support agreement
may have similar conflicts of interest in performing such services between
their responsibilities to Lihir and employment obligations to Rio Tinto, and
may resolve such conflicts in the interests of Rio Tinto rather than the
company. In the absence of certain events, the company will not be able to
terminate the management agreement or technical support agreement for 20&nbsp;years
from signing, and under the management agreement the company has waived its
right to bring any action against Lihir Management, Rio Tinto, Rio Tinto&#146;s
subsidiaries or any of their employees or representatives for any losses or
liabilities incurred by the company arising out of the performance or
non-performance by Lihir Management Company of its duties under the management
agreement unless they result from a willful omission or willful misconduct by
Lihir Management Company. Finally, while Lihir does not currently intend to
engage in any exploration or other mining activities outside Lihir Island, it
may elect to do so in the future. Neither Rio Tinto nor any of the initial
shareholders has agreed not to compete with the company in such activities and
this could give rise to circumstances in which the interests of the company, on
the one hand, and Rio Tinto or the initial shareholders, on the other, diverge
or conflict.
</FONT>
<P align="left"><FONT size="2"><B><I>Lihir&#146;s dividends to U.S. shareholders are subject to withholding tax</I></B>
</FONT>
<P align="left"><FONT size="2">There is no tax treaty in effect between the United States and PNG. As a
result, under current PNG law U.S. shareholders will be subject to a 10% (17%
prior to December&nbsp;31, 2000) withholding tax on any dividends or other
distributions made by Lihir on the ordinary shares. See &#147;Additional
Information &#150; Taxation&#148; for a discussion of the effects of this tax.
</FONT>
<P align="left"><FONT size="2"><B><I>Lihir&#146;s shareholders are subject to different rights under certain
circumstances</I></B>
</FONT>
<P align="left"><FONT size="2">Lihir&#146;s corporate affairs are currently governed by its constitution and the
laws of PNG. Principles of law applicable to Lihir and its shareholders may
differ from those that would apply if Lihir were incorporated in a jurisdiction
in the United States. For example, while in most cases shareholder votes are
held by ballot in a manner similar to the practice in the United States, in
certain circumstances shareholder votes can be limited to persons actually
present at a shareholder meeting (either shareholders or representatives of
shareholders) and the quorum for such purposes can be as low as two such
persons. The board of directors also has the ability to refuse to register
transfers of ordinary shares that would breach Australian Stock Exchange (ASX)
rules or contravene laws. In addition, Lihir&#146;s shareholders may have fewer or
less well-defined rights under PNG corporate law with which to protect their
interests against actions by its board of directors or major shareholders
(including Lihir&#146;s initial shareholders) than they might have as shareholders
of a corporation incorporated in a jurisdiction in the United States.
</FONT>
<P align="left"><FONT size="2"><B><I>Difficulty may be experienced in the pursuit of litigation against Lihir&#146;s
non-US resident executive officers, directors, or experts</I></B>
</FONT>
<P align="left"><FONT size="2">None of Lihir&#146;s executive officers or executive directors resides in the United
States. Lihir understands that the general rules in respect of service of
process issued out of US courts requires either:
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">the presence of the person to be served within the jurisdiction of the relevant court; or</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">the consent of that person to receiving service outside the jurisdiction.</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">17</FONT>
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<P align="left"><FONT size="2">Lihir is not aware that any of the individuals concerned have given consent to
service outside the jurisdiction. Therefore, for a claimant in US courts,
there may be a risk that such persons cannot be served with process.
</FONT>
<P align="left"><FONT size="2">Certain judgments of certain foreign courts are recognized and enforceable in
Papua New Guinea by registration under the Reciprocal Enforcement of Judgments
Act (Chapter&nbsp;50 of the PNG Revised Laws). This Act is applied generally on the
basis of reciprocity to prescribed countries and designated courts within those
countries. The United States is a prescribed country under the Act. The
designated courts in the United States are the New York State Court of Appeals
and any Supreme Court of the State of New York. If a foreign money judgment is
not obtained from a designated court, it may nonetheless be recognized and
enforced in Papua New Guinea at common law by commencing a separate action in
the National Court of Papua New Guinea to sue on the judgment.
</FONT>
<P align="left"><FONT size="2">In the company&#146;s prospectus issued in connection with the global offering of
shares in 1995, it was stated that the courts of PNG will not permit original
actions for civil liabilities predicated upon the civil liability provisions of
the US federal securities laws. Lihir has no reason to believe that PNG courts
today would take a different attitude, and allow such actions against the
company or any of its non-US resident executive officers, directors, or experts
the company has named in its registration statement. This should only be a
difficulty for US investors to the extent that an action cannot be brought in
the United States or a judgment of a US court cannot be enforced in PNG.
</FONT>
<P align="center"><FONT size="2">18</FONT>
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<!-- link2 "Item&nbsp;4. Information on the Company" -->
<DIV align="left"><A NAME="009"></A></DIV>
<P align="left"><FONT size="2"><B>Item&nbsp;4. Information on the Company</B>
</FONT>
<P align="left"><FONT size="2">See &#147;Certain Definitions&#148; and &#147;Glossary of Certain Technical Terms&#148; at the end
of this annual report for the definitions of certain terms used in this annual
report.
</FONT>
<!-- link3 "A. History and Development of the Company" -->
<DIV align="left"><A NAME="010"></A></DIV>
<P align="left"><FONT size="2"><B><I>A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;History and Development of the Company</I></B>
</FONT>
<P align="left"><FONT size="2"><B>Introduction</B>
</FONT>
<P align="left"><FONT size="2">Lihir Gold Limited (referred to in this annual report as &#147;Lihir&#148; or the
&#147;company&#148;) is a corporation incorporated in 1995 under the laws of Papua New
Guinea (PNG)&nbsp;that owns and operates a gold mining project located on Lihir
Island in the New Ireland province of PNG. Production of gold from oxide ore
commenced in May 1997. In September 1997 the company completed construction of
the processing and related facilities for the Lihir operation and commenced
production of gold from sulfide ore. The registered office of the company is
located at Seventh Floor, Pacific Place, Cnr. Champion Parade and Musgrave
Street, Port Moresby, PNG. The telephone number of the registered office is
&#043;675 321 7711. The company&#146;s website is www.lihir.com.pg.
</FONT>
<P align="left"><FONT size="2">At the Annual General Meeting of the company held on April&nbsp;28, 1998
shareholders approved registration of the company under the PNG Companies Act
1997 and the company was registered effective May&nbsp;15, 1998, with the PNG
Companies Act 1997 applying to the company from that date. As part of the
registration process, shareholders at the Annual General Meeting of the company
held on April&nbsp;28, 1998 adopted a new constitution in replacement of the
Articles of Association and Memorandum of Association of the company. The new
constitution was modelled on the company&#146;s then Memorandum of Association and
Articles of Association. See &#147;Additional Information &#150; Memorandum and Articles
of Association&#148; for a summary of the terms of Lihir&#146;s constitution.
</FONT>
<P align="left"><FONT size="2">The initial exploration and development work on the Lihir operation was
conducted by a joint venture beginning in 1982. A subsidiary of Rio Tinto plc,
one of the participants in the joint venture, prepared a feasibility report on
the Lihir operation dated March 1992 and amended in September 1993, October
1994 and May 1995, which was reviewed and audited by Micon International
Limited. In October 1995, the company acquired the assets relating to the
Lihir operation from the joint venture and issued and sold ordinary shares in a
global offering. The joint venture, which undertook almost nine years of test
drilling and numerous geological and other studies on the Lihir operation,
spent a total of US$147&nbsp;million on exploration and pre-development activities
in relation to the Lihir operation. As of March&nbsp;31, 2003, excluding the shares
in the company held by Niugini Mining Limited (an original joint venture
participant that is now a wholly owned subsidiary of the company), the former
participants in the joint venture (or their assignees) collectively owned
262,927,557 (23.01%) of the outstanding ordinary shares of the company, as
follows:
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
    <TD width="71%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Shareholding</B></FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Rio Tinto Metals Limited</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">161,527,406</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Rio Tinto Lihir Holdings Ltd</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">24,230,720</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Mineral Resources Lihir Pty Ltd</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">77,169,431</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Orogen Minerals Limited *</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">262,927,557</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">19</FONT>
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<P align="left"><FONT size="2">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During 2003, Oregen Minerals Ltd divested their shareholding in the company
</FONT>
<P align="left"><FONT size="2">No options over the company&#146;s shares remain outstanding. See &#147;Major
Shareholders and Related Party Transactions &#150; Major Shareholders &#150; Share
Options&#148;.
</FONT>
<P align="left"><FONT size="2">The assets acquired from the joint venture included the Special Mining Lease,
which gives the company exclusive mining rights within the leased area of Lihir
Island for 40&nbsp;years. The Lihir operation relates to the mineral deposits
located within the area covered by the Special Mining Lease. The company also
holds the Exploration License, which provides the company with the exclusive
right to explore for gold and other minerals on the remainder of Lihir Island
for a renewable two year period, through to March&nbsp;31, 2004.
</FONT>
<P align="left"><FONT size="2">The company is managed by Lihir Management Company Limited, a wholly owned
subsidiary of Rio Tinto, pursuant to a management agreement. Rio Tinto
acquired a managing interest in the joint venture in 1989, and the joint
venture has been managed by a wholly owned subsidiary of Rio Tinto since that
time. Since the consummation of the global offering in 1995, Rio Tinto has
indirectly owned at least 15% of Lihir&#146;s issued and outstanding ordinary
shares.
</FONT>
<P align="left"><FONT size="2">For a summary of certain risks relevant to an investment in the company,
including but not limited to those relating to gold prices and reserve
estimates, see &#147;Key Information &#151; Risk Factors&#148;.
</FONT>
<P align="left"><FONT size="2"><B>Merger with Niugini Mining Limited</B>
</FONT>
<P align="left"><FONT size="2">On October&nbsp;6, 1999 Lihir announced its agreement with Niugini Mining Limited,
subject to various conditions, to merge by Scheme of Arrangement under PNG law.
The basis of the merger was set out in the notice of special meeting forwarded
to shareholders on November&nbsp;27, 1999. On December&nbsp;15, 1999 Lihir&#146;s
shareholders approved the required resolutions to progress the merger. Niugini
Mining shareholders also approved the required resolutions in early January
2000 and final approval from the National Court of Papua New Guinea was
obtained by Niugini Mining on February&nbsp;1, 2000. The merger was effective on
February&nbsp;2, 2000.
</FONT>
<P align="left"><FONT size="2">In accordance with the agreement of both sets of shareholders, the total number
of shares issued to Niugini Mining shareholders was one Lihir share for each
share in Lihir held by Niugini Mining, plus shares in Lihir equal in value to
Niugini Mining Limited&#146;s net assets (excluding its investment in Lihir).
Niugini Mining&#146;s net assets were US$54.6&nbsp;million, which resulted in 59,128,489
million Lihir shares being issued. With the one for one consideration for
Niugini Mining&#146;s holding of 161,527,405 shares in Lihir, the total number of
shares issued to Niugini Mining shareholders was 220,655,894 shares. As
Niugini Mining had no operations, the shares issued to effect the transaction
were valued based on the fair value of the net assets acquired and transaction
costs of US$1,814 thousand were charged as an expense. The shares in Lihir
held by Niugini Mining were valued at the share price current on February&nbsp;2,
2000, the date of acquisition.
</FONT>
<P align="left"><FONT size="2">As a result of the merger, Niugini Mining became a 100% owned subsidiary of
Lihir. Niugini Mining continues to hold 161,527,405 ordinary shares in Lihir
which have been reclassified as &#147;B&#148; class shares.
</FONT>
<P align="left"><FONT size="2"><B>Capital Expenditures</B>
</FONT>

<P align="center"><FONT size="2">20</FONT>




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<P align="left"><FONT size="2">The feasibility report for the Lihir project originally estimated that a total
of US$673&nbsp;million (in mid-1995 dollars) in capital expenditures would be
required for pre-production development and construction of the Lihir
operation, excluding the US$147&nbsp;million in exploration and pre-development
expenditures made by the joint venture participants prior to the global
offering. This was subsequently re-estimated to be US$780&nbsp;million (in mid-1996
dollars) when the definitive estimate for construction was completed. This
increase represented a number of changes in scope, particularly in the areas of
financing costs, pit and operations development, and working capital, inflation
and the decision to move to the early processing of oxide ore. The actual cost
of construction was US$792&nbsp;million, which reflected some further changes to
scope, such as a re-design of the tailings disposal system and accommodation
and other infrastructure.
</FONT>
<P align="left"><FONT size="2">Capital expenditure over the last four financial years, as discussed in note 12
to the financial statements has been as follows:
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="15"><FONT size="1"><B>US$ millions</B></FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>1999</B></FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Projects</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">9.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">15.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Mine</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">13.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">10.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">50.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">17.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Processing</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">9.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">17.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">26.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">36.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">53.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">33.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">During 1999, capital expenditure included the balance of expenditure on the
second oxygen plant US$11.6&nbsp;million, geothermal wells US$8.4&nbsp;million and the
flotation plant US$2.5&nbsp;million.
</FONT>
<P align="left"><FONT size="2">During 2000, capital expenditure included US$42.3&nbsp;million spent on purchase of
the mining fleet from the Thiess-Roche Lihir Joint Venture and US$4.0&nbsp;million
on further geothermal well expenditure. The balance was attributable to a
number of projects each costing less than US$1&nbsp;million.
</FONT>
<P align="left"><FONT size="2">During 2001, capital expenditure included US$12.7&nbsp;million on the autoclave heat
recovery project, US$5.7&nbsp;million on geothermal wells, US$4.2&nbsp;million on 3 new
haul trucks and a dozer to supplement the mining fleet, US$3.4&nbsp;million on a
twelfth generator, $US 1.1&nbsp;million on preparatory work for the pebble crusher
project and the balance on a number of projects, each costing less than US$1
million.
</FONT>
<P align="left"><FONT size="2">During 2002, capital expenditure included US$6.1&nbsp;million on geothermal wells,
US$4.7&nbsp;million on the pebble crusher project, US$3.4&nbsp;million on the progressive
replacement of the mining fleet and US$3.0&nbsp;million on a pilot 6MW geothermal
power station. These expenditures were funded from operations and are located
on the mine site on Lihir Island in PNG.
</FONT>
<P align="left"><FONT size="2">For 2003 capital expenditure of US$26.2&nbsp;million is projected. This estimate
includes US$6.8&nbsp;million on the progressive replacement of the mining fleet,
further expenditure on geothermal wells estimated at US$2.8&nbsp;million,
geo-technical scoping studies at an estimated cost of $US2.6&nbsp;million and
modifications to the CIL circuit of US$1.5&nbsp;million. These expenditures are
expected to be funded from operations.
</FONT>
<P align="center"><FONT size="2">21</FONT>
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<!-- link3 "B. Business Overview" -->
<DIV align="left"><A NAME="011"></A></DIV>
<P align="left"><FONT size="2"><B><I>B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Business Overview</I></B>
</FONT>
<P align="left"><FONT size="2">Lihir&#146;s operations are limited to a single mine company which produces gold
dor&#233; as its sole product. The gold is mined and processed on Lihir Island in
PNG. After refining by Rothschild Australia Pty Ltd and Metals Refining
Operations Limited, the gold is delivered into hedge contracts with selected
hedge counter-parties (predominantly ABN-AMRO, Commonwealth Bank of Australia,
Deutsche Bank, Macquarie Bank, SG Australia, Goldman Sachs and Mitsui) or sold
spot loco London through the international gold market. The gold market is not
generally regarded as being influenced by seasonal factors.
</FONT>
<P align="left"><FONT size="2"><B>Description of Operations</B>
</FONT>
<P align="left"><FONT size="2"><B><I>Overview</I></B>
</FONT>
<P align="left"><FONT size="2">The following is a summary of Lihir&#146;s current operations. Given the size, scope
and estimated 30&nbsp;year remaining production life of Lihir, changes in operations
may be made in the future, and these changes could be material. See &#147;Key
Information &#151; Risk Factors&#148; for a discussion of possible risks to Lihir&#146;s
operations.
</FONT>
<P align="left"><FONT size="2">The Lihir operation is based on open pit mining of two adjacent overlapping
pits. Most of the ore is refractory sulfide ore that must be oxidized before
the gold can be leached through cyanidation. Pressure oxidation technology
licensed from Dynatech (formerly Sherritt) is used to treat the refractory ore.
</FONT>
<P align="left"><FONT size="2">During the period of open pit mining (the &#147;Mining Period&#148;) which based on the
current preliminary mine plan is expected to continue for the next 18&nbsp;years of
gold production to and including 2020, the higher grade ore will be fed
directly into the processing plant and the lower grade stockpile ore will be
stockpiled for processing during the period after open pit mining ceases. The
stockpile processing period (the &#147;Stockpile Processing Period&#148;) is expected to
last for a further 15&nbsp;years to and including 2035. Accordingly, the Lihir
operation is currently expected to have a total remaining operating production
life of 33&nbsp;years, with open pit mining limited to the next 18&nbsp;years.
</FONT>
<P align="left"><FONT size="2">Because the higher grade gold will be processed first, annual gold production
is expected to drop significantly after the mining period. Based on the new
reserve estimates and current preliminary mine plan estimates, production is
expected to be approximately 600,000 ounces in 2003, greater than 650,000 in
the years 2004-2008, approximately 600,000 ounces per year through to and
including 2013, greater than 500,000 ounces through to 2016 and approximately
350,000 ounces per year through the end of mining and stockpile rehandle period
out to and including 2035.
</FONT>
<P align="left"><FONT size="2">The company is managed by Lihir Management Company pursuant to a management
agreement dated March&nbsp;17, 1995, between Lihir and Lihir Management Company.
Lihir Management Company is responsible for managing substantially all aspects
of the company&#146;s operations, including mine planning, ore grade control,
surveying and managing the mining contractor. See &#147;Additional Information &#150;
Material Contracts &#150; Lihir Management.&#148;
</FONT>
<P align="left"><FONT size="2">All mining operations to April&nbsp;17, 2000 were provided by the Thiess Roche Lihir
Joint Venture pursuant to a mining services contract dated October 1995. This
mining contract was due to continue to mid 2002 subject to Lihir&#146;s rights of
early termination. Following a review of the benefits of operating under the
mining contract compared with Lihir operating the mine itself, Lihir determined
to exercise its rights of early termination. In mid March 2000 Lihir signed a
heads of agreement with the mining contractor pursuant to which Lihir cancelled
the
</FONT>
<P align="center"><FONT size="2">22</FONT>
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<P align="left"><FONT size="2">mining contract effective April&nbsp;17, 2000 and purchased the mining fleet and
equipment from the mining contractor.
</FONT>
<P align="left"><FONT size="2">The supply of explosives and charging of blast holes will continue to be
performed on a contract basis by Orica Papua New Guinea Limited which was
nominated by Lihir Management Company and appointed as a sub-contractor under
the original mining contract, pursuant to a contract explosives services
agreement, dated March&nbsp;14, 1996, between Lihir and the blasting contractor.
Following the termination of the mining contract the blasting contractor is now
contracted directly to Lihir.
</FONT>
<P align="left"><FONT size="2"><B><I>Mining</I></B>
</FONT>
<P align="left"><FONT size="2"><B><I>General. </I></B>The open pit mine is expected to produce an average of approximately
6.3&nbsp;million tonnes of ore per year for the remainder of the mining period. Ore
production was 3.8&nbsp;million tonnes in 1997, 6.9&nbsp;million tonnes in 1998 and 1999,
10.4&nbsp;million tonnes in 2000, 7.9&nbsp;million tones in 2001 and 9.3&nbsp;million tonnes
in 2002. The production rate is expected to average approximately 8.4&nbsp;million
tonnes per year from 2003 to 2008 and decline thereafter to an average of 7.2
million tonnes per year from 2009 to 2016 inclusive and 2.7&nbsp;million tonnes per
year from 2017 to 2020 inclusive. Total annual extraction of ore plus waste
from the pit should range from 35 to 45&nbsp;million tonnes per year from 2002 to
2010 and decrease rapidly thereafter.
</FONT>
<P align="left"><FONT size="2">The ultimate pit shell contains approximately 470&nbsp;million tonnes of material,
of which approximately 120&nbsp;million tonnes are proven and probable reserves and
350&nbsp;million tonnes are waste, for an overall waste/ore stripping ratio of 2.9.
Most waste material will be disposed of offshore in deep water.
</FONT>
<P align="left"><FONT size="2">Mining of sulfide ore commenced in the Minifie area because of its higher grade
and shallower depth, and will be extended over time to encompass the Lienetz
and Coastal deposits. During 2000/2001 most of the mining was from Phase 3 of
the Minifie ore body and during 2002/2003 from Phase 4. Production of ore from
the high grade Phase 5 in the Lienetz ore body is scheduled to start in 2005.
</FONT>
<P align="left"><FONT size="2">Material moved during 2002, 2001 and 2000 is shown in the table below.
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>K tonnes</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>g Au/t</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>K tonnes</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>g Au/t</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>K tonnes</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>g Au/t</B></FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">High-Grade Sulphide Ore</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,985</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5.20</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,225</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6.29</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,241</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6.39</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Low-Grade Sulphide Ore</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,305</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2.31</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,626</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2.59</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6,084</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2.73</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Oxide Ore</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">95</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2.19</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total Ore</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">9,290</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3.86</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">7,851</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4.11</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">10,419</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4.22</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total Waste</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">30,723</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">24,082</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">25,696</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total Material</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">40,013</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">31,933</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">36,115</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2"><B><I>Pit Design and Planning. </I></B>The ultimate pit design was determined using Whittle
Four D pit optimization software. Optimal shells were derived for a range of
gold prices and grouped into pseudo pit phases. Detailed designs were
developed for all phases out to and including the ultimate pit shell. These
detailed designs were then scheduled using a Rio Tinto developed scheduling
package with cut-off grade optimisation and a bench scheduling package in
Medsystem to undertake detailed scheduling. A 7% discount rate was used in the
</FONT>
<P align="center"><FONT size="2">23</FONT>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left"><FONT size="2">schedules. This procedure was repeated using a range of optimized shells as
the final pit, in order to determine which shell realized the highest net
present value for the project. This shell was then used as the basis for
designing the ultimate pit.
</FONT>
<P align="left"><FONT size="2">Pit optimization used processing and fixed costs projected at the time. A
processing recovery of approximately 90% was used.
</FONT>
<P align="left"><FONT size="2">Inter-ramp slope angles ranged from 15o to 26o in soil-strength material, 33o
to 35o in weak rock and 50o in hard rock. In areas that are predominantly
waste, mining is carried out on 12-meter benches. In all other areas, 6-meter
benches are used. The primary excavation fleet consists of three 25 cubic
meter capacity hydraulic shovels. Material haulage utilizes 24 rear dump haul
trucks, each with a capacity of 142 tonnes.
</FONT>
<P align="left"><FONT size="2"><B><I>Mining Sequence. </I></B>The mining sequence was determined by attempting to maximize
the net present value of the deposit using computer techniques. This resulted
in 12 mining phases with a variable mill feed cut-off grade for direct process
ore for each year of the Mining Period. The initial phase was centered on the
Minifie deposit, with the next three mining phases expanding downwards and
outwards, more or less in a series of concentric shells. A cutback to the
north east corner of Minifie follows and the next three phases develop the
Lienetz and Coastal deposits. The final phases are cutbacks on the east and
the west of the Minifie and the Leinetz ore bodies allowing access to deeper
mineralised zones.
</FONT>
<P align="left"><FONT size="2"><B><I>Production Scheduling. </I></B>Because of the nature of the ore deposits, it is not
possible to mine only higher-grade material during the mining period. In order
to maximize net present value, the mining and production schedule was
structured to deliver the maximum amount of higher-grade ore to the process
plant as soon as possible, consistent with an orderly mining schedule. In
addition to mining higher ore grade blocks first, a variable mill feed cut-off
grade was established for each year. Ore with a grade equal to or greater than
the applicable annual mill feed cut-off grade is sent directly to the process
plant, while ore with a grade below the cut-off grade (but above the regular
waste/stockpile cut-off grade of 1.7g Au/t) is stockpiled for later processing.
The waste/stockpile cut-off was calculated based on a total cash cost of
US$14.29 per tonne of stockpile ore, selling costs of 2.5%, processing recovery
of 87.5% and a gold price of US$305 per ounce.
</FONT>
<P align="left"><FONT size="2">The annual mill feed grade is expected to lie in the range 2.7 g Au/t to 6.1 g
Au/t during the mining period, with an overall grade of approximately 4.6 g
Au/t for the entire period. At the end of the mining period, the various
stockpiles are expected to contain approximately 70&nbsp;million tonnes of material
averaging around 2.4 g Au/t, and this material is expected to sustain
processing operations for a further period of 15&nbsp;years.
</FONT>
<P align="left"><FONT size="2"><B><I>Sulfur Content </I></B>While the average sulfur content of the reserves is 5.6%, the
sulfur content is variable. Therefore, significant effort is committed to
controlled blending of plant feed to maximize autoclave throughput. The ore
blend and sulfur target varies depending on ore reactivity, the number of
operating autoclaves (target sulfur for complete oxygen utilization is lower
when three autoclaves are on line), ore settling characteristics and gold
grade. In September 2001 two of three autoclave heat recovery units were
commissioned, with the third commissioned in March 2002. The heat recovery
units have succeeded in making the autoclaves less sensitive to the sulfur
content of the process plant feed.
</FONT>
<P align="left"><FONT size="2"><B><I>Low Grade Ore Stockpiles. </I></B>All ore grading below the applicable annual mill
feed cut-off grade but above the waste/stockpile cut-off grade of 1.7 g Au/t
will be stockpiled for processing after open pit mining ceases. In addition,
at the request of the PNG Government sulfide ore between 1.6 g/t and 1.7 g/t
will also be stockpiled for the first 6.5&nbsp;years of production, till the end of
2003. There will be three stockpiles, one of which will be built offshore in
Luise Harbor on a platform of waste rock and two of which will be land-based.
</FONT>
<P align="center"><FONT size="2">24</FONT>
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<P align="left"><FONT size="2"><B><I>Waste Rock Disposal. </I></B>Because of the lack of suitable land, the potential for
seismic activity, high rainfalls and the potential for acidic run-off, the
company and the PNG Government concluded that land-based disposal of waste rock
was not a viable option and that the preferred option, in terms of cost and
environmental acceptability, was to use some of the waste rock to build the
base of the stockpile in Luise Harbor and to dispose of surplus or unsuitable
material offshore. The waste disposal facility comprises four bottom dump
self-propelled barges and two loading docks of three bays each in a single
wharf structure.
</FONT>
<P align="left"><FONT size="2"><B><I>Dewatering and Geothermal Control. </I></B>The Lihir mine pit poses unique challenges.
The gold resource is associated with a residual geothermal system and is
located adjacent to the sea. The pit must be dewatered to keep the water table
below the operating level of the mine, for which purpose there are 12 operating
dewatering wells with a capacity of about 700 litres per second. Dewatering
operations successfully maintained dry pit operating conditions throughout
2002, with the base of the Minifie pit now reaching 120 m below sea level.
During 2002, the first four dewatering wells were completed in the Lienetz
area, ahead of commissioning during 2003. These wells are the first installment
of the Lienetz pit dewatering system and will lift anticipate pumped production
to 900l/s, after allowing for decommissioning of two wells in Minifie
</FONT>
<P align="left"><FONT size="2">While the Luise Caldera, where mining operations take place, is no longer an
active volcanic center, the residual geothermal system must be made safe, by
reducing temperatures and pressures in the vicinity of the pit, in order that
high temperature waters and steam generation do not pose a threat to the safety
of operations.
Since 1999, 10 deep wells ( greater than 1000m depth ) and 18 shallow wells
(400-600m) have been completed. Steam discharge has now been continuous since
2000, with wells in the west Minifie and North Lienetz areas operating during
this period. Five newly drilled (2002- Q1 2003) wells in the North West
Lienetz area will be commissioned in early 2003 and will increase steam
discharge levels ahead of the development of the Lienetz pit
</FONT>
<P align="left"><FONT size="2">Power generation using geothermal steam has been demonstrated to be a viable
option for Lihir.
</FONT>
<P align="left"><FONT size="2">In early 2002, a 6Mw pilot plant was approved for construction, and was
commissioned in April 2003. This plant is fed on steam from the shallow steam
relief wells already completed as part of the mining development.
Well testing to determine steam production capacity from the larger Ladolam
steam resource indicates an ultimate power generating potential in excess of
30Mw. A feasibility study for the stage 2 development of a larger power
station (nominally 30Mw) is at an advanced stage and is exepcted be completed
in the first half of 2003
</FONT>
<P align="left"><FONT size="2">Information gathered from the recent programs indicates that less geothermal
drilling will be needed for mining control than was predicted in the
Feasibility Study.
</FONT>
<P align="left"><FONT size="2"><B><I>Mine Drainage. </I></B>The average annual rainfall at the Lihir Project site is
approximately 3,700 millimeters, with a maximum-recorded one-hour intensity of
65 millimeters. For this reason, considerable attention has been paid to the
design of appropriate facilities for mine drainage. This includes a system of
surface diversion ditches designed to intercept storm water flows before they
enter the open pit. A system of in-pit collection ditches and sumps has also
been incorporated into the design of each of the phases of pit development.
Despite these design provisions, however, mine production has to be suspended
during periods of intense rainfall.
</FONT>
<P align="left"><FONT size="2"><B><I>Mining Equipment. </I></B>The major mining equipment selected for the Lihir Project
has been sized for the levels of production contemplated by the current life of
mine plan. Most of the mining fleet was purchased from the mining contractor
on April&nbsp;17, 2000 on termination of contract mining and movement to owner
mining. The transition from operator mining owner mining to owner mining was
smooth with the majority or the contractor equipment and staff transferring to
LMC at this time. In the ensuing period the mining fleet complemented by the
purchase of three additional haul trucks has met the requirements of the
operation.
</FONT>
<P align="center"><FONT size="2">25</FONT>
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<P align="left"><FONT size="2"><B><I>Processing</I></B>
</FONT>
<P align="left"><FONT size="2"><B><I>General. </I></B>The company&#146;s processing plant is on an area known as Putput, at the
mouth of Luise Harbour. Lihir ore is termed refractory, meaning that
conventional extraction of gold by cyanidation is not viable without
pre-treatment. The Lihir process plant incorporates a pressure oxidation
pre-treatment step using autoclaves to release the gold. This in turn is
followed by conventional cyanidation.
</FONT>
<P align="left"><FONT size="2">The plant&#146;s facilities first crush and grind the ore into a slurry suitable for
pressure oxidation. A small flotation plant is used to concentrate a portion
of the slurry as required to optimise the autoclave process. The ore is then
subjected to pressure oxidation, counter-current decantation (CCD),
neutralization, carbon-in-leach (CIL), and tailings disposal. Gold is
recovered from the CIL process through carbon stripping, electrowinning and
smelting.
</FONT>
<P align="left"><FONT size="2">The processing plant was initially designed to treat 375 tonnes of ore per hour
at a design sulfur grade of 7.2%. A design autoclave operating time of 89% of
total time was used resulting in a plant capacity of 2.9&nbsp;million tonnes per
year. The processing plant was upgraded in 1999 to include a second oxygen
plant and a small flotation plant. Three autoclave heat recovery vessels,
used to pre-heat autoclave feed were installed in 2001 along with a 12th power
generator. In 2002 a pebble crusher was installed in the grinding circuit to
increase grinding capacity. Over 3.8&nbsp;million tonnes of ore was processed
through the plant in 2002 to produce 607,088 ounces of gold.
</FONT>
<P align="left"><FONT size="2"><B><I>Crushing. </I></B>Run-of-mine stockpiling and primary crushing facilities,
incorporating a gyratory crusher, are located at the Ladolam Creek area,
approximately 500 meters east of the ore bodies. All other processing
facilities are located at Putput, approximately one kilometre southeast of the
Ladolam Creek area. Soft ore bypasses the gyratory crusher and is processed
separately through a toothed-roll crusher. A series of conveyors transport the
crushed ore to a stockpile of approximately 36,000 tonnes capacity located at
the Putput processing plant.
</FONT>
<P align="left"><FONT size="2"><B><I>Stockpiling and Blending. </I></B>Ore is reclaimed from the stockpile via under pile
feeders and conveyed into the semi-autogenous grinding (SAG)&nbsp;mill. Soft ore
that does not flow freely through the under pile feeders is reclaimed by front
end loader and fed through a separate feeder.
</FONT>
<P align="left"><FONT size="2"><B><I>Grinding and Thickening. </I></B>Water is added and steel balls and the ore itself
grind the ore down to a fine particle size in the SAG mill. Coarse pebbles
rejected from the SAG mill are conveyed and crushed separately in the pebble
crushing circuit before returning to the SAG mill feed stream. SAG mill
discharge slurry is pumped to cyclone classifiers that separate coarse from
fine particles. Coarse material is directed into a ball mill for further
grinding before reclassification, whilst fine material continues on to a
thickener. In the thickener, water is recovered and flocculent is used to
assist the settling of solids. Thickened slurry is pumped to the pressure
oxidation circuit.
</FONT>
<P align="left"><FONT size="2"><B><I>Pressure Oxidation. </I></B>The Lihir pressure oxidation circuit utilizes Dynatech
(formerly Sherritt) patented technology and is typical of pressure oxidation
autoclave circuits used to treat refractory gold ores elsewhere in the world.
Feed slurry is first pre-heated to 80 deg C in heat recovery vessels before
being pumped under high pressure into three horizontal, six compartment
autoclave vessels. Inside the autoclave, slurry is subjected to an operating
pressure of 2,400 kPa and a temperature of 200 &#151; 210 deg C. Pure oxygen added
into the autoclaves causes rapid oxidation of sulfide minerals, and consequent
release of gold particles, to occur. Autoclave discharge slurry is
depressurized into a flash vessel where temperature and pressure are reduced to
atmospheric conditions. Resultant steam produced in the flash vessels is used
to pre-heat autoclave feed in direct contact heat recovery vessels. Carbon
dioxide, nitrogen and residual oxygen is vented from the autoclaves into the
atmosphere.
</FONT>
<P align="center"><FONT size="2">26</FONT>
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<P align="left"><FONT size="2">High pressure gaseous oxygen for the pressure oxidization process is provided
via two cryogenic oxygen plants located adjacent to the processing plant.
Liquid oxygen is also produced and stored for backup and emergency
requirements.
</FONT>
<P align="left"><FONT size="2"><B><I>CCD Washing and Neutralization. </I></B>Oxidised slurry then passes through a
two-stage CCD thickener circuit where it is washed with process water and sea
water. Slurry acidity is then further neutralized by the addition of
milk-of-lime, which is prepared from imported quicklime in a slaking circuit.
In this way, slurry pH level is increased to an appropriate level for cyanide
leaching. Dilution water is added to reduce slurry viscosity in preparation
for CIL processing
</FONT>
<P align="left"><FONT size="2"><B><I>CIL Processing. </I></B>Gold is recovered from the oxidised and neutralised slurry in
a Carbon-In-Leach (CIL)&nbsp;circuit. The circuit consists of several large,
agitated tanks. In the first tank, sodium cyanide is added to the slurry to
begin leaching gold into solution. Coarse, granular carbon is added to
subsequent tanks to adsorb dissolved gold. Agitation ensures that the slurry,
cyanide and carbon are well mixed and suspended so that all gold containing
particles are leached and adsorbed onto carbon. Slurry flow progresses through
the tanks whilst carbon, retained by screens, is pumped in a counter-current
direction and progressively loads with adsorbed gold
</FONT>
<P align="left"><FONT size="2"><B><I>Tailings Disposal. </I></B>Plant tailings are first treated to detoxify remaining free
cyanide through the mixing of a portion of the iron-bearing wash solution from
the CCD circuit with CIL circuit tailings. This results in the complexation of
free cyanide with iron. The balance of the CCD wash liquor is combined with
power plant and oxygen plant cooling water streams before combining with the
detoxified tailings stream.
</FONT>
<P align="left"><FONT size="2">The combined streams are subsequently discharged into the ocean via a pipeline
at a depth of 128 meters, which is below the mixed layer of the ocean. The
surface mixed layer, which is the uppermost layer of the ocean that is
constantly mixed by wind and wave action, varies with location and time, with a
maximum depth of 98 meters being recorded to date at Lihir. Being denser than
the receiving seawater, tailings discharged below the surface mixed layer move
down the steep submarine slope and will not rise to the surface. See
&#147;Environmental Considerations&#148; below for a discussion of this method of
tailings disposal and its possible environmental impacts.
</FONT>
<P align="left"><FONT size="2"><B><I>Gold Recovery. </I></B>Loaded carbon is recovered from the CIL circuit and stripped of
gold by means of the continuous Anglo-American Research Laboratories elution
system. This involves soaking gold-loaded carbon in a hot caustic / cyanide
solution, causing gold to release from carbon back into solution, and then
rinsing the carbon with hot demineralised water. Stripped carbon is then
regenerated by heating in an atmosphere of steam, before being returned to the
CIL circuit.
</FONT>
<P align="left"><FONT size="2">Gold bearing solution from the elution process is circulated through
electrowinning cells where gold is recovered from solution through
electro-plating to produce a gold sludge. Finally, the sludge is dried and
smelted in a furnace to produce dor&#233; bars. The gold recovery facility has been
designed to treat up to 20 tonnes per day of loaded carbon.
</FONT>
<P align="left"><FONT size="2">The overall ore treatment process is designed to recover between 88%-94% of
contained gold, depending on ore source. Overall plant recovery for 2002 was
90%.
</FONT>
<P align="left"><FONT size="2">Lower grade ores from the mine have been stockpiled for future processing.
Weathering and natural oxidation of stockpiled ores has the potential to
inhibit autoclave throughput by reducing the grade of sulfide sulfur in the
ore. To mitigate this effect, a number of measures have been taken:
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">Stockpiles have been covered with plastic to reduce the rate of
oxidation.</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">27</FONT>
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<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">The heat recovery circuit commissioned in the third quarter of 2001
enables the pressure oxidation circuit to treat a lower grade of sulfide
sulfur in ore feed.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">The pilot flotation plant provides the opportunity to increase the
sulfide sulfur grade of stockpile ore if required.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2"><B><I>Limestone Deposits. </I></B>The original project design incorporated a lime plant
treating local limestone. While tests of the local limestone confirmed its
chemical suitability, it was also indicated that the limestone may prove too
friable for calcining in conventional shaft or rotary lime kilns. As a result
the processing plant utilises commercial quicklime imported in 20 tonne
containers.
</FONT>
<P align="left"><FONT size="2"><B><I>Infrastructure</I></B>
</FONT>
<P align="left"><FONT size="2">Little or no infrastructure existed on Lihir Island prior to the commencement
of activity by the company and development of the Lihir operation required a
significant program of infrastructure construction. Besides the processing
plant and barge loading facilities for waste rock disposal, infrastructure now
includes a main administration office, an analytical/environmental laboratory,
a training building, a warehouse, a plant maintenance facility and emergency
facilities and a power plant consisting of twelve diesel generators, each of
6.3 megawatts. Infrastructure for the workforce includes housing and related
community facilities such as a school, medical center, supermarkets, an open
market and a police station. A wharf has been constructed at Putput for
general cargo ships and tankers. A new airstrip and terminal facilities have
been constructed on the northern portion of the island. The existing road
connecting the airstrip and the project site has been improved and the ring
road around the island completed.
</FONT>
<P align="left"><FONT size="2">Fresh water is required in the processing plant and in the grinding circuit to
reduce the chloride content of the ore. Potable water is also required. The
nearest available source of water in sufficient quantity is the Londolovit
River, where a weir and storage area have been constructed. While the company
had sufficient water through six months of drought conditions in 1997, it was
necessary during that time to supplement the water from the Londolovit river
with water from streams closer to the process plant. Construction of a dam on
Lakunbut Creek to provide additional water storage may be required for future
drought conditions or for the additional water demand that would result from
increased throughput of ore in the process plant. Lihir is currently
evaluating the construction of this dam.
</FONT>
<P align="left"><FONT size="2">Communications at the site, within the island and with the outside world, are
vital and have been improved through the installation of a satellite link
providing public access to the national telephone network. Marine and
aeronautical radio systems are installed.
</FONT>
<P align="left"><FONT size="2"><B><I>Workforce</I></B>
</FONT>
<P align="left"><FONT size="2"><I>At December 2002, total employment was 978 employees.</I> Of this number 37% are
Lihirian, 54% other Papua New Guinean nationals and 9% expatriates from various
countries. The company employed and trained 45 apprentices at the end of 2002,
having recruited an additional 15 apprentices throughout the year. Numerous
training programs were conducted over the year for both new and existing
employees ranging from mine equipment operation and licensing to process plant
operation and general and technical skills training.
</FONT>
<P align="center"><FONT size="2">28</FONT>
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<P align="left"><FONT size="2"><B><I>Community Affairs</I></B>
</FONT>
<P align="left"><FONT size="2">In 1995 Lihir negotiated a comprehensive set of compensation agreements with
the people of Lihir, known as the Integrated Benefits Package (IBP). A
significant part of Lihir&#146;s community affairs efforts is directed towards
ensuring compliance not only with these commitments but also the spirit of the
undertakings in the light of changing circumstances. Additionally, the
community affairs section has an overall focus on maintaining and strengthening
the best possible relationship with the Lihirian community by developing an
understanding of Lihir&#146;s operations in the community and engendering trust
through an open, honest and transparent consultation process.
</FONT>
<P align="left"><FONT size="2">The IBP of agreements is now seven years old and the original concept of a mine
has materialized into a fully functioning operation. In June 2001 the local
community, Lihir, the PNG National, Provincial and Local Level Governments
commenced a full review of the Integrated Benefits Package of agreements to
assess how they might be improved to serve the various parties better in the
future. The review process is expected to be completed by mid 2003.
</FONT>
<P align="left"><FONT size="2">The Lihir Group is made up of four islands with a total population (as at 27
March 2003) of approximately 12,577 persons, approximately 9,363 of whom live
on Lihir Island.
</FONT>
<P align="left"><FONT size="2">The Lihir Group is two hours&#146; travel by motorized boat from either New Ireland,
Tanga or Tabar islands. Because of this relative geographic isolation, the
Lihir Group community is fairly self-contained and does not experience any
large immigration, which is common in other parts of PNG and which can make
determination of land ownership extremely difficult. The people of the Lihir
Group share a common language and the same clan structure, factors which
assisted in the conduct of the compensation negotiations.
</FONT>
<P align="left"><FONT size="2">The Integrated Benefits Package includes a compensation agreement and a
relocation agreement which were signed on April&nbsp;26, 1995, by Lihir Management
Company (initially on behalf of the joint venture but with an acknowledgment
that they will subsequently be on behalf of the company) and by various groups
of landowners and residents on Lihir Island from areas required by the company
for the mine and associated facilities. The Compensation Agreement and
Relocation Agreement satisfied the requirements of the PNG Mining Act for
compensation arrangements to be in place before mining commences.
</FONT>
<P align="left"><FONT size="2">The compensation agreement provides for compensation to be paid to the
landowners for cleared, damaged or otherwise affected land, or land possession
of which they will lose as a result of the Lihir operation, for loss of
economic plants, for loss of man-made structures, for loss of marine resources
and wildlife, for discoloration or other adverse effects on creek water and
seawater, for disturbance of burial grounds and sacred sites and for other
miscellaneous effects of the Lihir operation. Additional compensation has been
and as required will continue to be paid to landowners in the Ladolam pit area
for land possession of which they will lose as a result of the Lihir operation.
In addition, the compensation agreement provides that the PNG Government has
assigned to, and the landowners will be paid royalties per cubic meter for
sand, gravel and coronous material excavated from their land.
</FONT>
<P align="left"><FONT size="2">The relocation agreement provided for the relocation of residents of the mine
pit and plant site areas to other parts of Lihir Island. To facilitate this,
Lihir Management Company agreed to construct or provide materials for 84
relocation homes to relocate approximately 180 people from the proposed site
for the processing plant and to pay allowances to the residents to assist them
to re-establish themselves and their families in the new locations. The
majority of these relocation homes have now been completed, with the remaining
homes to be phased in over the ensuing five years as the present generation of
adolescents come of age. Future generations of the relocatees will be assisted
through a trust fund which was established on March&nbsp;17, 1995 when the Special
Mining Lease was
</FONT>
<P align="center"><FONT size="2">29</FONT>
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<P align="left"><FONT size="2">granted. Various community facilities have also been constructed or relocated
and several local businesses have been relocated or compensation has been paid.
</FONT>
<P align="left"><FONT size="2">A further relocation agreement between Lihir Management Company, some residents
of Kapit Village, landowners of that area and the local landowner association
was entered into in July 1995. This is similar to the Relocation Agreement and
provides for 35 relocation houses and the establishment of trusts for the
long-term benefit of landowners, residents and their children. Twenty of the
houses have been constructed and the trust has been established by the company.
</FONT>
<P align="left"><FONT size="2">Both the compensation agreement and the relocation agreement provide for the
establishment of trusts for the long term benefit of landowners and residents
and their children and contain acknowledgments by the landowners and residents
that these agreements properly and adequately provide for their compensation
(statutory and otherwise) and that they waive any rights to bring action or
suit for further compensation in respect of matters covered by the compensation
and relocation agreements.
</FONT>
<P align="left"><FONT size="2">In addition, two memoranda of agreement were signed on April&nbsp;26, 1995 by the
landowners association and the local development authority for the Lihir Group,
one with the PNG Government and the other with the New Ireland Provincial
Government. A third memorandum of agreement was signed on March&nbsp;17, 1995
between the PNG Government and the New Ireland Provincial Government.
Collectively, they provide for the sharing of the royalties payable by the
company under the Mining Act, the grant of the option to the Lihirian company
to purchase one-half of the ordinary shares owned by the PNG Government (MRL)
immediately prior to the consummation of the global offering, the provision of
government infrastructure and services on Lihir Island, the maintenance of law
and order, the provision and use of special support grants, training of
Lihirians and business development.
</FONT>
<P align="left"><FONT size="2">The company continues to examine ways of promoting self-help and
self-determination rather than have the community develop into a cycle of
corporate dependence. The company works closely with the Lihir Mining Area
Landowners Association (LMALA)&nbsp;and, through the IBP review is currently
developing a new five-year sustainable development plan to promote community
development through self-help. The Lihirian people are a proud community and
have historically been extremely self-sufficient due to their geographical
isolation. Lihir&#146;s community leaders are aware of the impacts large
development can have on traditional lifestyles and are working with the company
to ensure that the many benefits resulting from the mine lead to a long term
social enhancement.
</FONT>
<P align="left"><FONT size="2">Having addressed the accommodation and compensation aspirations of Lihirians in
those areas directly affected by the mine, attention is focused on the needs of
other Lihirian people.
</FONT>
<P align="left"><FONT size="2">Under the Integrated Benefits Package, the company has made substantial annual
compensation and other payments to landowners and other Lihirians as shown in
the table below.
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%">
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="49%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>1999</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>1998</B></FONT></TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan=2><FONT size="2">Kina millions</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">26.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">18.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">12.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">8.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">US$&nbsp;millions equivalent</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">30</FONT>
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<P align="left"><FONT size="2">Even though the company has put significant effort into addressing landowner
issues, the company cannot guarantee that disputes will not disrupt operations
in the future. See &#147;Risk Factors&#148;.
</FONT>
<P align="left"><FONT size="2"><B><I>Business Development </I></B>- LGL provides direct support for business development to
the local community through its business development office, or BDO. BDO is
supporting the local business community to develop realistic, sustainable
commercial opportunities. BDO assistance to local businesses included the
development of business plans, managerial advice, preparation and lodgment of
VAT, group tax and company returns, secretarial support and business training.
More than 120 small businesses operate on Lihir, most of which have received
some form of assistance from BDO.
</FONT>
<P align="left"><FONT size="2">BDO continues to provide advice and assistance to local businesses to ensure
compliance with the Companies Act and Business Group Registration Act.
</FONT>
<P align="left"><FONT size="2">Many local businesses continue to benefit from LGL by providing goods and
services to the Lihir project. During 2002 more than 72&nbsp;million Kina (US$18
million) worth of contracts and casual work went to local businesses. Local
business development creates employment and generally contributes to the local
economy.
</FONT>
<P align="left"><FONT size="2">BDO also has an established agriculture section that provides technical
assistance to local farmers in vegetable farming, chicken farming, and
piggeries.
</FONT>
<P align="left"><FONT size="2"><B><I>Education Assistance &#151; </I></B>In 2003, LMC will continue to assist Lihirian students
through a range of programmes. Funding has already been distributed to 68
individuals and 34 local schools under the Lihirian Education Assistance
Programme. In addition, 34 full scholarships for tertiary study will be
provided, including up to 12&nbsp;weeks industrial training on site.
</FONT>
<P align="left"><FONT size="2"><B><I>Health and Safety</I></B>
</FONT>
<P align="left"><FONT size="2">The company is committed to promoting the health and safety of its employees
and the neighbouring community through effective management practices. Health
and safety improvements are sustained by the setting and review of targets,
assessing and reporting of safety performance and adoption of best available
practices for the conditions in which the company operates.
</FONT>
<P align="left"><FONT size="2">Two important measures of Lihir&#146;s safety management efforts are the lost time
injury frequency rate (LTIFR)&nbsp;and the lost time injury severity rate (LTISR).
A &#147;lost time injury&#148; results when an employee or contactor cannot return to
their normal duties the following shift. Between 1998 and 2002 the company
LTIFR was 0.41, 0.34, 0.35, 0.46 and 0.30 respectively, per 200,000 hours
worked. The LTISR has reduced from a peak of 5.27 in December 1999 to 1.30 in
December 2002. In 2000 Lihir recorded and investigated 78 reported incidents,
in 2002 this increased to 293 reported incidents. Lihir believes that this is a
positive indicator that our safety awareness programs are working and both our
employees and contractors understand the importance of reporting an incident
and/or near miss when they see it.
</FONT>
<P align="left"><FONT size="2">A site safety plan was developed in 2001, to address the high-risk areas
identified through various audits conducted on site. That plan will continue in
2003 with 14 projects being run concurrently with implementation by the end of
the year. Other initiatives have included the introduction of a safety
newsletter, contractor safety meetings, improved training programs and the
expansion of our Job Safety Observation and Take 5 programs. All these
initiatives continue to raise awareness of safety and our safety management
system. Our aim is to
</FONT>
<P align="center"><FONT size="2">31</FONT>
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<P align="left"><FONT size="2">consolidate and realize the gains from earlier efforts and to change the
behaviour of our workforce and contractors. Lihir was audited by NOSA in 2002,
and achieved a safety effort rating of 78.8%, and awarded another star making
it a 4 star site.
</FONT>
<P align="left"><FONT size="2"><B><I>Community Health </I></B>- An important benefit provided to the Lihirian community is
better health care. Currently the company provides medical services to
employees, contractors and their dependents as well as to the local people
through the Lihir medical center at Londolovit, which offers outpatient,
inpatient and preventative health care services. The medical center also
provides support through the provision of drugs and services to all the
government and mission run health facilities throughout the Lihir group of
islands.
</FONT>
<P align="left"><FONT size="2">Through the medical center the company continues to target malaria and other
parasitic infections through the vector control program, or VCP, which is
regularly audited by a consulting entomologist. The VCP has seen admission to
the medical center due to malaria drop in the last three years from 22% of the
population in 1998 to 10% in 2001. The VCP has been largely concentrated
within villages close to the mining development resulting in reductions in the
percentage of persons infected with malaria in those areas from as high as 50%
to less than 10%.
</FONT>
<P align="left"><FONT size="2"><B>Management</B>
</FONT>

<P align="left"><FONT size="2"><B><I>General</I></B>
</FONT>
<P align="left"><FONT size="2">Lihir Management Company, a wholly-owned subsidiary of Rio Tinto, manages the
company and the Lihir operation pursuant to the management agreement between
the company and Lihir Management Company, the terms of which are discussed in
detail below. The managing director of Lihir Management Company is also the
managing director of the company and reports directly to the company&#146;s board of
directors. As a consequence of the management agreement, Lihir has no
executive officers or senior management personnel who are not also executive
officers or senior management personnel of Lihir Management Company.
</FONT>
<P align="left"><FONT size="2"><B><I>Mining Contractor</I></B>
</FONT>
<P align="left"><FONT size="2">The feasibility report contemplated that the bulk of mining operations would be
carried out by contractors during the entire mining period but that this would
be reviewed prior to the end of the then current contracts. In October 1995
the company entered into a mining contract under which the mining contractor
(the Thiess-Roche Lihir Joint Venture) was responsible for stripping and
preparing the mine site, drilling, preparing blast holes, extracting, loading
and hauling ore and waste, establishing stockpiles, in-pit dewatering, slope
control and operating the waste rock barge fleet. In June 1999 the mining
contract was varied so that the mining contractor reduced the unit rates for
the works. This provided a yearly saving to the company of approximately 9%,
equivalent to approximately US$6&nbsp;million per year.
</FONT>
<P align="left"><FONT size="2">Following a review of the benefits of contract as compared with Lihir operating
the mine itself, Lihir determined to exercise its rights of early termination
under the mining contract and signed a heads of agreement with the mining
contractor on March&nbsp;17, 2000 whereby the company cancelled the mining contract
effective April&nbsp;17, 2000 and purchased the mining fleet and equipment from the
mining contractor. The capital cost of the acquisition of the mining fleet and
associated equipment, spares and stock from the mining contractor was US$42.3
million. Under the heads of agreement the final contractual payments to the
mining contractor upon the termination of the mining contract were also agreed.
These payments included a lump sum amount of US$7.7&nbsp;million which encompassed
both the payment due under the termination formula contained in the mining
contract
</FONT>
<P align="center"><FONT size="2">32</FONT>
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<P align="left"><FONT size="2">and a sum to settle remaining contractual claims by the mining contractor.
This termination fee was expensed in 2000.
</FONT>
<P align="left"><FONT size="2">Lihir Management Company is now responsible for managing the work previously
undertaken by the mining contractor. In addition, Lihir Management Company is
responsible for providing mine staff and engineering personnel, mine planning
and slope design, slope erosion protection, definition drilling, ore control
and sampling and groundwater and geothermal control.
</FONT>
<P align="left"><FONT size="2"><B><I>Blasting Contractor</I></B>
</FONT>
<P align="left"><FONT size="2">On March&nbsp;14, 1996, the company entered into a Contract Explosives Services
Agreement with Orica Papua New Guinea Ltd to supply explosive services for the
Lihir operation through to June&nbsp;30, 2002. The Agreement was immediately
assigned as a nominated subcontract to the mining contractor. The awarding of
the contract followed testing by the successful contractor and the contractor
being able to demonstrate to the company that its specially compounded emulsion
explosives are suitable for the high rock temperatures and reactive soils that
characterize the Lihir mine. As a sub-contractor of the mining contractor
nominated by the company, the blasting contractor is required to procure,
transport and store all explosive products; manufacture and deliver explosives
into blast holes; prime, tie-in and initiate the blasting; and provide all
facilities for manufacture and storage, including warehouses, magazines, labour
and supervision. The blasting contractor is provided with fuel, power and
potable water by Lihir.
</FONT>
<P align="left"><FONT size="2">At times blasting at Lihir is carried out under unusual conditions of high
blast hole temperatures. The sulfide-bearing rock is both wet and reactive
with nitrate based compounds. Special explosives are required to deal with
these conditions and the blasting contractor manufactures these explosives at
the site.
</FONT>
<P align="left"><FONT size="2">In June 1999 the Contract Explosives Services Agreement was amended providing a
substantial reduction in the explosive pricing due to modifications in the
product and the use of alternative raw material suppliers. The savings to
Lihir amount to US$1.5&nbsp;million per year. In return the term of this agreement
was extended to the earlier of March&nbsp;31, 2009 or the completion of mining. The
amended agreement now contains a re-price review on a two yearly basis that
will take into account factors such as technical improvements, site factors,
and genuine competitive options available to Lihir.
</FONT>
<P align="left"><FONT size="2">Following termination of the mining contract on April&nbsp;17, 2000, the blasting
contractor is now contracted directly to Lihir.
</FONT>
<P align="left"><FONT size="2">In December 2002, Lihir renegotiated the purchase price of bulk explosives from
the blasting contractor, taking advantage of Rio Tinto group purchasing and
bulk buying power. The net result was cost neutral with higher operational
flexibility and productivity.
</FONT>
<P align="center"><FONT size="2">33</FONT>
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<!-- link3 "C. Organization and Structure" -->
<DIV align="left"><A NAME="012"></A></DIV>
<P align="left"><FONT size="2"><B><I>C.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Organization and Structure</I></B>
</FONT>
<P align="left"><FONT size="2">Lihir is classified by Rio Tinto as a principal associate, rather than as a
subsidiary. Rio Tinto holds 16.26% of Lihir&#146;s shares.
</FONT>
<P align="left"><FONT size="2">As a result of the merger effected on February&nbsp;2, 2000, Niugini Mining Limited
is a 100% owned subsidiary of Lihir. Niugini Mining is registered in Papua New
Guinea. It has no continuing operations. Niugini Mining is the sole
subsidiary of Lihir Gold.
</FONT>
<P align="left"><FONT size="2">Niugini Mining Australia (Pty) Limited is a 100% owned subsidiary of Niugini
Mining Limited and is registered in Australia. Niugini Mining Australia (Pty)
Limited has no current operations but refer to Note 21 to the financial
statements in regard to contingent liabilities. Niugini Mining Australia (Pty)
Limited is the sole subsidiary of Niugini Mining Limited.
</FONT>
<!-- link3 "D. Property, Plant and Equipment" -->
<DIV align="left"><A NAME="013"></A></DIV>
<P align="left"><FONT size="2"><B><I>D.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property, Plant and Equipment</I></B>
</FONT>
<P align="left"><FONT size="2"><B>Lihir Island</B>
</FONT>

<P align="left"><FONT size="2">Lihir Island is the largest of the Lihir Group of four islands. It is located
approximately 700 kilometers northeast of the PNG capital of Port Moresby. The
Lihir Group forms part of the province of New Ireland.
</FONT>

<P align="left"><FONT size="2">Lihir Island is a volcanic seamount that rises steeply from sea level to about
600 meters above sea level. It is approximately oval in shape, roughly 22
kilometers long from north to south and 14.5 kilometers from east to west at
its widest points. There is a caldera from what is believed to be a no longer
active volcano (the &#147;Luise Caldera&#148;) which adjoins a harbor (the &#147;Luise
Harbor&#148;) on the east coast of the island. All of the known ore deposits of the
Lihir operation are located in the Luise Caldera. An airport capable of
handling larger aircraft and a port capable of handling 10,000 tonne ships and
40,000 tonne tankers have been constructed as part of the Lihir operation.
</FONT>
<P align="left"><FONT size="2">Lihir Island experiences a high level of rainfall, averaging about 3,700
millimeters per year, and has an annual mean relative humidity of about 80%.
The temperature generally varies between 20&#186;C and 30&#186;C (68&#186;F and 86&#186;F). Lihir
Island is north of the area most affected by cyclones. Natural vegetation is
mostly rain forest.
</FONT>
<P align="left"><FONT size="2">Prior to the development of the Lihir operation, Lihir Island was largely
undeveloped. Subsistence agriculture was the principal occupation of most
Lihirians, supplemented by some cash crops such as copra.
</FONT>
<P align="left"><FONT size="2"><B>Geology</B>
</FONT>
<P align="left"><FONT size="2">Lihir Island is made up of five Miocene-Pleistocene volcanic units, of which
three are recognizable volcanic craters (including the Luise Caldera) and two
are sequences of mafic volcanic rock that predate the three volcanoes. The
volcano that formed the Luise Caldera was the youngest major volcanic event on
the island. It was formed in the Pleistocene age, less than one million years
ago. Remnant geothermal activity is present in the Luise Caldera, evidenced by
hot springs and fumaroles. Studies of groundwater circulation suggest there is
no magma present below the Luise Caldera.
</FONT>
<P align="center"><FONT size="2">34</FONT>
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<P align="left"><FONT size="2">The Luise Caldera is a well-defined, elliptically shaped caldera, which rises
steeply to several peaks over 600 meters above sea level. The caldera is open
to the northeast where it is breached by the sea to form Luise Harbor. Luise
Caldera measures approximately 5.5 kilometers by 3.5 kilometers. Currently
defined gold mineralization occurs within an area of about 2.0 by 1.5
kilometers near the center of the caldera.
</FONT>

<P align="left"><FONT size="2">Exploration work since 1983 has defined several adjacent and partly overlapping
mineral deposits in the Luise Caldera, the principal ones being Lienetz,
Minifie, Coastal, Borefields and Kapit. Of these, the largest is Minifie,
which is about 1,000 by 600 meters with mineralization extending from the
surface (50 meters above sea level) to 250 meters below sea level. The Lienetz
deposit north of Minifie is about 800 by 400 meters, and extends from the
surface (140 meters above sea level) to 300 meters below sea level. The smaller
Coastal deposit adjoins Lienetz on the northeast, separating it from the sea.
The Borefields zone extends to the north-east along the Minifie structure and
is an extension of the Minifie mineralization. The Kapit deposit, extending
300 to 400 meters north of Lienetz, is about 800 by 500 meters with
mineralisation extending from near surface to 400m below sea level. Drilling in
2002 extended the limits of Lienetz to the North West, confirmed physical
connection between Lienetz and Kapit and extended the current knowledge of the
Kapit deposit. Kapit remains as yet incompletely explored and the extent of
economic extraction could be limited by high temperature and depth.
</FONT>
<P align="left"><FONT size="2">The bulk of the known gold mineralization is located in Minifie and Lienetz.
All of the deposits are connected by areas of low-grade mineralization. An
analysis of the structural patterns has led to the hypothesis that the Lienetz,
Coastal and Kapit areas are part of a single mineralization system, with a
separate feeder system accounting for the Minifie and Borefields
mineralization. A single final pit will be the ultimate outcome, however.
</FONT>
<P align="left"><FONT size="2">Based on exploration work to date, gold appears to be the only metal of
economic significance present within the Luise Caldera. Gold occurs primarily
as sub-micron size particles in sulfide minerals. Sulfide content is
relatively high, with the average sulfur grade of the reserves being 6.15%.
The main sulfide material is pyrite, with the marcasite form present as an
accessory mineral. Arsenopyrite is rare. Free gold is rare and located
predominantly at the fringes of the known deposits. Oxidation layers range in
thickness from minimal in low lying areas such as Minifie to a maximum of 70
meters over the higher parts of Lienetz and Coastal and Kapit.
</FONT>
<P align="left"><FONT size="2">The mineral deposits in the Luise Caldera are hosted by volcanics, intrusives
and breccias, and there has been extensive alteration of these rocks within the
caldera. Two major alteration episodes have been identified, an earlier and
deeper &#147;porphyry style&#148; event resulting in potassic alteration grading
laterally to propylitic alteration and a later and higher level epithermal
event producing argillic, advanced argillic and phyllic alteration. Because
the intensive alteration has destroyed much of the original host rock
lithology, the deposits have been classified into a series of &#147;ore types&#148; based
on alteration, hardness, degree of brecciation and similar factors. While this
is more a metallurgical classification than a geologic one, it has proved
useful in determining many of the mining and processing characteristics of the
orebody and host rocks. The ore types are roughly sub-horizontal and form a
fairly consistent vertical sequence. The general sequence is that of clay-rich
rock, grading into white mica-felspar rock, then felspar-biotite and, at depth,
into felspar-biotite-anhydrite. Within and on the boundaries of the ore types,
geological structure is also a major influence in the localization of higher
grades in the orebody.
</FONT>
<P align="left"><FONT size="2"><B>Reserves Estimates</B>
</FONT>

<P align="left"><FONT size="2">The previously reported reserve estimates included in the 2001 Form&nbsp;20F
included proven and probable gold reserves of 15.1&nbsp;million contained ounces at
a US$300 per ounce price assumption, based on 120.8&nbsp;million tonnes of ore with
an average grade per tonne of 3.90 grammes.
</FONT>
<P align="center"><FONT size="2">35</FONT>
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<P align="left"><FONT size="2">During 2002, an intensive resource definition and extension drilling program
continued at Lihir, with substantial additional drilling and assaying data
becoming available since the completion of the previous resource estimate in
December 2001.
</FONT>
<P align="left"><FONT size="2">New drill results available to October 2002 included 41000m of diamond drilling
the western sector of Lienetz (69 holes), east Lienetz/ Coastal (33 holes) ,
west Minifie (10 holes ) and in Kapit (10 holes).
</FONT>
<P align="left"><FONT size="2">Assaying and geology information from these holes was included in a major
review of Lihir&#146;s resource model completed in December 2001. The new model
reflects the identified new mineralized extensions to the Lienetz and Kapit ore
zones discovered during 2002, and a comprehensive review of mineralisation
controls in these areas.
</FONT>
<P align="left"><FONT size="2">Subsequent to the completion of the resource re-estimate, and a full review of
mining and processing costs, a re optimization of the mine design and the life
of mine schedule was completed and a revised reserve estimate prepared in
December 2002.
</FONT>
<P align="left"><FONT size="2">The ore reserves in the table below are based on the new resource model at a
US$305 per ounce gold price assumption (1.7 g Au/t cutoff) adjusted to take
account of mining depletion and reconciliation changes to December&nbsp;31, 2002.
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
    <TD width="38%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Average</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Contained</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Reserve</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Tonnes</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B><U>grade</U></B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B><U>Ounces</U></B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Category</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>(In millions)</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>(g Au/t)</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>(millions)</B></FONT></TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Unmined Ore</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="center"><FONT size="2">Proven</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4.01</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="center"><FONT size="2">Probable</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">111.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3.79</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">13.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Stockpiled Ore</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="center"><FONT size="2">Proven</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">25.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2.86</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total Reserves</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">143.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3.63</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">16.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">Reserves have been prepared in accordance with Industry Guide 7 under the
United States Securities Act of 1933 and the following definitions:
</FONT>
<P align="left"><FONT size="2">The term &#147;reserves&#148; means that part of a mineral deposit that can be
economically and legally extracted or produced at the time of the reserves
determination.
</FONT>
<P align="left"><FONT size="2">The term &#147;economically&#148;, as used in the definition of reserves, implies that
profitable extraction or production under defined investment assumptions has
been established or analytically demonstrated. The assumptions made must be
reasonable, including assumptions concerning the prices and costs that will
prevail during the life of the project.
</FONT>
<P align="left"><FONT size="2">The term &#147;legally&#148;, as used in the definition of reserves, does not imply that
all permits needed for mining and processing have been obtained or that other
legal issues have been completely resolved. However, for reserves to exist,
there should not be any significant uncertainty concerning issuance of these
permits or resolution of legal issues.
</FONT>
<P align="left"><FONT size="2">The term &#147;proven reserves&#148; means reserves for which (a)&nbsp;quantity is computed
from dimensions revealed in outcrops, trenches, workings or drill holes; grade
and/or quality are computed from the results of detailed
</FONT>
<P align="center"><FONT size="2">36</FONT>
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<P align="left"><FONT size="2">sampling; and (b)&nbsp;the sites for inspection, sampling and measurement are spaced
so closely and the geologic character is so well defined that size, shape,
depth and mineral content of reserves are well established.
</FONT>
<P align="left"><FONT size="2">The term &#147;probable reserves&#148; means reserves for which quantity and grade and/or
quality are computed from information similar to that used for proven reserves,
but the sites for inspection, sampling and measurement are farther apart or are
otherwise less adequately spaced. The degree of assurance, although lower than
that for proven reserves, is high enough to assume continuity between points of
observation.
</FONT>
<P align="left"><FONT size="2">Reserve tonnages were depleted during 2002 by mining activity. Reserves quoted
are those remaining below the mining surface at December&nbsp;31, 2002, within a
revised ultimate pit design, based on the October 2002 revised resource model.
</FONT>
<P align="left"><FONT size="2">Stockpiled ore comprises mined ore above cut-off grade on the stockpiles, as of
December&nbsp;31, 2002.
</FONT>
<P align="left"><FONT size="2">Cutoff grade for reserve calculations is fixed at 1.6g Au/t for the first 6.5
years of mining operations (until end 2003), increasing to 1.7g Au/t for the
remaining mine life. The initial lower cut-off is required under the Mining
Development Contract with the state of PNG.
</FONT>
<P align="left"><FONT size="2">The reserves reflect an assumed gold price of US$305 per ounce. The number of
ounces of contained gold does not indicate the number of ounces that ultimately
will be recovered. The number of ounces ultimately recovered and available for
sale will depend upon, among other things, mining efficiency and processing
efficiency. The current estimate is for an eventual recovery of 14.9&nbsp;million
ounces of gold from the 16.7&nbsp;million contained ounces.
</FONT>
<P align="left"><FONT size="2">While Lihir believes that US$305 is an appropriate gold price to use to
estimate its reserves, the company has estimated that, if the assumed long-term
gold price was reduced to US$285 per ounce, its proved and probable gold
reserves would reduced to 14.2&nbsp;million ounces. Conversely, a metal price of
US$325 per ounce would increase the reserve to 17.7m ounces of contained gold.
</FONT>
<P align="left"><FONT size="2">As of May&nbsp;31, 2003, the spot price for gold was approximately US$361 per ounce.
At the end of 2002 the company had a total of 2,180,101 ounces of gold hedged
at an average price of US$330 per ounce. If there is a further deterioration
in the long term gold price, net earnings and the carrying value of mine
properties would be adversely impacted.
</FONT>
<P align="left"><FONT size="2">The PNG Government froze the phasing out of the Mining Levy in the budget in
December 2002. Positive discussions are underway with the Government to review
this decision. Should the Government decide to retain the level proposed in
the budget for the life of the operation, it would reduce reserves by 1.9
million ounces. This reduction is not included in the 2002 reserves update.
</FONT>
<P align="left"><FONT size="2"><B>Mining Rights</B>
</FONT>

<P align="left"><FONT size="2">Lihir holds the Special Mining Lease which gives the exclusive right to mine
and produce gold from the area of the Luise Caldera, including the site of the
processing plant on Putput Point. The Special Mining Lease is governed by the
Mining Development Contract. The Special Mining Lease can be terminated only if
the Mining Development Contract is properly terminated. For a discussion of
applicable PNG mining laws and the specific terms and conditions of the Special
Mining Lease, Exploration License and Mining Development Contract, see
&#147;Additional Information &#150; Material Contracts &#150; PNG Mining Laws and Related
Agreements with PNG Government&#148;.
</FONT>
<P align="center"><FONT size="2">37</FONT>
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<P align="left"><FONT size="2">Under the PNG Mining Act 1992, a developer may apply for a lease for mining
purposes, or LMP, to cover ancillary areas required to support a mining
operation. A mining lease is required for any quarrying operations outside the
Special Mining Lease. Lihir has been granted two leases for mining purposes,
one which covers the accommodation and commercial center, the Londolovit
reservoir and the Lakunbut dam and the other which covers the airstrip. The
company has also been granted two mining leases for a hard rock quarry and
limestone quarry. These leases are joined by three mining easements that
provide corridors for road access and power line and water supply.
</FONT>
<P align="left"><FONT size="2">The Special Mining Lease covers 1,739 hectares and includes the Luise Caldera,
Luise Harbor and part of Putput Point. As such, it covers the ore bodies,
processing plant, stockpiles and marine facilities. The LMP for the
accommodation and commercial center covers 644 hectares in the Londolovit area
and the LMP for the airstrip covers 34 hectares. The mining lease for the
limestone quarry covers 48.2 hectares while the mining lease for the hard rock
quarry covers 23.7 hectares.
</FONT>
<P align="left"><FONT size="2"><B>Exploration</B>
</FONT>

<P align="left"><FONT size="2">The area covered by the Special Mining Lease continues to have significant
potential for increasing reserves.
</FONT>
<P align="left"><FONT size="2">During 2002 drilling within the Luise Caldera was undertaken within the planned
pit and on a number of extension targets. 122 diamond holes for 40,910 metres
were completed. Targets drilled were western Lienetz and Kapit zones, the
western flank of Minifie, and the Lienetz /Coastal area.
</FONT>
<P align="left"><FONT size="2">Drilling in the Lienetz area was targeted to extend known resources in this
deposit. Step out drilling in NW Lienetz was successful in locating extensions
of &#145;boiling zone&#146; mineralisation and in the discovery of new feeder zones
outside of the previous resource, which resulted in extensions of the economic
pit on this flank of the deposit.
</FONT>
<P align="left"><FONT size="2">Drilling results available to end October 2002 were included in a re-estimate
of resources completed in December 2002. In December 2002, a full review of the
mining and processing costs was carried out, which together with the revised
resource estimate was used to re-optimize and design the mine pit and life of
mine schedule, resulting in an increase of remaining reserves by 15% to 16.7
Moz.
</FONT>
<P align="left"><FONT size="2">The revised mine design has extended the mine design crest in the NW Lienetz
area by 200m. Increases to reserve tonnage also occurred within the previous
reserve pit through the discovery of lateral extensions to the previously known
resource.
</FONT>
<P align="left"><FONT size="2">Substantial mid depth resource outside of the revised pit (and restated
reserves) was identified in 2001 adjacent to the coastal seawall pillar in
northern Lienetz. Additional holes drilled in 2002 confirmed this
mineralisation, though this resource has yet to be evaluated in engineering
studies. These planned studies will determine what proportion may be
recoverable to reserves through extension of the mine design and construction
of sea retaining structures.
</FONT>
<P align="left"><FONT size="2">Development drilling of the Lienetz ore body is still progressing in order to
define the limits to the west and north of the deposit, which remain open.
Further significant extensions of mineralisation were located during 2002
linking Lienetz and Kapit, as well as high-grade extensions to the Kapit
mineralisation. These two areas have been targeted for extensive drill
definition and mine feasibility studies during 2003, to determine their
availability for inclusion as additional reserves for the project
</FONT>
<P align="center"><FONT size="2">38</FONT>
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<P align="left"><FONT size="2">Drilling is also progressing in the West Minifie area, with 10 holes completed
in 2002 around the current pit limits. Results have been moderate only, but
require close out with additional holes scheduled for late 2003.
</FONT>
<P align="left"><FONT size="2">Five diamond drill rigs are currently active in infill and development drilling
in these areas, with drilling activities scheduled to continue throughout 2003
</FONT>
<P align="left"><FONT size="2">The area outside the Special Mining Lease, covered by Exploration Licence No
485 (EL485) is considered prospective for gold mineralization. EL 485 is
current until April 2004 when it will be available for renewed for a further 2
year period.
</FONT>
<P align="left"><FONT size="2">The exploration program on the lease involves mapping, stream sediment sampling
and weathered bedrock sampling using Wacker percussion drilling. Field
exploration during 2002 within EL485 concentrated on the Lamboar area on the
western side of the island. As at this reporting date, assay results for the
2002 program are yet to be received from the Australian based laboratory where
they are being analysed.
</FONT>
<P align="left"><FONT size="2">A total of 1387 geochemistry samples have been submitted from the program,
including; 774 wacker drill bedrock samples, 390 channel cut samples, 29 BLEG
samples, 4 rock chip samples, 95 panned concentrate samples and 95 stream
sediment samples. Late in 2002, work commenced in the adjacent Samo area,
where efforts will focus in 2003.
</FONT>
<P align="left"><FONT size="2"><B>Environmental Considerations</B>
</FONT>

<P align="left"><FONT size="2"><B><I>Overview</I></B>
</FONT>
<P align="left"><FONT size="2">Lihir considers that excellence in managing its environmental responsibilities
is not only inherently worthwhile but also essential to its long-term success.
</FONT>
<P align="left"><FONT size="2">The company operates in accordance with an environmental plan approved by the
PNG Government and works closely with the government in implementing all
statutory monitoring and reporting as specified in its environmental monitoring
and management program, or EMMP, and all water use permits in operation for the
site. The EMMP details the regular monitoring which is undertaken by Lihir at
over 50 locations around the Lihir island group for over 50 environmental
parameters. All results from environmental monitoring are reported to the
government and landowners on a quarterly basis.
</FONT>
<P align="left"><FONT size="2">During 2000 the EMMP was thoroughly revised and updated to reflect the current
operating conditions of the mine as well as to take into account all the
monitoring and research activities initiated by the company. The company has
also been consulted by the PNG Government in its development of the new
Environment Act for Papua New Guinea. The Environment Act was passed by
Parliament in December 2000 and combines the three previous acts relating to
environmental legislation into one act. The company are now actively
consulting and cooperating fully with the government in the development of the
new regulations which support the Environment Act which are expected to be
completed in 2002/03.
</FONT>
<P align="left"><FONT size="2">Lihir has independent environmental consultants report on its environmental
compliance. In addition, the Government carry out their own independent
monitoring for elements contained in the EMMP to confirm LMC&#146;s results. The
Statement of Compliance issued by the Government in 2001 states that &#147;The
Department of Environment and Conservation is satisfied with the environmental
performance of the Company and is happy to
</FONT>
<P align="center"><FONT size="2">39</FONT>
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<P align="left"><FONT size="2">state that Lihir Gold Limited has met, and continues to meet, all conditions of
its environmental monitoring programs, and that the impacts of its operation
are well within what was originally predicted in the Environmental Plan&#148;. In
addition to external consultant audits, the company complies with stringent
corporate reporting requirements through Rio Tinto.
</FONT>
<P align="left"><FONT size="2">In addition to the statutory environmental compliance monitoring and reporting
through the EMMP, the company undertakes studies to improve understanding of
the environmental consequences of the operation. Currently the company is
involved in research projects with CSIRO Division of Marine Science, James Cook
University, Australian Institute of Marine Science, Deakin University and NSR
Environmental Consultants. As part of these ongoing research projects, three
students are working towards Ph.D. degrees. While the company&#146;s monitoring and
research projects are continuing, results from the investigations suggest that
the level of contaminants and impacts originating from the company&#146;s activities
are less than originally predicted. In line with the predictions made in the
environmental plan, sedimentation on the fringing coral reef system peaked
during the construction phase of the project due to increased disturbance from
pre-mine clearing and road construction. During operations reef sedimentation
has decreased significantly to be much lower than forecast and, at many
locations, is now approaching levels similar to that measured during the
baseline studies before construction commenced.
</FONT>
<P align="left"><FONT size="2">LMC have completed a pre-certification audit of its Environmental Management
System against ISO14001 standards during 2002 by QAS (Quality Assurance
Services) in Australia and are expecting a full compliance audit in 2003.
</FONT>
<P align="left"><FONT size="2"><B><I>Environmental Plan</I></B>
</FONT>
<P align="left"><FONT size="2">Kennecott, with the assistance of NSR Environmental Consultants Pty Ltd.,
carried out extensive environmental baseline studies of the Lihir Islands and
the Lihirian community during exploration. These baseline studies were
followed by an environmental impact assessment of the Lihir operation, which
highlighted key environmental issues considered during project planning in an
attempt to minimize project-related environmental impacts. The environmental
impact assessment determined that the sensitive environmental variables most
likely to be impacted by the project included: the loss of nesting habitat for
megapodes (a local fowl valued for its eggs), sago and other economic tree
removal, diversion and alteration of stream habitat, and the effects of
sedimentation on the shallow and deep water marine environment around Luise
Harbor. Each of these impacts are summarized below; however, in summary,
ongoing environmental monitoring performed by the company (and independently by
the PNG Government) reveals that impacts to date are less than that anticipated
in the project&#146;s environmental plan.
</FONT>
<P align="left"><FONT size="2">Following its environmental impact assessment the environmental plan was
prepared by NSR on behalf of the joint venture and submitted to the State in
accordance with Section&nbsp;4(6) of the PNG Environmental Planning Act. The
environmental plan was subsequently approved by the State. The environmental
plan describes the proposed development, existing environment, anticipated
impacts and proposed safeguards, and EMMP for the construction and operational
phases of the mines development.
</FONT>
<P align="left"><FONT size="2">In the Mining Development Contract, the company has agreed to comply in all
material respects with its environmental plan. The environmental plan may be
varied either by the company, with State approval, or by the PNG Minister for
Environment and Conservation if there is a material danger to public health and
safety or if the conduct of normal operations in accordance with the
environmental plan poses an environmental impact either not contemplated or
different than contemplated in the environmental plan or if substantially
better environmental control technology becomes available.
</FONT>
<P align="center"><FONT size="2">40</FONT>
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<P align="left"><FONT size="2"><B><I>Land and Habitat Impacts</I></B>
</FONT>
<P align="left"><FONT size="2">The major land and habitat impacts associated with the Lihir operation are the
alteration of land use in and around the mine and plant site areas from natural
environment to mining lands and the loss of habitat types important to local
inhabitants. However, a compensation package was negotiated and accepted among
the company, the State and landowners that addresses these environmental
impacts, including the loss of megapode nesting habitat and economically
valuable vegetation, diversion and alteration of stream habitat and impacts by
sedimentation on the water quality of the shallow and deep water marine
environment around Luise Harbor, among other land use issues.
</FONT>
<P align="left"><FONT size="2">Geothermal areas of the Luise Caldera are important nesting grounds for a
sub-species of megapode. This sub-species is not unique to the Lihir Group of
islands and is genetically and morphologically similar to the populations found
on other nearby islands. It is important to Lihir Island primarily because the
local inhabitants use its eggs as a food source. Though significant areas of
nesting habitat in the caldera area have been lost, detailed surveys in 1997
-2001 found that nesting burrow numbers have significantly increased in
undisturbed areas and also that new nesting areas have been colonized. This is
attributed to a reduction in the predation pressure on the megapodes by the
local community in response to increased standard of living with less reliance
on traditional food resources afforded by the mine development.
</FONT>
<P align="left"><FONT size="2">Similarly, repeat post-baseline surveys of sago resources along the east and
north-east coast of Lihir Island show that while some sago areas have been lost
to road and infrastructure construction, the overall numbers of sago have
increased. As with megapodes, this is believed to be the result of a reduction
in the requirement for traditional food and building resources since the
establishment of the mine.
</FONT>
<P align="left"><FONT size="2"><B><I>Waste Rock and Marine Impacts</I></B>
</FONT>
<P align="left"><FONT size="2">Given the potential for acid generation from certain waste rock types,
permanent submarine disposal is Lihir&#146;s preferred method for long-term
prevention of sulfide oxidation and subsequent acid generation. In addition,
the lack of available land for terrestrial disposal also supports the marine
placement of waste rock. The major impacts of the deep-water waste rock
disposal are increased turbidity in the water column within and beyond Luise
Harbor (which declines along the north and south coast) and smothering of deep
seafloor benthos.
</FONT>
<P align="left"><FONT size="2">The increased turbidity from the barge dumping and storm-water runoff from
disturbed areas also results in the sedimentation of the narrow fringing reef
along the east coast of Lihir Island. Impact assessments have taken into
account the cumulative effects of turbid storm-water as well as ocean
sedimentation from turbidity created by these sources of sediment. The
diversity of coral species and fish in these areas is likely to be reduced as a
result of this sedimentation.
</FONT>
<P align="left"><FONT size="2">While near-shore coral reef sedimentation was predicted to be a major impact in
the project&#146;s environmental plan, monitoring data to date suggest that habitat
loss for deep marine benthos is the greater impact. While turbidity levels in
within Luise Harbor have increased, monitoring data suggest that there are
natural controls on the amount of the sediment from the turbid harbor plumes
which cause coral reef sedimentation.
</FONT>
<P align="left"><FONT size="2">In 2002 the company voluntarily commenced a program to further improve its
management of water, sediment and ARD leachate from stockpile drainage entering
the ocean. The 3&nbsp;year program is expected to cost approximately US$5&nbsp;million.
</FONT>

<P align="center"><FONT size="2">41</FONT>




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<P align="left"><FONT size="2">Following the cessation of waste rock disposal, coral and deep-sea benthos
habitat recovery is expected to occur. Deep sea monitoring of tailing and
waste rock deposition zones has already indicated recolonisation of deep sea
benthos into mine impacted areas. The installation of sediment retention dams
and the planned re-engineering of silt curtains are of continuing benefit in
this regard and the company is actively involved in attempting to further
reduce near-shore sedimentation where applicable. The environmental
consultants to the project, NSR, estimated in April 1992 that, based on
experience at other coral reef systems, recovery can be expected after about 25
years. This opinion has been expressed taking into account the good substrate
conditions existing and the predominant presence of fast growing acroporan
corals.
</FONT>
<P align="left"><em><FONT size="2"><B>Stream Impacts</B> </FONT> </em>
<P align="left"><FONT size="2">Effects relating to pumping of water from the Londolovit River have been
specifically addressed by the preparation of a management plan for the lower
reaches of that river (the Lower Londolovit River Management Plan). This
included the construction of a barrage to maintain river levels and reduce the
intrusion of salt water up the Londolovit River and provision for water release
from the pump weir in order to maintain minimum base flow requirements and
thereby minimize any ecological effects on the lower reaches of the Londolovit
River and its floodplain. To date, the systems in place have adequately
achieved their objectives.
</FONT>
<P align="left"><em><FONT size="2"><B>Stockpile Drainage</B> </FONT> </em>
<P align="left"><FONT size="2">The environmental plan suggested that drainage from the low grade ore
stockpiles may cause low pH runoff and elevated levels of iron, copper,
arsenic, zinc, aluminum, manganese, cadmium, lead and, possibly, mercury and
chromium. NSR predicted that the chemical effects of mine drainage waters
(including stockpile drainage) on Luise Harbor are expected to be subordinate
to the turbidity (sediment)&nbsp;and thermal effects, although they recognize that
it was not possible to predict the expected water quality with great certainty.
Nevertheless, the company has installed stockpile covers to reduce the
generation of low pH, high dissolved metal leachate from the stockpile area.
</FONT>
<P align="left"><FONT size="2">The discharge of low pH run-off water from other areas is mitigated prior to
entering the ocean by dilution with large amounts of water from the pit
dewatering bore field which has a high alkalinity and therefore buffers of acid
leachate run-off and the company are currently evaluating further treatment
options to assist in leachate mitigation.
</FONT>
<P align="left"><FONT size="2">The company monitors the quality of run-off water entering the sea and, to
date, the range in data obtained is not significantly different in terms of
acid compared to baseline values emanating from the geothermal areas through
which the water drains before entering the ocean. If environmental impacts are
greater than currently estimated, the State has the right to impose additional
water quality control measures. The potential costs of implementing such
additional control measures cannot be estimated at the present time, but in the
opinion of both Micon and the company they should not be so large as to impair
the economic viability of the Lihir operation.
</FONT>
<P align="left"><em><FONT size="2"><B>Tailings Disposal</B> </FONT> </em>
<P align="left"><FONT size="2">The reliance of the Lihirian communities on coastal lands means that a
land-based tailings storage facility would need to be situated in the interior
mountainous area of the island. Given the seismic conditions, the rugged
topography, high rainfall and potential for acid generation, the cost and risks
to the environment and people of constructing a stable land storage facility
there for tailings were considered prohibitive. In addition, due to the net
</FONT>
<P align="center"><FONT size="2">42</FONT>
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<P align="left"><FONT size="2">rainfall surplus, storage of tailings on Lihir Island was not likely to be
possible without long term treatment of the
effluent run-off water from the land storage facility, the residues from which
could also require land-based storage. For these reasons, the company and the
PNG Government concluded that submarine disposal of tailings was appropriate
for the Lihir operation.
</FONT>
<P align="left"><FONT size="2">Tailings are discharged underwater at a depth of 128 meters through a 1.2 meter
diameter steel-cased high density polyethylene (HDPE)&nbsp;pipeline. The discharge
depth was chosen following extensive field-work on the structure and currents
of the ocean in the vicinity of the outfall leading to the development of a
predictive model of tailing behavior once discharged. The discharge point at
128 m is below the mix layer depth, the euphotic (biologically active) zone and
where the density of the receiving ocean water precludes the tailings being
resuspended back into the surface water. The tailing is a combined stream of
approximately 5% solids and a mixture of fresh and salt process water and
saltwater used in the cooling of the power and oxygen plants. The water
quality around the area of the outfall is monitored on a regular basis to
ensure that concentrations of metals and cyanide species are not above PNG
water quality criteria for protection of marine ecosystems. Monitoring data to
date show that, at all times, water quality at marine compliance locations have
been below the prescribed standards.
</FONT>
<P align="left"><FONT size="2">In addition, the company (in consultation with the PNG Government, CSIRO Centre
for Advanced Analytical Chemistry, NSR, Ocean Sciences Institute and Underwater
Video Systems) has carried out extensive validation studies of the behavior of
the tailing once it leaves the end of the pipe and is discharged to the ocean.
These studies have shown that the tailings travel down the steep submarine
slope after discharge from the end of the pipe as a consolidated turbidity
current and settle out on the ocean floor. Only small amounts of the main
turbidity flow break off to form sub-surface plumes below 150 m and no
re-suspension to waters above 128 m was observed.
</FONT>
<P align="left"><FONT size="2">Submarine disposal of tailings is only appropriate under certain geographical
and physical conditions including suitable ocean currents, absence of
upwelling, steep slopes and deep surrounding ocean, all of which occur at
Lihir. It is or has been practiced at 9 locations around the world and is
being investigated at a further 22 mineral prospects. According to information
published by the U.S. Bureau of Mines in October 1993, there is no known
juxtaposition of potentially economic mineralization and suitable oceanic
conditions within the contiguous mainland states of the United States which
would make submarine disposal of mine tailing a viable consideration. The
international concern regarding marine tailings disposal is based on the
perception that it could lead to major metal contamination. Most mining project
tailings solids are stored in engineered containments, but, as noted above,
land based storage is not deemed feasible on Lihir Island. Marine benthic
species colonizing stabilized waste rock or tailings deposits may be exposed to
elevated metals concentrations in the sediments. Tissue metal enrichment may
then occur and may be transferred to predatory fish. The degree to which this
will occur cannot be predicted with certainty but a monitoring program has been
put into place to evaluate this possibility. Ongoing monitoring by the company
and external consultants of both benthic invertebrates and shallow and deep
water fish show no elevation of metals in test organisms. There is no
exploitation of deep water fisheries for subsistence or commercial purposes in
the area of Lihir Island.
</FONT>
<P align="left"><FONT size="2">At least 90% of the residual cyanide contained in CIL tailings is detoxified by
reaction with iron prior to disposal. Cyanide detoxification is achieved by
controlled mixing of iron-rich CCD liquor with CIL effluent to complex the free
cyanide. A mixing tank allows sufficient retention time for the reactions to
proceed and the tailings disposal is managed to ensure State water quality
standards are met. No other treatment of tailings prior to disposal takes
place at the Lihir operation.
</FONT>
<P align="left"><FONT size="2">Risk analyses were performed by Parametrix Inc. in 1993 and 1995 with respect
to residual free cyanide and copper discharge with the tailings and the CCD
wash liquors, and it was found that neither posed a risk to human health or
safety. Copper could be toxic to some marine organisms (assuming similarity to
U.S. species used in laboratory toxicity tests) at depths greater than 150
meters within the mixing zone, and could be toxic to some
</FONT>
<P align="center"><FONT size="2">43</FONT>
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<P align="left"><FONT size="2">zooplankton and
bivalves beyond the mixing zone, if such organisms were to be resident at these
depths. Even if bioavailable, copper will not biomagnify within the food
chain. It was concluded that fish in the area would be safe to eat by local
people, other fish and wildlife.
</FONT>
<P align="left"><FONT size="2">Parametrix Inc concluded in a report dated February 1995 that a contaminant
pathway between the people of Lihir Island and the deep ocean benthos is
unlikely based on the available human dietary information, the feeding habits
of the only deep ocean organisms consumed by the islanders, and the absence of
a commercial deep ocean fishery within the vicinity of the disposal site. The
smothering of the sea floor and the benthos that live there could cause fish
(if any) at depth to leave the area of tailings disposal in search of food.
However, fish are expected to avoid this area in any event during the
operations phase due to the increased turbidity of the water. In Micon&#146;s view,
these impacts, even in the worst case, will be temporary and limited to the
area of tailings disposal, and only deep-water organisms are expected to be
affected. As a result, compensation or other actions are not anticipated.
Upon completion of tailings disposal, the impact of smothering will be reduced
or cease. It is expected that eventually benthos will return to the area of
tailings disposal and, as the food source returns, so too will its predators.
</FONT>
<P align="left"><FONT size="2">Upon completion of tailings disposal activities, most impacts to the
environment are expected to cease. There may be the potential for
bioaccumulation of metals within the marine ecosystem over time. The potential
for bioaccumulation of metals (if any) was not assessed in the environmental
plan. The company has initiated a program of monitoring the metal content
benthic sediments, sea-grass, fish and shellfish. This monitoring program is
expected to provide an early indication of increases in metal content in the
upper food chain, and if a significant increase in metal content develops,
mitigation strategies and compensation will be considered.
</FONT>
<P align="left"><FONT size="2">A spill of untreated and undiluted tailings close to the ocean could have a
severe environmental impact and significant clean up costs. Due to the
sediment load and chemical composition of the pre-diluted tailings and the
waste water streams, any uncontrolled spill is likely to pose a threat to the
aquatic life in the shallow waters in the area of the spill. The magnitude and
extent of the environmental impact of an accidental spill will depend upon the
composition of the waste stream and the total volume released. If an
accidental spill occurs, the major cost involved would be the clean up of
tailings on land or dredging of any tailings which entered the harbor and which
would be amenable to clean up. Equipment and materials are likely to be
available on site for such a clean up and the major cost would be labor.
However, to safeguard against such a hazard the company has adopted Micon&#146;s
recommendation of installing secondary containment of the land section of the
tailings discharge line.
</FONT>
<P align="left"><FONT size="2">Liability for seepage, pollution or contamination from a spill of untreated and
undiluted tailings should be covered by the third party insurance policy
arranged by the company if it is a &#147;sudden, unintended and unexpected
happening&#148;; provided, however<I>, </I>that the insured amount under the policy is
limited to US$250&nbsp;million for any one occurrence. See &#147;Insurance&#148; below.
</FONT>
<P align="left"><FONT size="2"><B>Rehabilitation and Decommissioning</B>
</FONT>

<P align="left"><FONT size="2">The approval of the environmental plan required the company to undertake
rehabilitation on a progressive basis. As with all environmental monitoring
reporting requirements, rehabilitation activities are reported to the State on
a quarterly basis.
</FONT>
<P align="left"><FONT size="2">The company has also prepared a conceptual mine closure plan, or CMCP, which
details the company&#146;s options with respect to mine closure as well as assigning
costs associated with various closure options. These costs will be accrued
during the operation of the project to ensure that adequate financial resources
are available for closure and decommissioning at the cessation of mining. The
various closure options identified in the CMCP will be reviewed over a
five-year period to address such issues as a final void study of the pit as
well as allowing for
</FONT>
<P align="center"><FONT size="2">44</FONT>
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<P align="left"><FONT size="2">comprehensive community consultation. This will be
developed by the end of 2004. The major areas of concern with regard to
rehabilitation at closure are the open pit area, and low-grade ore platform and
stockpiles, which may be acid-generating. Closure costs are estimated at
approximately US$27&nbsp;million undiscounted for the various options identified.
</FONT>
<P align="left"><em><FONT size="2"><B>Seismic Considerations</B> </FONT> </em>
<P align="left"><FONT size="2">Lihir Island is located in a region of moderate seismic activity. However,
because regions of intense seismic activity occur approximately 90 and 200
kilometers to the south, a seismic hazard study was undertaken by Dames &#038; Moore
commencing in 1987 in co-operation with Kennecott geotechnical staff. This
study was updated in February 1992 , and a further review undertaken in 2000 .
</FONT>
<P align="left"><FONT size="2">To evaluate the seismic environment of Lihir Island, an examination was
undertaken of the regional earthquake setting of PNG and the Solomon Islands.
A mathematical model was developed to estimate the probability and
characteristics of earthquakes at Lihir Island. This model has subsequently
been modified and updated to incorporate the more than 1,640 earthquakes of
magnitude 5 or greater which have occurred within 200 km of the site since the
original 1987 study was completed.
</FONT>
<P align="left"><FONT size="2">The results of the seismic hazard study were used to develop earthquake design
criteria for structural design and earth pressures for retaining wall design,
liquefaction assessments, dynamic slope stability and assessment of tsunami
threat and extreme ocean water levels. These earthquake design criteria were
adopted for design purposes throughout the Lihir operation. The reviewed study
(2000)&nbsp;substantially confirms the suitability of the original criteria, and has
been adopted as the basis of all ongoing structural design at Lihir.
</FONT>
<P align="left"><FONT size="2">No seismic events causing significant damage or extended disruption to
operations has been experienced to date.
</FONT>
<P align="left"><FONT size="2"><B>Insurance</B>
</FONT>

<P align="left"><FONT size="2">Lihir&#146;s previous material damage and business interruption and combined
liability insurance policies were replaced effective July&nbsp;1, 2000 with new
coverage obtained under the Rio Tinto Group Risk Management program.
Substantial savings in premia and improvements in insured terms were achieved.
In addition to these policies, the company has arranged insurance covering
marine terminal operator&#146;s liability; charterer&#146;s liability; medical
malpractice; employee dishonesty and crime; airport operator liability; and
workers compensation liability.
</FONT>
<P align="left"><FONT size="2">A submission for exemption from the normal onshore placement rules was approved
by the Papua New Guinea Insurance Commissioner in July 2000.
</FONT>
<P align="left"><FONT size="2">While the company has obtained, and pays for, political risk insurance in favor
of its lenders covering 100% of the borrowings under the syndicated facility
agreement and is required by that agreement to maintain such insurance policies
as a condition to, and for the full term of, those borrowings, the company does
not receive any benefit from any payments under such policies because in the
event of any such payment the insurers will become subrogated to the rights of
the banks against the company in respect of that payment. No political risk
insurance has been, or is currently proposed to be, arranged for the benefit of
the company. See &#147;Additional Information &#150; Material Contracts &#151; Financing
Agreements&#148;.
</FONT>
<P align="center"><FONT size="2">45</FONT>

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<P align="left"><FONT size="2"><B>Security</B>
</FONT>

<P align="left"><FONT size="2">Security service contracts were re-tendered and won by Niolam Security and Task
Security. The security of the gold room was taken back under direct LMC
control. Security provision continue to encompass the mine site, commercial
area, camps and housing estate, plant and airport areas.
</FONT>
<P align="left"><FONT size="2">The company has supported the establishment by the community on Lihir of a
Peace and Good Order Committee. This committee has liaised closely with the
PNG Police Force. Several initiatives on Community Policing such as education
campaigns on illicit drugs, alcohol abuse and domestic violence have been
initiated. Police numbers on Lihir have also increased during the year at
the request of the Committee. A resident magistrate has also been stationed on
Lihir allowing for the hearing of criminal and civil matters without long
delays.
</FONT>
<P align="left"><FONT size="2">Project security provisions encompass the plant, mine site, commercial area,
housing estate, camps, hospital, airport and infrastructure. Two joint venture
companies, Securimax Islands and Task Security provide fully equipped contract
security personnel. These personnel are managed by Lihir Management Company
security supervisors, who report to the Occupational Health Safety &#038; Security
Superintendent.
</FONT>
<P align="left"><FONT size="2">A police station and cell block were completed and handed over to the Royal PNG
Constabulary in late 1997. The company also provides government housing and
other support to the Lihir police contingent. External police support can be
mobilised from Kavieng or Rabaul if and when required. A reserve police force
consisting of volunteers has also been established on Lihir Island, under the
control of the local Royal PNG Constabulary on Lihir Island, providing further
assistance as and when required.
</FONT>
<P align="center"><FONT size="2">46</FONT>
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<!-- link1 "Item&nbsp;5. Operating and Financial Review and Prospects" -->
<DIV align="left"><A NAME="014"></A></DIV>
<P align="left"><FONT size="2"><B>Item&nbsp;5. Operating and Financial Review and Prospects</B>
</FONT>

<!-- link3 "A.&nbsp;Operating Results" -->
<DIV align="left"><A NAME="015"></A></DIV>
<P align="left"><FONT size="2"><I><b>A. Operating Results</b></I>
</FONT>

<P align="left"><FONT size="2"><b>Introduction</b>
</FONT>

<P align="left"><FONT size="2">This section provides an analysis of Lihir&#146;s business and compares its 2002
financial results with those of the previous two years. It should be read in
conjunction with the audited consolidated financial statements and related
notes at Item&nbsp;18 of this report.
</FONT>
<P align="left"><FONT size="2">The basis of preparation of the financial statements is set out in Note 1 of
the financial statements. These accounting policies vary in certain important
respects from the accounting principles generally accepted in the United States
(US GAAP). The material differences affecting the profit and loss account and
shareholders&#146; equity between generally accepted accounting principles followed
by Lihir and those generally accepted in the US are summarized in Note 29 of
the financial statements.
</FONT>
<P align="left"><FONT size="2"><B>Critical Accounting Policies</B>
</FONT>

<P align="left"><FONT size="2">The preparation of Lihir&#146;s financial statements in accordance with generally
accepted accounting principles, is based on management estimates and
assumptions, which may have a material impact on the carrying values of assets
and liabilities recorded and their impact on the income statement. Some of
the more significant issues requiring the use of management estimates and
assumptions include estimates of proven and probable ore reserves, rate of gold
recovery, future gold price assumptions and environmental, reclamation and
closure costs. Such estimates and assumptions will have an impact on:
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">carrying value of Lihir&#146;s non-current assets (IAS 36 &#147;Impairment of
Assets&#148; and IAS 4 &#147;Depreciation Accounting&#148;)</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>Mine properties</B></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Mine properties represent the accumulation of all development expenditures
incurred by or on behalf of the Group in relation to areas of interest in
which mining of a mineral resource has commenced.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">When future economic benefits are established by further development
expenditure in respect of a mine property after the commencement of
production, such expenditure is carried forward as part of the cost of that
mine property. Otherwise such expenditure is classified as part of the
cost of production.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Amortisation of costs is provided for using the units-of-production method,
separate calculations being made for each mineral resource. The
units-of-production basis results in an amortisation charge proportional to
the depletion of estimated recoverable gold ounces contained in proved and
probable ore reserves.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Where a change in estimated recoverable gold ounces contained in proved and
probable ore reserves is made, depreciation and amortisation of mine
properties is accounted for prospectively in the period of change and
future periods.</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">47</FONT>
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<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>Mine buildings, plant and equipment:</B></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">The cost of each item of buildings, machinery and equipment is depreciated
over its expected useful life. For the majority of assets this is
accomplished using the units-of-production method based on estimated
recoverable gold ounces contained in proved and probable ore reserves,
although some assets are depreciated using a percentage based on time. Each
item&#146;s economic life has due regard to both physical life limitations and
to present assessments of economically recoverable reserves of the mine
property (where appropriate) and to possible future variations in those
assessments. Estimates of remaining useful lives are made on a regular
basis for all assets, with annual reassessments for major items.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">The total net carrying values of mine building, plant and equipment at each
mine property are reviewed regularly and, to the extent to which these
values exceed their recoverable amounts, that excess is fully provided
against in the financial year in which this is determined.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>Remaining mine life</B></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">In estimating the remaining life of the mine for the purpose of
amortisation and depreciation calculations, due regard is given, not only
to the amount of remaining recoverable gold ounces contained in proved and
probable ore reserves, but also to limitations which could arise from the
potential for changes in technology, demand, product substitution and other
issues which are inherently difficult to estimate over a lengthy time
frame.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>Impairment of assets</B></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Impairments of assets are recognised whenever the carrying amount of an
asset exceeds its recoverable value. The recoverable amount is measured as
the higher of net selling price and value in use. Value in use for
individual assets is calculated by discounting future cash flows using a
risk adjusted pre-tax discount rate.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">non-current liabilities (IAS 37 &#147;Provisions, Contingent Liabilities and
Contingent Assets&#148;)</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>Restoration, rehabilitation and environmental expenditure</B></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">In accordance with IAS 37 &#147;Provisions, Contingent Liabilities and
Contingent Assets&#148;, a provision is raised for anticipated expenditure to be
made on restoration and rehabilitation to be undertaken after mine closure.
These costs include the costs of dismantling and demolition of
infrastructure or decommissioning, the removal of residual material and the
remediation of disturbed areas. The provision is only raised in respect of
damage incurred up to balance date. The amount of any provision recognised
is the full amount that has been estimated based on current costs to be
required to settle present obligations, discounted using a pre-tax
risk-free interest rate of 2.5%. Estimates of future costs are reassessed
annually.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">A corresponding asset, which represents future economic benefits, is raised
and subsequently amortised using the units of production method.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">The Company&#146;s restoration, rehabilitation and environmental expenditure
policy identifies the environmental, social and engineering issues to be
considered and the procedures to be followed when providing for costs
associated with the site closure. Site rehabilitation and closure involves
the dismantling</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">48</FONT>
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<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">and demolition of infrastructure not intended for
subsequent community use, the removal of residual materials and the
remediation of disturbed areas. Community requirements and long-term land
use objectives are also taken into account.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">inventory valuation (IAS 2 &#147;Inventories&#148;)</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>Inventories</B></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Inventories of ore and metal are physically measured or estimated and
valued at the lower of cost and net realisable value.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Cost comprises direct material, direct labour and transportation
expenditure in getting such inventories to their existing location and
condition, together with an appropriate portion of fixed and variable
overhead expenditure and depreciation and amortisation, based on weighted
average costs incurred during the period in which such inventories are
produced. Net realisable value is the amount estimated to be obtained from
sale of the item of inventory in the normal course of business, less any
anticipated costs to be incurred prior to its sale.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Inventories of consumable supplies and spare parts expected to be used in
production are valued at the lower of weighted average cost, which includes
the cost of purchase as well as transportation and statutory charges, and
net realisable value.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">deferred tax position (IAS 12 &#147;Income Taxes&#148;)</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>Income tax</B></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Tax effect accounting procedures are followed using the liability method
for all temporary differences arising between the tax bases of assets and
liabilities and their carrying values for financial reporting purposes.
Income tax on temporary differences is set aside to the deferred tax
liability and deferred tax asset accounts at current enacted tax rates.
Deferred tax assets relating to deductible temporary differences and tax
losses are only carried forward as an asset to the extent that it is
probable that future taxable profit will be available against which the
deductible temporary differences and tax losses can be utilised.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Derivative financial instruments (IAS 39 &#147;Financial Instruments:
Recognition and Measurement&#148;)</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>Accounting for derivative financial instruments and hedging activities</B></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Derivative financial instruments are initially recognised in the balance
sheet at cost and are subsequently remeasured at their fair values. On the
date a derivative contract is entered into, the Group designates the
contract as a hedge against specific future production. The method of
recognising the resulting gain or loss is dependent on the nature of the
item being hedged.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Changes in the fair value of derivatives that are designated against future
production, qualify as cash flow hedges and are deemed highly effective,
are recognised in equity. Amounts deferred in equity are transferred to
the income statement and classified as revenue in the same periods during
which the hedged gold sales affect the income statement.</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">49</FONT>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Certain derivative instruments do not qualify for hedge accounting under
the specific rules in IAS 39. Changes in the fair value of any derivative
instruments that do not qualify for hedge accounting under IAS 39 are
recognised immediately in the income statement.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">When a hedging instrument expires or is sold, or when a hedge no longer
meets the criteria for hedge accounting under IAS 39, any cumulative gain
or loss existing in equity at that time remains in equity and is recognised
when the committed or forecasted production is ultimately recognised in the
income statement.
However, if the committed or forecasted production is no longer expected to
occur, the cumulative gain or loss reported in equity is immediately
transferred to the income statement.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">Although management reviews key estimates and assumptions on an ongoing basis,
no assurance can be given that the indicated amount of gold will be recovered
or at the rates estimated. Gold reserve estimates are expressions of judgment
based on knowledge, experience and industry practice, and may require revision
based on actual production experience. Estimates that are valid estimates when
made may change significantly when new information becomes available. Such
estimates are necessarily imprecise and depend to some extent on statistical
inferences, which may prove unreliable.
</FONT>
<P align="left"><FONT size="2">The following sections provide an overview of Lihir&#146;s results, financial
results of operations, impairment provisions, foreign currency fluctuations and
the impact of recently issued accounting standards. For discussion on Lihir&#146;s
reserves see &#147;Information on the Company &#150; Property, Plant and Equipment &#150;
Reserves Estimates&#148;.
</FONT>
<P align="left"><FONT size="2"><B>Overview</B>
</FONT>

<P align="left"><FONT size="2">Lihir made a profit from ordinary activities before tax of US$70&nbsp;million
compared with a profit of US$43&nbsp;million and a loss of US$99&nbsp;million in 2001 and
2000 respectively. Excluding the impairment of mine properties and deferred
mining costs as noted below, Lihir&#146;s before tax profit would have been US$32
million compared with US$43&nbsp;million and US$22&nbsp;million in 2001 and 2000
respectively. The 2000 impairment loss of US$99&nbsp;million against mine
properties and deferred mining costs (under IAS 36) was based on a gold price
assumption of US$300 per ounce and a real discount rate of 6%. The subsequent
reversal in 2003 of US$38m was based on a gold price assumption of US$305 per
ounce and a real discount rate of 7%. These transactions were non-cash in
nature.
</FONT>
<CENTER>
  <TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
    <TR valign="bottom">
      <TD width="71%">&nbsp;</TD>
      <TD width="5%">&nbsp;</TD>
      <TD width="1%">&nbsp;</TD>
      <TD width="1%">&nbsp;</TD>
      <TD width="1%">&nbsp;</TD>
      <TD width="5%">&nbsp;</TD>
      <TD width="1%">&nbsp;</TD>
      <TD width="1%">&nbsp;</TD>
      <TD width="1%">&nbsp;</TD>
      <TD width="5%">&nbsp;</TD>
      <TD width="1%">&nbsp;</TD>
      <TD width="1%">&nbsp;</TD>
      <TD width="1%">&nbsp;</TD>
    </TR>
    <TR valign="bottom">
      <TD><FONT size="1">&nbsp;</FONT></TD>
      <TD><FONT size="1">&nbsp;</FONT></TD>
      <TD nowrap align="center" colspan="11"><FONT size="1"><B>US$ millions</B></FONT></TD>
    </TR>
    <TR valign="bottom">
      <TD><FONT size="1">&nbsp;</FONT></TD>
      <TD><FONT size="1">&nbsp;</FONT></TD>
      <TD colspan="11"><HR size="1" noshade></TD>
    </TR>
    <TR valign="bottom">
      <TD><FONT size="1">&nbsp;</FONT></TD>
      <TD><FONT size="1">&nbsp;</FONT></TD>
      <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
      <TD><FONT size="1">&nbsp;</FONT></TD>
      <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
      <TD><FONT size="1">&nbsp;</FONT></TD>
      <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
    </TR>
    <TR valign="bottom">
      <TD><FONT size="1">&nbsp;</FONT></TD>
      <TD><FONT size="1">&nbsp;</FONT></TD>
      <TD colspan="3"><HR size="1" noshade></TD>
      <TD><FONT size="1">&nbsp;</FONT></TD>
      <TD colspan="3"><HR size="1" noshade></TD>
      <TD><FONT size="1">&nbsp;</FONT></TD>
      <TD colspan="3"><HR size="1" noshade></TD>
    </TR>
    <TR valign="bottom" bgcolor="#eeeeee">
      <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Sales
          revenue</FONT></DIV></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">213</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">233</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">227</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
    </TR>
    <TR>
      <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><HR size="1" noshade></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><HR size="1" noshade></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><HR size="1" noshade></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
    </TR>
    <TR valign="bottom">
      <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Profit
          / (loss)&nbsp;from ordinary activities before taxation</FONT></DIV></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">70</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">43</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">(99</FONT></TD>
      <TD nowrap><FONT size="2">)</FONT></TD>
    </TR>
    <TR valign="bottom" bgcolor="#eeeeee">
      <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Impairment
          of mine properties and deferred mining costs</FONT></DIV></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">(38</FONT></TD>
      <TD nowrap><FONT size="2">)</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">&#151;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">121</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
    </TR>
    <TR>
      <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><HR size="1" noshade></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><HR size="1" noshade></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><HR size="1" noshade></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
    </TR>
    <TR valign="bottom">
      <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Earnings
          before impairment</FONT></DIV></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">32</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">43</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">22</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
    </TR>
    <TR>
      <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><HR size="4" noshade></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><HR size="4" noshade></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><HR size="4" noshade></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
    </TR>
  </TABLE>
</CENTER>
<P align="left"><FONT size="2">Earnings Before Impairment is profit from ordinary activities before taxation,
less impairments of mining properties and deferred mining costs recognised. We
believe that Earnings Before Impairments provides a meaningful comparative
measure of earnings that many financial analysts and investors find
</FONT>
<P align="center"><FONT size="2">50</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="left"><FONT size="2">useful in
making comparisons between reporting periods. It is not to be confused as an
alternative to earnings as determined under US GAAP or International Accounting
Standards.
</FONT>
<P align="left"><FONT size="2"><B>Financial Results of Operations</B>
</FONT>

<P align="left"><FONT size="2"><I>Sales</I>
</FONT>

<P align="left"><FONT size="2">Lihir&#146;s revenues are determined primarily by the amount of gold it produces and
the prices it is able to realize upon sale of the gold. The company&#146;s realized
gold prices are determined primarily by the market price for gold and the terms
of any hedging transactions into which it enters.
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%">
<TR valign="bottom">
    <TD width="45%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
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    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
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    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Gold sales</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="center"><FONT size="2">Ounces 000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">593</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">648</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">612</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Average gold price realized*</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="center"><FONT size="2">US$/ounce</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">356</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">355</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">379</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P>
<HR size="1" width="18%" align="left" noshade>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">*</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Excluding the revaluation of financial instruments</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2"><B><I>Gold Prices </I></B>- There are many producers of gold worldwide and gold bullion can
be readily sold in numerous markets throughout the world. It is not difficult
to ascertain a market price for gold at any particular time. The company&#146;s
revenues are significantly influenced by the world market price for gold.
</FONT>
<P align="left"><FONT size="2">Historically, gold prices have fluctuated widely. In 2002 the company&#146;s
realized price per ounce was US$356 per ounce compared to US$355 and US$379 per
ounce in 2001 and 2000 respectively. Gold prices are affected by numerous
industry and macro-economic factors beyond the company&#146;s control, including
sales by central banks, the worldwide forces of supply and demand, inflation,
currency and interest rates and political and economic conditions. Gold prices
are also affected by worldwide gold production levels, which have increased in
recent years. In addition, the price of gold has on occasion been subject to
very rapid short-term changes because of speculative activities. See &#147;Key
Information &#151; Risk Factors&#148;.
</FONT>
<P align="left"><FONT size="2">The decline in the gold price since 1997 was reported to be for reasons that
include declining inflation in many countries worldwide. Further, in recent
years the central banks of several countries and multilateral organizations
such as the European Monetary Institute and the International Monetary Fund
have sold portions of gold held by them as reserves and may sell additional
amounts of gold in the future, which could result in further declines in the
market price of gold.
</FONT>
<P align="left"><FONT size="2">In 2002 the gold price rose above $300 per ounce, reaching a high of $US382 per
ounce in February 2003. This was attributed to various factors, including
rising tensions in the Middle East, global economic uncertainty and a falling
US$. Since reaching a high of US$382 / oz, the gold price has since declined
to levels around US$ 360 / oz at 31 May 2003.
</FONT>
<P align="left"><FONT size="2">If the market price of gold falls below Lihir&#146;s production costs and remains at
such a level for any sustained period, the company may experience losses and
determine that it is not economically feasible to continue
</FONT>
<P align="center"><FONT size="2">51</FONT>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="left"><FONT size="2">commercial
production with respect to some or all of its mining activities or to continue
development of the Lihir operation. The company will also have to assess the
economic impact of any sustained changes in gold prices on recoverability and,
therefore, cut-off grades and the level of its reserves, and the carrying value
of assets.
</FONT>
<P align="left"><FONT size="2"><B><I>Hedging </I></B><B>- </B>The company seeks to mitigate gold price risk, in part, through
hedging strategies. The policy of the company is to seek where appropriate to
protect operating costs and debt servicing through hedging activities. This may
include periodic purchases or sales of put or call options, spot deferred
sales, and forward sales covering a portion of its gold production at fixed
future prices. The company intends to regularly evaluate the portion of its
production that will be hedged. The company will not engage in speculative
transactions and does not intend to trade hedged positions.
</FONT>
<P align="left"><FONT size="2">The average realized prices in 2002, 2001 and 2000 represented premiums of 8 %,
33%, and 36%respectively over spot prices. These premiums contributed USS$30
million, US$58&nbsp;million and US$53&nbsp;million to pre-tax profits in these years.
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%">
<TR valign="bottom">
    <TD width="55%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Average gold price realized</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="center"><FONT size="2">US$/ounce</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">356</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">355</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">379</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Spot price</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="center"><FONT size="2">US$/ounce</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">310</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">271</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">279</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Hedging premium</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">33</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">36</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">Following the adoption of IAS39 in 2001, gains and losses arising from the
early closure of hedge structures prior to 2001 were transferred to equity, to
be recycled to income when the underlying transaction, against which the hedges
were initially designated, take place. In 2002, following an increase in the
gold price to above US$300 / ounce, approval was sought and obtained from the
syndicate lenders to vary the minimum hedge requirements under the syndicated
loan facility, enabling the hedgebook to be restructured to provide
shareholders with additional exposure to the spot price. This was achieved
through the deferral and re-designation of existing hedge positions against
longer dated production.
</FONT>
<P align="left"><FONT size="2">The net amount of gains losses, arising from early closure and redesignation of
hedge structures, retained in equity at 31 December 2002 was a loss of US$11.4
million, following the recycling of gains totaling US$15.2&nbsp;million and US$32.1
million into income during 2002 and 2001 respectively. Based on a Hedgebook
valuation of negative US$ 65.8&nbsp;million as at December&nbsp;31 2002, a further
US$58.0M of losses remain in equity to be recycled into income when the
underlying transactions, against which the hedges are designated, take place.
As at 31 December 2002, future underlying transactions are scheduled to take
place in the following years:
</FONT>
<P align="center"><FONT size="2">52</FONT>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>







<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
    <TD width="28%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
</TR>
<TR valign="bottom">
      <TD nowrap align="center"><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
      <TD nowrap align="center" colspan="3">&nbsp;</TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
      <TD nowrap align="center" colspan="3">&nbsp;</TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
      <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR valign="bottom">
      <TD nowrap align="center" valign="top"><FONT size="1"><B>Year</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
      <TD nowrap align="center" colspan="3"><FONT size="1"><B>Deferred hedging<br>Costs</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
      <TD nowrap align="center" colspan="3"><FONT size="1"><B>Residual Other<br>Comprehensive</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
      <TD nowrap align="center" colspan="3"><FONT size="1"><B>Total OCI to<br>recycled
        to</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>/ (Gains)</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Income</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>income</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$ millions</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$ millions</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$ millions</B></FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2003</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">8.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2004</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">10.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2005</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">9.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2006</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">8.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">14.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2007</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(0.4</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">15.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">14.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2008</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(6.0</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">13.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">7.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2009</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1.6</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2010</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(0.3</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">11.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">58.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">69.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">In order to prevent a fall in gold prices from affecting the company&#146;s ability
to make loan payments, the syndicated facility agreement requires that Lihir
hedge a portion of its anticipated gold production. The syndicated financing
facility agreement signed in November 2000 stipulated minimum levels of hedging
in each of the years 2001, 2002, 2003, 2004 and 2005, of 505,500, 480,025,
380,000 260,000 and 140,000 ounces, respectively. As part of the hedgebook
restructure in 2002, approval was sought and obtained from the Facility Agent
to vary the minimum hedging requirements, so as to provide shareholders with
greater exposure to the spot price of gold in the near term. The revised
hedgebook profile is reflected in the tabulation at Note 24 to the financial
statements. The maximum level stipulated in the syndicated facility agreement
is 80% of proven and probable reserves. See Item&nbsp;11 &#150; &#147;Quantitative and
Qualitative Disclosure about Market Risk&#148; and Note 24 to the Financial
Statements for more details.
</FONT>
<P align="left"><FONT size="2">The intended effect of any future hedging transactions will be to lock in a
minimum sales price at the time of the transactions, thereby reducing the
impact on the company of a future fall in gold prices. However, no assurances
can be given as to whether, when or at what prices or cost the company will be
able to enter into hedging transactions. It should also be noted that the
effect of some hedging transactions will be to eliminate or limit to some
extent revenues the company would otherwise receive as a result of rises in the
price of gold. A forward sale, for example, would mean Lihir would not realize
any additional revenues above the gold price specified in the contract. Other
hedging techniques can be used to enable Lihir to share in some portion of
rises in gold prices. The company&#146;s profitability could be adversely affected
if for any reason its production of gold is unexpectedly interrupted and as a
result it is unable to produce sufficient gold to cover any forward sales
commitments it may have made.
</FONT>
<P align="left"><FONT size="2"><B><i>Production and Operating
Costs</i></B>
</FONT>

<P align="left"><FONT size="2">The following table sets down the gold production, average annual cash
production and cash operating costs during 2002, 2001 and 2000.
</FONT>
<P align="center"><FONT size="2">53</FONT>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<CENTER>
  <TABLE cellspacing="0" border="0" cellpadding="0" width="85%">
    <TR valign="bottom">
      <TD width="3%">&nbsp;</TD>
      <TD width="62%">&nbsp;</TD>
      <TD width="3%">&nbsp;</TD>
      <TD width="4%">&nbsp;</TD>
      <TD width="1%">&nbsp;</TD>
      <TD width="5%">&nbsp;</TD>
      <TD width="3%">&nbsp;</TD>
      <TD width="3%">&nbsp;</TD>
      <TD width="1%">&nbsp;</TD>
      <TD width="4%">&nbsp;</TD>
      <TD width="3%">&nbsp;</TD>
      <TD width="3%">&nbsp;</TD>
      <TD width="1%">&nbsp;</TD>
      <TD width="4%">&nbsp;</TD>
    </TR>
    <TR valign="bottom">
      <TD><FONT size="1">&nbsp;</FONT></TD>
      <TD><FONT size="1">&nbsp;</FONT></TD>
      <TD><FONT size="1">&nbsp;</FONT></TD>
      <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
      <TD><FONT size="1">&nbsp;</FONT></TD>
      <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
      <TD><FONT size="1">&nbsp;</FONT></TD>
      <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
    </TR>
    <TR valign="bottom" bgcolor="#eeeeee">
      <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Ore
          Processed (Tonnes&#146;000)</FONT></DIV></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">3,828</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">3,619</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">3,414</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
    </TR>
    <TR valign="bottom">
      <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Gold
          Produced (Ounces)</FONT></DIV></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">607,088</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">647,942</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">606,310</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
    </TR>
    <TR valign="bottom" bgcolor="#eeeeee">
      <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Operating
          Expenses (US$&nbsp;millions)<br> Mining expenses</FONT></DIV></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">72,966</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">65,724</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">58,850</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
    </TR>
    <TR valign="bottom">
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Processing
          costs</FONT></DIV></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">30,446</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">31,842</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">32,272</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
    </TR>
    <TR valign="bottom" bgcolor="#eeeeee">
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Power
          generation costs</FONT></DIV></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">24,103</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">24,450</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">23,247</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
    </TR>
    <TR valign="bottom">
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">General
          and administrative costs</FONT></DIV></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">31,300</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">21,409</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">24,062</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
    </TR>
    <TR valign="bottom" bgcolor="#eeeeee">
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Refining,
          royalty and management fees</FONT></DIV></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">7,933</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">7,961</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">8,315</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
    </TR>
    <TR valign="bottom">
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Costs
          deferred and transferred to inventories</FONT></DIV></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">(19,556</FONT></TD>
      <TD nowrap><FONT size="2">)</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">(3,080</FONT></TD>
      <TD nowrap><FONT size="2">)</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">(6,583</FONT></TD>
      <TD nowrap><FONT size="2">)</FONT></TD>
    </TR>
    <TR>
      <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><HR size="1" noshade></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><HR size="1" noshade></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><HR size="1" noshade></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
    </TR>
    <TR valign="bottom" bgcolor="#eeeeee">
      <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">147,192</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">148,306</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">140,163</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
    </TR>
    <TR>
      <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><HR size="1" noshade></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><HR size="1" noshade></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><HR size="1" noshade></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
    </TR>
    <TR valign="bottom">
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Refining</FONT></DIV></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">556</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">604</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">540</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
    </TR>
    <TR valign="bottom" bgcolor="#eeeeee">
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Royalties</FONT></DIV></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">3,975</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">4,016</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">4,648</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
    </TR>
    <TR valign="bottom">
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Management
          Fee</FONT></DIV></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">3,402</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">3,341</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">3,127</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
    </TR>
    <TR>
      <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><HR size="1" noshade></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><HR size="1" noshade></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><HR size="1" noshade></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
    </TR>
    <TR valign="bottom" bgcolor="#eeeeee">
      <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Refining,
          royalty and management fees</FONT></DIV></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">7,933</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">7,961</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">8,315</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
    </TR>
    <TR>
      <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><HR size="1" noshade></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><HR size="1" noshade></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><HR size="1" noshade></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
    </TR>
    <TR valign="bottom">
      <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cash
          Production Costs</FONT></DIV></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2"><strong>2002</strong></FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2"><strong>2001</strong></FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2"><strong>2000</strong></FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
    </TR>
    <TR valign="bottom" bgcolor="#eeeeee">
      <TD colspan="2"><FONT size="2">(US$ per
          tonne of ore processed)<br> Mining</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">19.1</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">18.2</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">17.2</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
    </TR>
    <TR valign="bottom">
      <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Processing</FONT></DIV></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">8.0</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">8.8</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">9.4</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
    </TR>
    <TR valign="bottom" bgcolor="#eeeeee">
      <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Power
          generation</FONT></DIV></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">6.3</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">6.8</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">6.8</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
    </TR>
    <TR valign="bottom">
      <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">General
          and Administrative</FONT></DIV></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">8.2</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">5.9</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">7.0</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
    </TR>
    <TR>
      <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><HR size="1" noshade></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><HR size="1" noshade></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><HR size="1" noshade></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
    </TR>
    <TR valign="bottom" bgcolor="#eeeeee">
      <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total</FONT></DIV></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">41.6</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">39.7</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">40.6</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
    </TR>
    <TR>
      <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><HR size="1" noshade></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><HR size="1" noshade></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><HR size="1" noshade></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
    </TR>
  </TABLE>
</CENTER>
<P align="left"><FONT size="2">Lihir processed 3,828 kt of sulphide ore during 2002, producing 607,088 ounces
gold in bullion. Several significant production reliability issues were
overcome during the year, including an autoclave baffle wall failure and failed
lining of the tailings de-aeration tank. Mine grade was in line with
expectations and gold recovery decreased in line with increased throughput
rates.
</FONT>
<P align="left"><FONT size="2">Autoclave performance improved in the latter half of the year, with all feed
pumps generally operating at maximum speed. Improved planning, equipment and
work practices meant that the Company was able to further extend the time
between scheduled autoclave maintenance shutdowns to 11&nbsp;months. During these
shutdowns, autoclave linings were inspected and found to be in excellent
condition.
</FONT>
<P align="left"><FONT size="2">The pebble crushing circuit was successfully completed and commissioned without
incident. The circuit is designed to increase the throughput capacity of the
grinding circuit. Further de-bottlenecking initiatives are now in progress,
designed to fully utilize installed autoclave and oxygen production capacity.
These include:
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">raising the throughput capacity of the autoclave feed pumping system
by the installation of additional pumps; and</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">increasing the capacity/efficiency of the carbon in leach circuit.</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">54</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="left"><FONT size="2">In April 2000 the mining contract with Thiess-Roche Joint Venture was
terminated and Lihir assumed mining operations itself. Changes in the mining
operation since the transfer include an increased flexibility in mine planning,
better utilisation of available resources and a reduction in mine management
personnel.
</FONT>
<P align="left"><FONT size="2">Mine production rates fluctuate between 35&nbsp;million tonnes per annum to 45
million tonnes per annum. Production at these rates was previously prohibitive
because of the higher cost of contract mining. This rate allows flexibility in
the ore cut-off grade and brings forward the development of future high-grade
zones.
</FONT>
<P align="left"><FONT size="2">In 2002 mining was predominantly from Phase 3 and Phase 4 of the Minifie ore
body. Production of ore from the high grade Phase 5 in the Lienetz ore body is
scheduled to start in late 2004 or early 2005.
</FONT>
<P align="left"><FONT size="2">Material moved during the year is shown in the table below.
</FONT>
<CENTER>
  <TABLE cellspacing="0" border="0" cellpadding="0" width="85%">
    <TR valign="bottom">
      <TD width="37%">&nbsp;</TD>
      <TD width="3%">&nbsp;</TD>
      <TD width="1%">&nbsp;</TD>
      <TD width="1%">&nbsp;</TD>
      <TD width="1%">&nbsp;</TD>
      <TD width="3%">&nbsp;</TD>
      <TD width="3%">&nbsp;</TD>
      <TD width="1%">&nbsp;</TD>
      <TD width="3%">&nbsp;</TD>
      <TD width="3%">&nbsp;</TD>
      <TD width="1%">&nbsp;</TD>
      <TD width="1%">&nbsp;</TD>
      <TD width="2%">&nbsp;</TD>
      <TD width="3%">&nbsp;</TD>
      <TD width="3%">&nbsp;</TD>
      <TD width="1%">&nbsp;</TD>
      <TD width="3%">&nbsp;</TD>
      <TD width="3%">&nbsp;</TD>
      <TD width="1%">&nbsp;</TD>
      <TD width="1%">&nbsp;</TD>
      <TD width="2%">&nbsp;</TD>
      <TD width="3%">&nbsp;</TD>
      <TD width="1%">&nbsp;</TD>
      <TD width="1%">&nbsp;</TD>
      <TD width="1%">&nbsp;</TD>
      <TD width="3%">&nbsp;</TD>
      <TD width="3%">&nbsp;</TD>
      <TD width="1%">&nbsp;</TD>
      <TD width="3%">&nbsp;</TD>
      <TD width="3%">&nbsp;</TD>
      <TD width="1%">&nbsp;</TD>
      <TD width="1%">&nbsp;</TD>
      <TD width="2%">&nbsp;</TD>
    </TR>
    <TR valign="bottom">
      <TD><FONT size="1">&nbsp;</FONT></TD>
      <TD><FONT size="1">&nbsp;</FONT></TD>
      <TD nowrap align="center" colspan="11"><FONT size="1"><B>2002</B></FONT></TD>
      <TD><FONT size="1">&nbsp;</FONT></TD>
      <TD nowrap align="center" colspan="7"><FONT size="1"><B>2001</B></FONT></TD>
      <TD><FONT size="1">&nbsp;</FONT></TD>
      <TD nowrap align="center" colspan="11"><FONT size="1"><B>2000</B></FONT></TD>
    </TR>
    <TR valign="bottom">
      <TD><FONT size="1">&nbsp;</FONT></TD>
      <TD><FONT size="1">&nbsp;</FONT></TD>
      <TD nowrap align="center" colspan="7"><FONT size="1"><B>K tonnes</B></FONT></TD>
      <TD><FONT size="1">&nbsp;</FONT></TD>
      <TD nowrap align="center" colspan="3"><FONT size="1"><B>g Au/t</B></FONT></TD>
      <TD><FONT size="1">&nbsp;</FONT></TD>
      <TD nowrap align="center" colspan="3"><FONT size="1"><B>K tonnes</B></FONT></TD>
      <TD><FONT size="1">&nbsp;</FONT></TD>
      <TD nowrap align="center" colspan="3"><FONT size="1"><B>g Au/t</B></FONT></TD>
      <TD><FONT size="1">&nbsp;</FONT></TD>
      <TD nowrap align="center" colspan="7"><FONT size="1"><B>K tonnes</B></FONT></TD>
      <TD><FONT size="1">&nbsp;</FONT></TD>
      <TD nowrap align="center" colspan="3"><FONT size="1"><B>g Au/t</B></FONT></TD>
    </TR>
    <TR valign="bottom" bgcolor="#eeeeee">
      <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">High-Grade
          Sulphide Ore</FONT></DIV></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">4,985</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">5.20</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">3,225</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">6.29</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">2,981</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">7.06</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
    </TR>
    <TR valign="bottom">
      <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Low-Grade
          Sulphide Ore</FONT></DIV></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">4,305</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">2.31</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">4,626</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">2.59</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">3,682</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">2.89</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
    </TR>
    <TR valign="bottom" bgcolor="#eeeeee">
      <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Oxide
          Ore</FONT></DIV></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">&#151;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">&#151;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">&#151;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">&#151;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">187</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">2.32</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
    </TR>
    <TR valign="bottom">
      <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total
          Ore</FONT></DIV></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">9,290</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">3.86</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">7,851</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">4.11</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">6,850</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">4.69</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
    </TR>
    <TR valign="bottom" bgcolor="#eeeeee">
      <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total
          Waste</FONT></DIV></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">30,723</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">24,082</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">29,505</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
    </TR>
    <TR valign="bottom">
      <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total
          Material</FONT></DIV></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">40,013</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">31,933</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD align="right"><FONT size="2">36,355</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
      <TD><FONT size="2">&nbsp;</FONT></TD>
    </TR>
  </TABLE>
</CENTER>
<P align="left"><FONT size="2">Based on the new reserve estimates and current preliminary mine plan estimates,
production is expected to be approximately 610,000 ounces in 2003, greater than
650,000 in the years 2004-2008, approximately 600,000 ounces per year through
to and including 2013, greater than 500,000 ounces through to 2016 and
approximately 350,000 ounces per year through the end of mining and stockpile
rehandle period out to and including 2035.
</FONT>
<P align="left"><FONT size="2"><B><I>Mining Expenses </I></B><B>&#150; </B>Mining expenses were US$ 73.0&nbsp;million in 2002 compared with
US$65.7&nbsp;million in 2001, US$58.9&nbsp;million in 2000 and US$ 70.7&nbsp;million in 1999.
Costs for 2002 were $US7.3&nbsp;million higher than 2001, resulting from increased
maintenance on the mining fleet and waste barges. The major elements of total
mining costs during the open pit mining phase are hauling, loading, blasting
and dewatering. These elements combined account for an average of
approximately 70% of total direct mining costs.
</FONT>
<P align="left"><FONT size="2">During the 2002 Mining Period, mining expenses are allocated between the direct
process ore and the stockpile ore on the basis of the amount of contained gold
and only the expenses attributable to direct process ore will be expensed.
Mining expenses attributable to the stockpiled ore will be expensed when the
ore is processed and sold during the Stockpile Processing Period after open pit
mining ceases. This however is dependent on net realizable value tests.
Inventory is valued at the lower of cost and net realizable value. As at
December&nbsp;31, 2002 non-current stockpiles were fully provided against, based on
their net realizable values. Because of the lower grades that will be
processed during the Stockpile Processing Period, unit cash operating costs
will be significantly higher during this period compared to the Mining Period.
</FONT>
<P align="left"><FONT size="2">Direct expenditure on mining is brought to account for each phase of the mine&#146;s
development based on the estimated ratio of waste to ore for that phase.
During the Mining Period the actual ratio of waste to ore removed for each
phase varies from year to year. In periods where more than the average amount
of waste is removed the surplus is transferred to the deferred mining cost
account. It is subsequently expensed during periods where the
</FONT>
<P align="center"><FONT size="2">55</FONT>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="left"><FONT size="2">waste to ore
ratio is less than the average. The average amount of waste to be removed is
assessed according to each mining phase, and not over the entire life of the
mine.
</FONT>
<P align="left"><FONT size="2"><B><I>Processing Costs </I></B><B>- </B>Processing costs fell to US$30.4&nbsp;million in 2002 from
US$31.8&nbsp;million in 2001, US$32.3&nbsp;million in 2000 and US$37.6&nbsp;million in 1999
following further cost efficiencies in processing operations.
</FONT>
<P align="left"><FONT size="2"><B><I>Power Generation Costs &#151; </I></B>Power generation costs were US$24.1&nbsp;million in 2002
compared to US$24.5&nbsp;million in 2001, US$23.3&nbsp;million in 2000 and US$13.6
million in 1999. In 2002 higher maintenance costs were offset by lower Heavy
Fuel Oil consumption.
</FONT>
<P align="left"><FONT size="2"><B><I>General and Administrative Expenses </I></B><B>&#150; </B>General and administrative costs were
$US$ 31.3&nbsp;million in 2002 compared to US$21.4&nbsp;million in 2001, US$24.1&nbsp;million
in 2000 and US$32.4&nbsp;million in 1999. Apart from an increase in insurance
premiums of $US2&nbsp;million and increased travel costs following the
standardization of fly-in fly-out rosters, the primary reason for the increase
in costs for 2002 relates to the de-recognition of liabilities of US$7&nbsp;million,
resulting from a review of creditor balances in 2001.
</FONT>
<P align="left"><FONT size="2"><B><I>Royalty, Refining and Management Fees </I></B><B>- </B>These totaled US$7.9&nbsp;million,
US$8.0&nbsp;million, and US$8.3&nbsp;million in each of the years 2002, 2001 and 2000
respectively.
</FONT>
<P align="left"><FONT size="2">Mining royalties payable to the PNG Government are 2% of either the FOB value
of the minerals, if they are exported without smelting or refining in PNG, or
of the net smelter returns from the minerals, if they are smelted or refined in
PNG. Net smelter returns is defined to mean the value of the smelted or
refined product (<I>e.g., </I>dor&#233; gold) less the costs, charges and expenses incurred
in connection with the smelting or refining process.
</FONT>
<P align="left"><FONT size="2">Lihir Management Company&#146;s monthly fee for managing the Lihir operation is the
greater of US$250,000 or 1.5% of the average monthly operating costs in the
previous three-month period, subject to an inflation adjustment. See
&#147;Additional Information &#150; Material Contracts &#150; Lihir Management&#148; for a
description of the management agreement between Lihir and Lihir Management
Company.
</FONT>
<P align="left"><FONT size="2">The agreement with Rothschild Australia Pty Ltd and Metals Refining Operations
Limited in relation to the refining of its gold dor&#233; production expired in
2002. Currently, gold refining is being carried out under a short-term
arrangement with AGR Mathey. The refining fee is derived from four components:
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Pricing charge &#151; A$0.40 per gross dor&#233; ounce.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Transport from the mine to Port Moresby including transit insurance -
a sliding scale according to quantity and ranging from A$0.20 to
A$0.48 per gross troy ounce.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Transport from Port Moresby to Perth including transit insurance &#151; a
sliding scale according to quantity and ranging from A$0.425 to A$0.60
per gross troy ounce.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Location London swap charges &#150; US$0.25 per fine gold ounce outturn.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">A longer-term arrangement is currently under negotiation with AGR Mathey.
</FONT>
<P align="left"><FONT size="2"><B><I>Gross Cash Costs and Total Cash Costs &#150; </I></B>These are set down in the table below
prepared in accordance with the Gold Institute Standard:
</FONT>
<P align="center"><FONT size="2">56</FONT>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%">
<TR valign="bottom">
    <TD width="57%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Gross cash cost</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="center"><FONT size="2">US$/ounce</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">245</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">216</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">240</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">- deferred mining costs</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="center"><FONT size="2">US$/ounce</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(6</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(4</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">26</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">- low grade stockpile adjustment</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="center"><FONT size="2">US$/ounce</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(13</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">- inventory adjustment</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" nowrap align="center"><FONT size="2">US$/ounce</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(12</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(13</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">- corporate expenses</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" nowrap align="center"><FONT size="2">US$/ounce</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(4</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
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</TR>
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    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total cash cost</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="center"><FONT size="2">US$/ounce</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">227</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">221</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">236</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
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    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
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    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">Gross cash costs per ounce were substantially higher in 2002 resulting from
lower production, coupled with increased mine maintenance and general and
administrative costs. The large inventory adjustment in 2002 related to gold
in transit at yearend.
</FONT>
<P align="left"><FONT size="2"><B>Other Charges</B>
</FONT>

<P align="left"><FONT size="2"><B><I>Depreciation and Amortization &#150; </I></B>The depreciation charge for 2002 amounted to
US$27&nbsp;million compared to US$32&nbsp;million in 2001, and US$35&nbsp;million in 2000.
The reduction from 2001 to 2002 was attributable to an increase in reserves and
a reduction in the depreciable base due to the impairment in 2000.
</FONT>
<P align="left"><FONT size="2">Capitalized development costs for mine properties are amortized using the
units-of-production method. The units-of-production method results in an
amortization charge proportional to the depletion of estimated proven and
probable ore reserves. Amortization of the mine properties accounts for the
vast majority of total depreciation and amortization charges.
</font>
<P align="left"><FONT size="2">The cost of buildings, machinery and equipment is written off over the expected
economic life of the item, adopting a method that reflects the consumption of
economic benefits. This may be based on the units-of-use method or a fixed
percentage over time.
</FONT>
<P align="left"><FONT size="2"><B><I>Interest Expense &#150; </I></B>Net finance costs amounted to US$3&nbsp;million in 2002 compared
with US$4.0&nbsp;million in 2001, andUS$14&nbsp;million in 2000. The reduction in
interest expense for 2002 reflected lower US interest rates and scheduled
principal payments under the EIB facility. Overall, the lower interest expense
since 1999 is attributable to the US$115&nbsp;million pre-payment under the
syndicated facility agreement in November 1999, a prepayment of US$25&nbsp;million
in May 2001 and scheduled principal repayments under the EIB facility.
</FONT>
<P align="left"><FONT size="2">Lihir&#146;s interest expense consisted of interest payable in respect of borrowings
under the syndicated facility agreement and the EIB facility. In addition,
premiums paid by the company in respect of certain political risk insurance
policies entered into for the benefit of the banks under the syndicated
facility agreement are included in interest expense. The aggregate political
risk insurance premiums are expected to average approximately 1.0% per annum on
the outstanding principal amount borrowed under the syndicated facility
agreement (compared with 2.9% under the previous loan agreement).
</FONT>
<P align="left"><FONT size="2">Interest expense reflects the amount drawn down under the syndicated facility
agreement at any point in time and the prevailing rate of interest. The
interest rate under the syndicated facility agreement is a floating rate of
LIBOR plus 1.9% per annum (compared with 1.875% under the previous loan
agreement).
</FONT>
<P align="left"><FONT size="2"><B><I>Tax Expense &#151; </I></B>While the general rate of taxation for resident PNG corporations
is 25% of taxable income, taxable income derived by such corporations from
Special Mining Lease operations is subject to tax at the higher rate of 30%
since 2001 (35% for 2000, 1999 and 1998). The company is currently subject to
this 30% tax in respect of
</FONT>

<P align="center"><FONT size="2">57</FONT>
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<P align="left"><FONT size="2">income derived from the Lihir operation. In the
case of a Special Mining Lease, mining income derived from the lease is
assessed as if it were the only income of the holder of the lease and
deductions are generally only available for expenditures attributable to the
project to which the lease relates. The company has been given approval to
prepare its tax returns in US dollars.
</FONT>
<P align="left"><FONT size="2">In previous years the company was eligible to accelerate its tax depreciation
and amortisation. These accelerated depreciation and amortization deductions
eliminated the company&#146;s taxable income during the early years of gold
production from the Lihir operation. Tax effect accounting procedures are
followed using the liability method for all temporary differences arising
between the tax bases of assets and liabilities and their carrying values for
financial reporting purposes. Income tax on temporary differences are set
aside to deferred tax liability and deferred tax asset accounts at current
rates. Deferred tax assets relating to deductible temporary differences and tax
losses are only carried forward as an asset to the extent that it is probable
that future taxable profit will be available against which the deductible
temporary differences and tax losses can be utilised. At the end of 2002 Lihir
elected not to recognise US$138&nbsp;million of deferred tax assets (2001: US$117
million and 2000: US$146&nbsp;million) on the grounds that, at present gold prices,
the period over which the benefit is likely to be realized extends too far into
the future for realization to be regarded as probable.
</FONT>
<P align="left"><FONT size="2">In the Budget for Papua New Guinea, passed at the end of 1998, the PNG
Government introduced an interest withholding tax at a rate of 15% effective
January&nbsp;1, 1999, which would apply to the interest payments under the company&#146;s
old loan agreement. The provisions of that loan agreement required the company
to meet the obligation of any such withholding tax. The company made
submissions to the PNG Government and the taxation task force for the abolition
of the interest withholding tax. The interest withholding tax was repealed
from legislation on September&nbsp;1, 1999.
</FONT>
<P align="left"><FONT size="2">A 4% mining levy imposed in the 1998 budget was also amended during 1999
following considerable lobbying by industry groups. The 45 mining levy was
replaced by a more revenue neutral structure, designed to ensure that the
government did not lose revenue as a result of the introduction of a Value
Added Tax (VAT)&nbsp;system in 1999. Essentially the mining levy seeks to impose an
additional charge on purchases by the company to compensate for the revenue
forgone by the Government on reducing various import duties on the introduction
of the VAT system. The terms of this arrangement were negotiated between the
government and industry groups. In the 2001 annual budget the PNG Government
announced that the mining levy would be phased out over 4&nbsp;years from 1 January
2002. This decision was repealed in the 2003 budget and the levy was left at
75% of the original rate introduced. Industry groups are at present lobbying
for the phasing out of the levy.
</FONT>
<P align="left"><FONT size="2">During 2001 the dividend withholding tax was reduced from 15% to 10%.
</FONT>
<P align="left"><FONT size="2">At December&nbsp;31 2002 the group had a net deferred tax position of US$ nil (2001:
US$ nil and 2000: US$ nil), a current period tax expense of US$16.4&nbsp;million
(2001: US$16.4&nbsp;million tax benefit and 2000: US$ nil) included in the income
statement and a tax benefit of US$ 16.4&nbsp;million (2001: US$16.4&nbsp;million tax
charge and 2000: US$ nil) included in equity. At that date the group also had
unrecognised tax losses of US$111.3&nbsp;million (2001: US$89.4&nbsp;million and 2000:
US$ nil) and net deductible temporary differences of US$349.8&nbsp;million (2001:
US$300.4&nbsp;million and 2000: US$486.8&nbsp;million). The tax losses can be carried
forward for a period not exceeding 20&nbsp;years.
</FONT>
<P align="left"><FONT size="2">Deferred tax assets have not been recognised beyond deferred tax liabilities
because the group does not consider the realisation of the tax benefits through
future taxable profits as probable, which implies a high level of likelihood.
The recognition of deferred tax assets to the extent of deferred tax
liabilities is required under IAS 12, as they relate to income taxes levied by
the same taxation authority and the taxable temporary differences are expected
to reverse in the same period as the deductible temporary differences.
</FONT>
<P align="center"><FONT size="2">58</FONT>
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<P align="left"><FONT size="2">In accordance with IAS 12 a Deferred Tax Asset of US$16.4million was
recognised, being to the extent of the Deferred Tax Liability, on the 31
December 2001. This arose as a consequence of the valuation of the effective
portion of the hedgebook being US$54.8M in-the-money. With the effective
portion of the hedgebook valuation being US73.0&nbsp;million out-of-the-money at 31
December 2002, the Deferred Tax Liability was effectively eliminated.
</FONT>
<P align="left"><FONT size="2">As Lihir does not consider the realisation of its tax benefits as probable, no
Deferred Tax Asset has been recognised. On the same basis, the Deferred Tax
Asset previously raised on the 31 December 2001 was removed from the Balance
Sheet, giving rise to a tax charge of US$16.4&nbsp;million. This tax charge is
non-cash and offsets the non-cash tax benefit of US$16.4&nbsp;million recognised in
the prior year.
</FONT>
<P align="left"><FONT size="2"><B>Impairment Provisions</B>
</FONT>

<P align="left"><FONT size="2">Continued weakness in prevailing prices and the outlook for the gold market
prompted a downward revision in Lihir&#146;s long-term gold price assumption as at
December&nbsp;31, 1999 from US$350/oz to US$325/oz. Lihir restated its 1999
financial accounts to record a US$237&nbsp;million impairment provision in
compliance with International Accounting Standard IAS 36.
</FONT>
<P align="left"><FONT size="2">Lihir responded to the deteriorating outlook for gold by further reducing its
long-term gold price assumption from US$325 to US$300/oz as at December&nbsp;31,
2000. The resulting impairment provision was US$121&nbsp;million, which was
reflected in Lihir&#146;s 2000 accounts. Together with the US$237&nbsp;million provision
taken in its re-stated 1999 accounts, Lihir has made a cumulative non-cash
impairment charge of US$358&nbsp;million.
</FONT>
<P align="left"><FONT size="2">In 2001, after applying the same principles as in 2000, no impairment was
required to be recognized at the gold price used in the reserves statement of
$US300, or at the lower sensitivity price of $US280.
</FONT>
<P align="left"><FONT size="2">In 2002, after applying the same principles as the previous years and
revisiting critical assumptions, including life of mine, remaining reserves, a
long term gold price assumption of $US305 (2001: US$280) and a pre-tax real
discount rate of 7.0% (2001: 6%), an impairment reversal to the value of
$US37.9M was required in accordance with IAS 36.
</FONT>
<P align="left"><FONT size="2"><B>Foreign Currency Fluctuations</B>
</FONT>

<P align="left"><FONT size="2">The company&#146;s functional currency is the US dollar and accordingly its IAS
Financial Statements are prepared in US dollars. Virtually all of the
company&#146;s revenues are received in US dollars and a substantial portion of its
operating expenses are denominated in US dollars. However, a portion of the
company&#146;s total expenditures, principally expenses relating to expatriate
salaries, benefits, consultants, grinding materials, and explosives are
denominated in Australian dollars and certain of its expenses are denominated
in Kina. Accordingly, a depreciation of the US dollar against the Australian
dollar or Kina would adversely affect the company&#146;s financial results. In
addition, the company is subject to certain PNG requirements regarding the
maintenance of cash reserves in PNG in a Kina-denominated account. See
&#147;Additional Information &#150; Exchange Controls&#148;.
</FONT>
<P align="left"><FONT size="2"><B>Recently Issued US Financial Accounting Standards</B>
</FONT>

<P align="left"><FONT size="2">The Financial Accounting Standards Board (&#147;FASB&#148;) has issued certain Statements
of Financial Accounting Standards (&#147;FAS&#148;), which are not effective with respect
to the fiscal years presented in the consolidated financial statements.
</FONT>
<P align="center"><FONT size="2">59</FONT>
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<P align="left"><FONT size="2">The Group does not expect any impact from the adoption of FASB Interpretation
No.&nbsp;45: &#147;Indemnification Clauses in Business Transactions&#148; or FASB
Interpretation No.&nbsp;46 &#147;Consolidation of Variable Interest Entities&#148;.
</FONT>
<P align="left"><FONT size="2">In August 2001, the FASB issued FAS No.&nbsp;144, &#147;Accounting for the Impairment or
Disposal of Long-Lived Assets.&#148; This Statement supersedes FAS No.&nbsp;121 and the
accounting and reporting provisions of APB Opinion No.&nbsp;30. This Statement will
require one accounting model be used for long-lived assets to be held and used
or disposed of by sale, whether previously held and used or newly acquired, and
will broaden the presentation of discontinued operations to include more
disposal transactions. This Statement was adopted by the company on January&nbsp;1,
2002, and there was no impact on adoption.
</FONT>
<P align="left"><FONT size="2">In June 2001, FASB issued FAS No.&nbsp;143, &#147;Accounting for Asset Retirement
Obligations.&#148; With the adoption of this Statement, retirement obligations will
be recognized when they are incurred and displayed as liabilities and the
initial measurement will be at fair value. In addition, the asset retirement
cost will be capitalized as part of the asset&#146;s carrying value and subsequently
allocated to expense over the asset&#146;s useful life. This Statement is required
to be adopted by the company on January&nbsp;1, 2003. Lihir is anticipates that the
implementation of this standard will be similar to the current treatment of
restoration provisions in terms of IAS 37 Provisions.
</FONT>
<P align="left"><FONT size="2">In addition, in June 2001, FASB issued FAS No.&nbsp;141, &#147;Business Combinations&#148; and
FAS No.&nbsp;142, &#147;Goodwill and Other Intangible Assets.&#148; With the adoption of FAS
Nos. 141 and 142, business combinations initiated after June&nbsp;30, 2001, will be
required to be accounted for using the purchase method, and goodwill and
intangible assets that have indefinite useful lives will not be amortized but
rather will be tested at least annually for impairment. Intangible assets that
have finite useful lives will continue to be amortized over their useful lives,
but without the constraint of the 40&nbsp;year ceiling. FAS No.&nbsp;142 is required to
be adopted by the company on January&nbsp;1, 2002. These statements were adopted by
the company on January&nbsp;1, 2002, and there was no impact on adoption.
</FONT>
<P align="left"><FONT size="2"><B>Recently Issued IFRS Standards</B>
</FONT>

<P align="left"><FONT size="2">There are expected to be numerous changes in International Financial Reporting
Standards (IFRS)&nbsp;during 2003 but only a few new or revised standards and
interpretations are applicable for the first time to December&nbsp;31 2002&nbsp;year
ends. None of these standards have a material affect on Lihir&#146;s December&nbsp;31
2002 financial statements.
</FONT>
<P align="left"><FONT size="2">The International Accounting Standards Board (IASB)&nbsp;are currently working on a
number of improvement projects to existing IFRS as well as a short-term
convergence project between IFRS and US GAAP. The aims of the improvements
project was to raise the quality and consistency of financial reporting by
drawing on best practice from around the world and removing options in
international standards. The Improvements project is a first step by the IASB
to promote convergence on high quality solutions in its objective to establish
a globally accepted set of accounting standards. As Lihir&#146;s financial
statements are prepared in accordance with IFRS, its financial statements in
future periods may be affected by these impending changes. Specific projects
which might be relevant to Lihir&#146;s financial statements in future periods if
they are adopted include:
</FONT>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><I>Short-term convergence project. </I>The objective of this project is to
reduce differences between IFRS and US GAAP. The project is a joint
project with the FASB. Key areas being considered include considering
convergence of FAS 128 Earnings per Share to converge with IAS 33,
amendments to IAS 37 Provisions, Contingent Liabilities and Contingent
Assets, improvements to IAS 32 Financial Instruments: Disclosure and
Presentation and IAS 39 Financial Instruments: Recognition and
Measurement and others. As this project is still in progress, other
than the minimization of GAAP differences, the nature of any impact to
Lihir is still indeterminate at the date of this report.</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">60</FONT>
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<p>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><I>Revenue recognition.</I> The primary objective of this project is to develop a
comprehensive set of principles for revenue recognition that will eliminate the inconsistencies in the existing
authoritative literature and accepted practices.  For its part, the
IASB&#146;S plan is that the project will lead to a
revision of the IASB Framework and IAS 18, for which it expects to publish exposure drafts in 2004.
</FONT></TD>
</TR>
<tr><td>&nbsp;</td></tr>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><I>Financial Instruments.</I> The objective of the proposed amendments is to improve the existing
requirements in IAS 32 and IAS 39. These amendments deal with issues identified by audit firms, national standard-setters, regulators and
others, and issues identified in the IAS 39 implementation guidance process or by IASB staff.  The IASB does not intend to reconsider at
this time the fundamental approach to the accounting for financial instruments established by IAS 32 and IAS 39.
</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">61</FONT>




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<!-- link3 "B. Liquidity and Capital Resources" -->
<DIV align="left"><A NAME="016"></A></DIV>
<P align="left"><FONT size="2"><B><I>B. Liquidity and Capital Resources</I></B>
</FONT>
<P align="left"><FONT size="2">As at December&nbsp;31, 1998 Lihir&#146;s net debt stood at US$235.8&nbsp;million. A major
objective for 1999 and 2000 was to reduce Lihir&#146;s debt and restructure its main
loan facility with a 26 bank syndicate. In October 1999 the company raised
US$131&nbsp;million through the placement of 141,287,000 ordinary shares at A$1.45
per share. This enabled Lihir to make a prepayment of US$115&nbsp;million in
November 1999 under the main loan facility, thereby reducing the balance to
US$127&nbsp;million. Shares sold in the October&nbsp;7, 1999 private placement in the
United States were deposited into a new restricted ADR facility for which the
Bank of New York acts as depositary.
</FONT>
<P align="left"><FONT size="2">Effective February&nbsp;2, 2000 Lihir agreed to merge with Niugini Mining by issuing
further Lihir shares to Niugini shareholders to acquire US$54&nbsp;million of cash
at the same price as the placement. The merger, by scheme of arrangement, was
approved by Lihir&#146;s shareholders in a special meeting in December 1999, by
Niugini Mining shareholders in January 2000 and by the Papua New Guinea
National Court on February&nbsp;1, 2000. The cash available from the merger was
used to purchase the mining fleet and equipment from the mining contractor for
US$42.3&nbsp;million and pay the US$7.7&nbsp;million termination fee payable for early
termination of the mining contract.
</FONT>
<P align="left"><FONT size="2">The main loan facility was terminated by agreement on November&nbsp;22, 2000 and
replaced by a new syndicated facility agreement. The new loan is in the form
of a US$50&nbsp;million revolving credit facility arranged and underwritten by
ABN-AMRO Australia Limited. Commonwealth Bank of Australia, Deutsche Bank AG,
Macquarie Bank Limited and SG Australia Limited are participating with ABN-AMRO
Australia Limited as financiers of the structure.
</FONT>
<P align="left"><FONT size="2">The new US$50&nbsp;million loan, together with US$43&nbsp;million cash generated by the
restructure of Lihir&#146;s hedge book in November 2000, was used to repay the
residual balance of US$90&nbsp;million on the previous main loan facility. The
overall interest rate spread reduced from 4.8% over LIBOR under the old
facility to 2.9% over LIBOR under the new US$50&nbsp;million facility. The new loan
extends to June 2005 (instead of June 2003 under the previous facility) and is
expected to carry Lihir through the period prior to accessing the Lienetz
deposit in 2004.
</FONT>
<P align="left"><FONT size="2">The facility limit reduces in increments as follows:
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
    <TD width="8%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="41%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="41%">&nbsp;</TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD valign="top"><FONT size="2">&#149;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
June&nbsp;30, 2003
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">US$10&nbsp;million</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#149;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
June&nbsp;30, 2004
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">US$10&nbsp;million</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD valign="top"><FONT size="2">&#149;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
June&nbsp;30, 2005
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">US$30&nbsp;million</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">The US$43&nbsp;million cash release was achieved by novating 458,035 ounces of
Lihir&#146;s main loan structured hedges to ABN-AMRO such that the average strike
price was reduced from US$471 per ounce to US$368 per ounce. Simultaneously
the opportunity was taken to reduce the balance on Lihir&#146;s subordinated
financing from the EIB from US$34&nbsp;million to US$25&nbsp;million. In 2001 debt was
further reduced by US28.4&nbsp;million, being a prepayment of US$25.0&nbsp;million on the
new revolving credit facility and scheduled payments of US$3.4&nbsp;million on the
subordinated financing from EIB.
</FONT>
<P align="center"><FONT size="2">62</FONT>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="left"><FONT size="2">Measured against the objective of reducing Lihir&#146;s net debt of US$235.8&nbsp;million
prevailing at December&nbsp;31, 1998, substantial progress has been made over the
last three financial years:
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
    <TD width="49%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="10"><FONT size="1"><B>Net debt as at December 31</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="10"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>US$ thousands</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>2000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">EIB facility</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(17,549</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(21,324</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(23,918</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Loan agreement</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Syndicated facility agreement</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(23,009</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(23,009</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(48,854</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Bank overdraft</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,297</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Less cash on hand</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">33,817</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">37,915</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">40,823</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="center" nowrap colspan="2"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="center" nowrap colspan="2"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="center" nowrap colspan="2"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net debt</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(8,038</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(6,418</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(31,949</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="center" nowrap colspan="2"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="center" nowrap colspan="2"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="center" nowrap colspan="2"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Equity</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(426,410</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(496,248</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(383,456</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net debt to debt plus equity</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">8</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">Gearing (net debt as a percentage of net debt plus equity) increased to 2% as
at December&nbsp;31, 2002.
</FONT>
<P align="left"><FONT size="2">Based on present trends, surplus cash will be generated for transfer to the
unsecured distribution account over the next several years. While Lihir
currently believes that it has or will have access to resources sufficient to
finance its operations, the adequacy of the company&#146;s financial resources will
depend upon its ability to generate sufficient revenues from gold production
and to keep its costs and other expenditures within its current estimates.
Lihir believes that working capital is sufficient for its present requirements.
</FONT>
<P align="left"><FONT size="2">Under the syndicated facility agreement, if at calculation dates of December
31 and June&nbsp;30 each year, the debt service cover ratio for the next 12&nbsp;months
is greater than 1.25 and the life of mine debt service cover ratio is greater
than 2.5, Lihir has the right to withdraw cash in excess of a US$15&nbsp;million
minimum liquidity balance from the secured accounts.
</FONT>
<P align="left"><FONT size="2">Accordingly, based on the cover ratio tests performed for December&nbsp;31, 2002,
Lihir may at any time prior to the next calculation date (June&nbsp;30, 2003)
withdraw from the secured accounts an amount equal to the cash on hand of
US$33.8&nbsp;million plus undrawn borrowings of US$27.0&nbsp;million on the syndicated
facility agreement, less the US$15&nbsp;million reserve, for its own purposes
(including a payment into a nominated distribution account which falls outside
the secured assets).
</FONT>
<P align="left"><FONT size="2">The resulting amount of US$45.8&nbsp;million constitutes a known cash reserve with
which Lihir can accommodate fluctuations in cash flows and can finance future
capital expenditure requirements.
</FONT>
<P align="center"><FONT size="2">63</FONT>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="left"><FONT size="2">The profile of Lihir&#146;s obligations to external parties is shown below:
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
    <TD width="43%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="18"><FONT size="1"><B>US$ thousands</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="18"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>Total</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>Less than 1 year</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>1 to 3 years</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>3 to 5 years</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>More than 5 years</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Long term debt</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">40,558</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,510</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,510</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">26,519</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">7,019</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Capital lease obligations</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Operating leases</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,512</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,806</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">706</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Purchase Obligations</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">20,595</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">20,595</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Management Fee Obligation</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">68,527</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,856</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6,898</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6,898</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">50,874</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Total</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>132,192</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>29,767</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>11,114</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>33,417</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>57,893</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">At December&nbsp;31, 2002 Lihir&#146;s capital expenditure commitments totaled US$10.5
million (2001: US$6.9&nbsp;million and 2000 US$13.5&nbsp;million).
</FONT>
<P align="left"><FONT size="2">Additional points to note with regards to liquidity are that the company does
not engage in off-balance sheet financing structures. Furthermore the company
is not aware of any information issued by ratings agencies that would influence
the company&#146;s ability to raise funds as, and when, required.
</FONT>
<P align="left"><FONT size="2">For a more complete description of the syndicated facility agreement, the EIB
Facility and certain related agreements, see &#147;Additional Information &#151; Material
Contracts &#151; Financing Agreements&#148;. For discussion on hedging policy, see
&#147;Quantitative and Qualitative Disclosure About Market Risk&#148;.
</FONT>
<P align="center"><FONT size="2">64</FONT>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<!-- link3 "C. Research and Development, Patents and Licenses, etc" -->
<DIV align="left"><A NAME="017"></A></DIV>
<P align="left"><FONT size="2"><B><I>C. Research and Development, Patents and Licenses, etc</I></B>
</FONT>
<P align="left"><FONT size="2">Lihir does not have a significant research and development program.
</FONT>
<!-- link3 "D. Trend Information" -->
<DIV align="left"><A NAME="018"></A></DIV>
<P align="left"><FONT size="2"><B><I>D. Trend Information</I></B>
</FONT>
<P align="left"><FONT size="2"><B>Production</B>
</FONT>

<P align="left"><FONT size="2">Lihir officially commenced production in October 1997, three months ahead of
schedule. It produced its millionth ounce of gold in July 1999, still about
three months ahead of the schedule anticipated in 1995 and described in its
initial public offering prospectus. Similarly it produced its two millionth
ounce in January 2001, about two months ahead of prospectus schedule. Lihir
believes that the potential exists to increase the rate of gold production from
the Lihir operation at certain gold price assumptions.
</FONT>
<P align="left"><FONT size="2">As specified under the Mining Development Contract, Lihir has commenced a
pre-feasibility study that, if warranted, will lead to a full feasibility
study into the possibility of expanding the project beyond the existing
capacity to a throughput of at least 13,000 tonnes per day. After consulting
with the PNG Government about the terms of the expansion plan, Lihir is free to
choose whether or not to pursue the expansion. At the date of this report this
pre-feasibility study had not been completed.
</FONT>
<P align="left"><FONT size="2">In the absence of the results of the feasibility studies, the company believes
that production increases are more likely to be implemented gradually over time
through a number of smaller steps, ranging from maximizing the throughput
capability of the initial processing plant equipment to the addition of extra
equipment to discrete parts of the processing operation. The focus through to
the end of 1998 was on optimization of installed capacity, primarily through
the provision of additional oxygen capacity by the installation of the Praxair
oxygen plant. After losing considerable production during work on the
autoclaves in the first half of 1999, priority was given to improving process
plant reliability and, in particular, to finding a robust technical solution to
the autoclave lining damage problem. Recent inspections of the autoclaves
during scheduled shutdowns confirmed that the new brick linings, installed in
the three autoclaves during 1999 and the first half of 2000, are in excellent
condition.
</FONT>
<P align="left"><FONT size="2">It was always recognised that sulfur grades in Minifie would decline. Sulfur
is required above a threshold level to ensure efficient operation of the
autoclaves. At the end of 1999 a sulfur flotation plant was introduced to
increase sulfur grades to the autoclaves and this initiative has worked well.
The next step to ameliorate declining grades was to recover heat from the tail
end of the autoclaves and recycle it to the feed. This resulted in the heat
recovery plant, engineered by Hatch Associates Pty Ltd, of which two vessels
were commissioned in the last quarter of 2001 and the final vessel commissioned
in the first quarter of 2002. The plant is already performing beyond
expectations.
</FONT>
<P align="left"><FONT size="2">Power demands have increased as a result of a deeper pit and the plant
operating consistently at higher levels. A 12th power generator was
commissioned during 2001 to relieve this potential constraint. Based on
present information, power generation using geothermal steam is a viable option
for Lihir. Well testing to determine steam production capacity from the
Minifie, Lienetz and Kapit areas were undertaken in 2001, indicating ultimate
</FONT>
<P align="center"><FONT size="2">65</FONT>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="left"><FONT size="2">power generating potential in excess of 30Mw. Based on completed feasibility
studies, a 6Mw pilot plant has been approved for construction. Commissioning
of the pilot plant was in April 2003.
</FONT>
<P align="left"><FONT size="2">It is expected that the autoclaves will require re-bricking in 2005. For three
autoclaves this represents a substantial loss of availability during this
period of time. In 2000, the Board authorised a feasibility study to affirm the
viability of installing a fourth autoclave in advance of 2005. This study will
also assess the benefit of increasing grinding and flotation capacity so that
the use of available oxygen and autoclave capacity can be maximised.
</FONT>
<P align="left"><FONT size="2">Downward pressure on costs will continue and it is expected that further cost
savings will be achieved in 2003. At a time of relatively high fuel oil costs
the positive results from studies so far on geothermal power generation are of
particular importance. A 6MW plant was commissioned in April 2003 and the
Board is due to consider approval of an investment in a further 30MW of
capacity in the third quarter of 2003. With Lihir Gold&#146;s high infrastructure
and overhead costs, increased output is the most effective means of reducing
unit costs. Additional reserves and confidence in the project&#146;s potential has
led to the initiation of a pre-feasibility study into expanding production
capacity.
</FONT>
<!-- link3 "E Events Subsequent to Signing of the Financial Statements" -->
<DIV align="left"><A NAME="019"></A></DIV>
<P align="left"><FONT size="2"><B><I>E Events Subsequent to Signing of the Financial Statements</I></B>
</FONT>
<P align="left"><FONT size="2">The Board of Directors announced at Lihir&#146;s Annual General Meeting on April&nbsp;29
2003 that a dividend of 2 Australian cents per share would be paid to holders
of ordinary shares in the company. The record date, at which time eligibility
to receive the dividend will be determined, has been declared as July 1 2003
and the payment date as July&nbsp;16 2003.
</FONT>
<P align="left"><FONT size="2">A Heads of Agreement was signed on April&nbsp;27 2003 between Lihir Gold, the
Independent State of Papua New Guinea and representatives of Lihirian
landowners which is intended to resolve issues surrounding Lihirian landowners
ownership of equity in the company. Although this agreement is not legally
binding on any party, it is anticipated that the company will, during the
second half of 2003, contribute approximately US$3.5&nbsp;million to a community
grant scheme.
</FONT>

<P align="center"><FONT size="2">66</FONT>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<!-- link2 "Item&nbsp;6. Directors, Senior Management and Employees" -->
<DIV align="left"><A NAME="020"></A></DIV>
<P align="left"><FONT size="2"><B>Item&nbsp;6. Directors, Senior Management and Employees</B>
</FONT>

<!-- link3 "A. Directors and Senior Management" -->
<DIV align="left"><A NAME="021"></A></DIV>
<P align="left"><FONT size="2"><B><I>A. Directors and Senior Management</I></B>
</FONT>
<P align="left"><FONT size="2"><B>Directors</B>
</FONT>

<P align="left"><FONT size="2">The current directors of the company as at the date of this annual report are
as follows.
</FONT>
<P align="left"><FONT size="2"><B><I>Ross Garnaut AO, BA. PhD</I></B><B>: </B>Chairman since 1995. Professor of Economics in the
Research School of Pacific and Asian studies at the Australian National
University; Chairman of Lonely Planet Publications Pty Ltd; Chairman of PNG
Sustainable Development Co Ltd; and Director, OK Tedi Mining Ltd; Former
Chairman of the Bank of Western Australia Ltd and of the Primary Industry Bank
of Australia Ltd.
</FONT>
<P align="left"><FONT size="2"><B><I>Neil Swan BE (Hons): </I></B>Appointed Managing Director of Lihir Gold Ltd and Lihir
Management Company in October 2002. Former Chief Operating Officer of Lihir
Gold Ltd. General Manager at Rio Tinto Iron Ore; General Manager Operations at
Hammersley Iron; and General Manager Business Improvement at CRA.
</FONT>
<P align="left"><FONT size="2"><B><I>Geoff Loudon BSc., MSc.: </I></B>Appointed Director in 1995. Chairman L &#038; M Mining
Limited (NZ and Bolivia) and Director Sterilox Technologies Inc (USA). Former
Chief Executive and later Chairman of Niugini Mining Limited which discovered
the Lihir deposit in joint venture with Kennecott.
</FONT>
<P align="left"><FONT size="2"><B><I>John O&#146;Reilly MSc., DIC, BSc.: </I></B>Alternate director to Jonathan Leslie. Head
of Technology for the Rio Tinto Group; Former Chief Executive Officer of Lihir
Gold Limited and Director of Lihir Gold and Lihir Management Company Limited.
Following his resignation on 1 November 2002, John was reappointed as a
Director of Lihir Gold Limited on 1 March 2003.
</FONT>
<P align="left"><FONT size="2"><B><I>Anthony Siaguru KBE LLB:
</I></B>Appointed Director in 1997 and Deputy Chairman in
2002. Chairman of the Port Moresby Stock Exchange and consultant with Blake
Dawson Waldron Lawyers in Port Moresby; Former Deputy Secretary General of the
Commonwealth of Nations.
</FONT>
<P align="left"><FONT size="2"><B><I>Peter Cassidy Ph D. BSc.: </I></B>Appointed Director effective 22 January 2003.
Director of Oxiana Resources NL and Sino Gold Limited; Former Director of
Aurion Gold and former Chief Executive Office of Goldfields Limited.
</FONT>
<P align="left"><FONT size="2"><B><I>Alan Roberts BSc (Hons): </I></B>Appointed Director in 2000 and Corporate Director in
October 2002. Former Chief Executive Officer of Lihir Gold Limited; Managing
Director of Lihir Management Company Limited; and President Director of PT
Kelian Equatorial Mining in Indonesia. Has held several senior management
positions with Rio Tinto. Alan Roberts resigned from the board on 31 March
2003.
</FONT>
<P align="left"><FONT size="2"><B><I>Jonathan Leslie MA (Oxon): </I></B>Appointed Director in 1995. Chief Executive
Diamonds and Gold Group at Rio Tinto; Director of Rio Tinto PLC and Rio Tinto
Limited. Jonathan Leslie resigned from the board on 7 March 2003.
</FONT>
<P align="left"><FONT size="2"><B><I>Marc Soipang: </I></B>Appointed Director in 1995. Chairman of the Lihir Mining Area
Landowners Association and Director of Lakaka Limited, a public company owned
by the people of Lihir Island. Marc resigned from the board effective 7 March
2003.
</FONT>
<P align="center"><FONT size="2">67</FONT>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="left"><FONT size="2"><B>Lihir Management Company</B>
</FONT>

<P align="left"><FONT size="2">Lihir Management Company manages the Lihir operation for the company pursuant
to the management agreement with the company. See &#147;Information on the Company &#151;
Business Overview &#151; Management&#148;. The managing director of Lihir Management
Company is the chief executive officer of the company and reports directly to
the company&#146;s board of directors. As a result of these arrangements, Lihir
does not have its own separate management personnel.
</FONT>
<P align="left"><FONT size="2">Several of the senior management are transferred on a temporary basis from Rio
Tinto or its subsidiaries for a specified period of time. The chart below
lists the management of Lihir Management Company and the dates they joined
Lihir Management Company and the Rio Tinto.
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
    <TD width="19%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="60%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>Year Joined</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>Lihir Management</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>Year Joined Rio</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Name</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>Position with Lihir Management Company</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>Company</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>Tinto</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">Neil Swan</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Managing Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">2001</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">1973</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Rod Antal</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Manager Corporate, Safety and Investor Relations
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">1997</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">1997</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Ron Brew</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Manager Government Liaison
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">1990</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">1990</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Phil Welten</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Manager Mine Operations
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">2001</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">2001</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Tim Dobson</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Manager Process Plant Operations
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">2002</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">2002</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Joe Daimol</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Manager Business Development
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">1995</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">1995</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Geoff Day</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Manager Community and Environment
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">1998</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">1998</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Steve Hunt</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Manager Mine Technical
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">1997</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">1994</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Nick Lambeth</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
General Manager Commercial
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">1997</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">1982</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Stuart Sankey</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Manager Mine Maintenance
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">2000</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">2000</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">John Wallace</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Manager Human Resources
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">2001</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">2001</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Borone Isana</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Manager Government Liason
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">2003</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">2003</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2"><B><I>Neil Swan: </I></B>See &#147;board of directors&#148; above.
</FONT>
<P align="left"><FONT size="2"><B><I>Rod Antal: </I></B>Joined the company in 1997, initially as the Senior Accountant.
Former Assistant Financial controller at Porgera Joint Venture and Chartered
Accountant at BDO.
</FONT>
<P align="left"><FONT size="2"><B><I>Phil Welten: </I></B>Joined the
company in 2001. Former Project Manager at Roche
Mining, Operations Manager Pannawonica at Robe River Iron Associates and Mine
Manager at WMC.
</FONT>
<P align="left"><FONT size="2"><B><I>Tim Dobson: </I></B>Joined the company in 2002. Former Process Manager at OMG Cawse
Nickel Operations, Senior Metallurgist at Placer Dome Asia Pacific and Placer
Dome South America.
</FONT>
<P align="left"><FONT size="2"><B><I>Ron Brew:</I></B> Joined the company in 1990. Former Manager Government Liason at
Kennecott Explorations and Regional Planning Advisor for the New Guinea Islands
Region.
</FONT>
<P align="center"><FONT size="2">68</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="left"><FONT size="2"><B><I>Joe Daimol: </I></B>Joined the company in 1995, initially as the Business Development
Manager; Former Accountant at Andersons Foodland Limited and Financial
Controller at Arawa Enterprises Limited.
</FONT>
<P align="left"><FONT size="2"><B><I>Geoff Day: </I></B>Joined the company in 1998. Former Director of Limnos
Environmental Consultants, Senior Environmental Chemist at OK Tedi Mining
Limited and Environmental Chemist at NSR Environmental Consultants.
</FONT>
<P align="left"><FONT size="2"><B><I>Steve Hunt: </I></B>Joined the company in 1997, initially as Chief Geologist;
Former Superintendent Geology and Grade Control at Rio Tinto&#146;s Kelian
operations and Chief Geologist at Placer&#146;s Granny Smith operations.
</FONT>
<P align="left"><FONT size="2"><B><I>Nick Lambeth: </I></B>Joined the company in 1996, initially as the Financial
Controller. Former Administration Manager at Hamersley Iron and Senior
Accountant at Pacific Coal.
</FONT>
<P align="left"><FONT size="2"><B><I>Stuart Sankey: </I></B>Joined the company in 2000. Former Engineering Manager at
Queensland Magnesia, Construction Manager at MIMS Lead IsaSmelt and Resident
Engineer at Khartoum North Thermal Power Station.
</FONT>
<P align="left"><FONT size="2"><B><I>John Wallace: </I></B>Joined the company in 2002. Former Senior Consultant at John
Davidson and Associates, HR Manager at Thiess Roche Lihir Joint Venture and
Manager Community and Employee Relations at Gold Ridge Mining.
</FONT>
<P align="left"><FONT size="2"><B><I>Barone Isana: </I></B>Joined the company in 2003 as Manager Government Liason. Has
held several senior-level positions within the PNG Government.
</FONT>
<P align="left"><FONT size="2">No family relationships exist between members of the board or senior
management. There were no arrangements or understandings with major
shareholders, customers, suppliers or others, pursuant to which any person
referred to above was selected as a director or member of senior management.
</FONT>
<!-- link3 "B. Compensation" -->
<DIV align="left"><A NAME="022"></A></DIV>
<P align="left"><FONT size="2"><B><I>B. Compensation</I></B>
</FONT>
<P align="left"><FONT size="2"><B>Directors&#146; Remuneration</B>
</FONT>

<P align="left"><FONT size="2"><B>Directors&#146; remuneration, including the value of benefits received during the year:</B>
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
    <TD width="68%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="14"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="14"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>2000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Garnaut, Ross</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">83</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">66</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">72</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Leslie, Jonathan</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Loudon, Geoff</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">19</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">23</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">28</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Merton, Michael (Retired)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">162</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">O&#146;Reilly, John</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Roberts, Alan</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">330</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">300</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">303</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Siaguru, Anthony</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">20</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Soipang, Mark (Retired)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Swan, Neil</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">298</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">69</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left"><FONT size="2">In addition, during the year the Company paid a premium of US$55,000 (2001: 46,000; 2000:
US$34,125) for Directors and Officers Liability Insurance.
</FONT>
<P align="left"><FONT size="2">The schedule below lists the remuneration by band of employees of Lihir Management Company
whose remuneration and benefits exceeded PNG K100,000. These bands include the remuneration
of the senior management individuals listed in the previous section:
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%">
<TR valign="bottom">
    <TD width="36%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="17%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="17%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center" colspan="5"><FONT size="1"><B>Remuneration and benefit band</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="10"><FONT size="1"><B>Number of Employees</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="5"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="10"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>&nbsp;</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>&nbsp;</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>US$</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>PGK</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>2000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">US$24,000 - $26,400</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K100,000 - K110,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">US$26,401 - $28,800</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K110,001 - K120,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">12</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">US$28,801 - $31,200</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K120,001 - K130,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">US$31,201 - $33,600</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K130,001 - K140,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">US$33,601 - $36,000</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K140,001 - K150,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">US$36,001 - $38,400</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K150,001 - K160,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">US$38,401 - $40,800</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K160,000 - K170,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">US$40,801 - $43,200</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K170,000 - K180,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">US$43,201 - $45,600</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K180,000 - K190,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">US$45,601 - $48,000</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K190,000 - K200,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">US$48,001 - $50,400</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K200,001 - K210,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">US$50,401 - $52,800</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K210,001 - K220,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">US$52,801 - $55,200</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K220,001 - K230,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">US$55,201 - $57,600</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K230,001 - K240,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">US$57,601 - $60,000</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K240,001 - K250,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">US$60,001 - $62,400</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K250,001 - K260,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">US$62,401 - $64,800</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K260,001 - K270,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">US$64,801 - $67,200</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K270,001 - K280,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">US$67,201 - $69,600</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K280,001 - K290,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">US$69,601 - $72,000</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K290,001 - K300,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">US$72,001 - $74,400</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K300,001 - K310,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">US$74,401 - $76,800</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K310,001 - K320,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">US$76,801 - $79,200</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K320,001 - K330,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">US$79,201 - $81,600</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K330,001 - K340,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">US$81,601 - $84,000</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K340,001 - K350,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">US$84,001 - $86,400</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K350,001 - K360,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">US$86,401 - $88,800</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K360,001 - K370,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">US$88,801 - $91,200</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K370,001 - K380,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">US$91,201 - $93,600</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K380,001 - K390,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">US$93,601 - $96,000</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K390,001 - K400,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">US$96,001 - $98,400</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K400,001 - K410,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">US$98,401 - $100,800</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K410,001 - K420,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">US$100,801 - $103,200</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K420,001 - K430,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">US$103,601 - $105,600</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K430,001 - K440,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">US$105,601 - $108,000</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K440,001 - K450,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">US$108,001 - $110,400</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K450,000 - K460,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">US$112,801 - $115,200</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K470,001 - K480,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">US$115,201 - $117,600</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K480,001 - K490,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">70</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%">
<TR valign="bottom">
    <TD width="36%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="17%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="17%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">US$117,601 - $120,000</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K490,001 - K500,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">US$124,801 - $127,200</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K520,001 - K530,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">US$127,201 - $129,600</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K530,000 - K540,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">US$136,801 - $139,200</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K570,001 - K580,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">US$146,400 - $148,800</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K610,001 - K620,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">US$168,000 - $170,400</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K700,001 - K710,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">The US$ bands are based on the 2002 PGK exchange rate and will vary for prior
periods.
</FONT>
<P align="left"><FONT size="2">No profit sharing or stock option scheme is operated by Lihir at present.
</FONT>
<!-- link3 "C. Board Practices" -->
<DIV align="left"><A NAME="023"></A></DIV>
<P align="left"><FONT size="2"><B><I>C. Board Practices</I></B>
</FONT>
<P align="left"><FONT size="2"><B>Board of Directors</B>
</FONT>

<P align="left"><FONT size="2">At the Annual General Meeting of the company held on April&nbsp;28, 1998,
shareholders approved registration of the company under the PNG Companies Act
1997 and the company was registered effective May&nbsp;15, 1998 with the PNG
Companies Act 1997 applying to the company from that date. Prior to that date
the company was subject to the provisions of the Companies Act (Chapter&nbsp;146)
which had applied in Papua New Guinea since 1964. The PNG Companies Act 1997 is
based on the New Zealand Companies Act 1993. See &#147;Information on the Company -
History and Development of the Company&#148;.
</FONT>
<P align="left"><FONT size="2">Under the PNG Companies Act 1997, the business affairs of any company
incorporated in Papua New Guinea (including Lihir) shall be managed by, or
under the direction or supervision of, the board of directors of the company.
The board of this company has all the powers necessary for managing, and for
directing and supervising the management of, the business and affairs of the
company. This is nonetheless subject to limitations contained in the Companies
Act itself and any modifications, exceptions or limitations contained in the
company&#146;s constitution.
</FONT>
<P align="left"><FONT size="2">Under the Companies Act, a company is not permitted to enter into a major
transaction unless it is approved by a special resolution (requiring a 75%
majority) of shareholders. A major transaction is defined to mean any
transaction involving:
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">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; or</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">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</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">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.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">There are other formal steps such as changing the company&#146;s constitution,
changing the company&#146;s name, approving the amalgamation of the company with
another company or putting the company into liquidation, which also require a
special resolution of shareholders.
</FONT>
<P align="center"><FONT size="2">71</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="left"><FONT size="2">The Companies Act also provides that a meeting of shareholders may pass a
resolution relating to the management of a company, but, unless the
constitution of the company provides that the resolution is binding, a
resolution so passed is not binding on the board of directors. There is no
provision in the company&#146;s constitution which would make such a resolution
binding.
</FONT>
<P align="left"><FONT size="2">The company&#146;s constitution provides generally that the business and affairs of
the company shall be managed by, or under the direction or supervision of, the
board, to the exclusion of any meeting of shareholders.
</FONT>
<P align="left"><FONT size="2">The board of directors may appoint a managing director and delegate all or any
of its powers to him. Under the Companies Act, directors are permitted, in the
absence of the Board resolving otherwise, to disclose information obtained as a
director to persons they represent.
</FONT>
<P align="left"><FONT size="2">At the Annual General Meeting of the company on April&nbsp;28, 1998 shareholders
approved a new constitution of the company, which provided for an increase in
the maximum number of directors from 11 to 12. The number of directors
appointed at April&nbsp;20, 2002 was seven.
</FONT>
<P align="left"><FONT size="2">Under the PNG Companies Act 1997 at least one of the company&#146;s directors must
reside within PNG. The directors are not required to own any shares of the
company. Subject to resignations and appointments during the year, the term of
one third of the company&#146;s directors must end at each annual general meeting,
but the retiring directors may offer themselves for re-election.
</FONT>
<P align="left"><FONT size="2">Since January&nbsp;1, 2002 the following directors have resigned:
</FONT>
<P align="left"><FONT size="2">John O&#146;Reilly &#151; November&nbsp;1, 2002.<BR>
Jonathan Leslie &#151; March&nbsp;7, 2003.<BR>
Marc Soipang &#151; March&nbsp;7, 2003.
</FONT>
<P align="left"><FONT size="2">Since January&nbsp;1, 2003 the following directors have been appointed:
</FONT>
<P align="left"><FONT size="2">Peter Cassidy &#151; January 28, 2003<BR>
John O&#146;Reilly &#151; March&nbsp;1, 2003.
</FONT>
<P align="left"><FONT size="2">Details of the directors at May&nbsp;1, 2003 are as follows:
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%">
<TR valign="bottom">
    <TD width="29%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="50%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>Year Appointed</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Name</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>Position</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>As Director</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>Term Ends</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">Ross Garnaut</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Chairman of Board
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">1995</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">2004</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Chairman of Audit Committee</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Chairman of Environmental and</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Lihir Impact Committee</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Chairman of Remuneration</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
and Nomination Committee</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Neil Swan</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Managing Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">2002</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Geoffrey Loudon</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">1995</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">72</FONT>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%">
<TR valign="bottom">
    <TD width="29%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="50%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>Year Appointed</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Name</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>Position</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>As Director</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>Term Ends</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">John O&#146;Reilly</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Member of Audit Committee
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">2003</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Director</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Member of Environmental and</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Lihir Impact Committee</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Anthony Siaguru</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Deputy Chairman of Board
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">1995</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Member of Audit Committee</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Member of Environmental and</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Lihir Impact Committee</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Member of Remuneration and</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Nomination Committee</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Peter Cassidy</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">2003</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">At the Annual General Meeting on April&nbsp;29, 2003, Ross Garnaut retired by
rotation and offered himself for re-election. He was re-elected by ordinary
resolution at the company&#146;s Annual General Meeting on April&nbsp;29, 2003. Also
John O&#146;Reilly and Peter Cassidy having been appointed since the last Annual
General Meeting retired in accordance the company&#146;s constitution and, being
eligible, offered themselves for re-election. They too were re-elected by
ordinary resolution at the company&#146;s Annual General Meeting on April&nbsp;29, 2003.
</FONT>
<P align="left"><FONT size="2"><B>Directors&#146; Service Contracts Providing for Benefits on Termination of Contract</B>
</FONT>

<P align="left"><FONT size="2">The services of Ross Garnaut are covered by a letter agreement dated May&nbsp;19,
1995 that has been extended on two occasions, the latest period being to April
30, 2004.
</FONT>
<P align="left"><FONT size="2">Service contracts between Lihir and its directors make no provision for
benefits on termination.
</FONT>
<P align="left"><FONT size="2"><B>Corporate Governance Practices</B>
</FONT>

<P align="left"><FONT size="2">The board of directors of the company is responsible to shareholders for the
overall management of the company&#146;s affairs and the setting of the strategic
business direction of the company. The company has contracted with Lihir
Management Company, a subsidiary of Rio Tinto, to manage the corporate affairs
of the company and all aspects of the Lihir operation, including any future
expansion or exploration on Lihir Island. The management agreement is subject
to the overriding authority of the company&#146;s board of directors. Lihir
Management Company operates under a budget approved by the board and is subject
to various monetary limitations and other restrictions on its authority, which
are set out in the management agreement. Certain powers and functions remain
solely with the company&#146;s board of directors and are specifically excluded from
the scope of duties of Lihir Management Company, including:
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">determination of the company&#146;s treasury policies, including foreign currency and interest rate exposure;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">determination of the company&#146;s risk management policies including insurance, gold price hedging and borrowing limits;</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">73</FONT>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>




<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">determination of the company&#146;s accounting policies; and</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">engagement of auditors to review and report to the Board on the company&#146;s internal controls and compliance with statutory and regulatory compliance.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">The company&#146;s board of directors has a commitment to maintain appropriate
corporate governance and to that end has committees listed below in place
during 2002, which form the basis of the board&#146;s risk identification and
management strategy.
</FONT>
<P align="left"><FONT size="2"><B><I>Audit Committee</I></B>
</FONT>
<P align="left"><FONT size="2">The company has an audit committee consisting of a majority of independent
Directors, which at the date of this annual report had the following members:
</FONT>
<P align="left"><FONT size="2">Ross Garnaut &#151; Chairman of Committee<BR>
Anthony Siaguru<BR>
Geoff Louden
</FONT>
<P align="left"><FONT size="2">The Audit Committee has the following responsibilities:
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Monitor relationships with both internal and external auditors of the company.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Approve the audit plan of the internal auditors.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Supervise financial risk management policy such as insurance and hedging.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Promote the company&#146;s relationship with regulatory bodies of a financial kind, <I>e.g</I>. the Bank of Papua New Guinea and the various Papua New Guinea taxation authorities.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Review all related party transactions on an ongoing basis, in particular, review of the operation of the management agreement between the company and Lihir Management Company.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">The Audit Committee has no executive directors as committee members. However,
the Managing Director of Lihir Management Company, attends all meetings of the
committee as a participating adviser by invitation of the committee.
</FONT>
<P align="left"><FONT size="2">The internal auditors report directly to the Audit Committee and the Board.
The scope of the internal audit function is determined by the Audit Committee.
</FONT>
<P align="left"><FONT size="2"><B><I>Environmental and Lihir Impact Committee</I></B>
</FONT>
<P align="left"><FONT size="2">The company has an Environmental and Lihir Impact Committee that monitors the
environmental issues and social and other impacts of the company on Lihir
Island. The members of the Environmental and Lihir Impact Committee at the
date of this annual report are:
</FONT>
<P align="center"><FONT size="2">74</FONT>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="left"><FONT size="2">Ross Garnaut  &#151; Chairman of the Committee<BR>
Anthony Siaguru<BR>
Mark Soipang (resigned March 7, 2003)<BR>
John O&#146;Reilly
</FONT>
<P align="left"><FONT size="2"><B><I>Remuneration and Nomination Committee</I></B>
</FONT>
<P align="left"><FONT size="2">The Remuneration and Nomination Committee of the Board has the following
members at the date of this annual report:
</FONT>
<P align="left"><FONT size="2">Ross Garnaut  &#151; Chairman of the Committee<BR>
Anthony Siaguru<BR>
Jonathan Leslie (resigned March, 1 2003)
</FONT>
<P align="left"><FONT size="2">The terms of reference of the Committee are to:
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Review remuneration of non-executive directors.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Review policies for the reimbursement of expenses of directors.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Devise criteria in relation to membership of the Board and its committees.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Review the membership of the board and its committees.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Nominate representatives of the board and its committees.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Devise policies relating to the appointment and retirement of non-executive directors.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">The committee reports and recommends to the board on the above issues with the
final determination to be made by the Board.
</FONT>
<!-- link3 "D. Employees" -->
<DIV align="left"><A NAME="024"></A></DIV>
<P align="left"><FONT size="2"><B><I>D. Employees</I></B>
</FONT>
<P align="left"><FONT size="2">The number of employees and contractors at the end of each year is summarized
below:
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
    <TD width="73%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>2000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Management</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Commercial, human resources, corporate and
towns, site services, business development,
community and environment</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">249</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">199</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">197</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Mining operations and mine technical</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">384</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">385</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">379</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Plant operations and maintenance</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">341</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">374</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">366</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total Lihir employees</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">978</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">962</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">945</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total contractors</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">990</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">938</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,078</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,952</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,883</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">75</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left"><FONT size="2">All but two of the employees as at end 2002 were based in Papua New Guinea,
either on Lihir Island or in Port Moresby.
</FONT>
<P align="left"><FONT size="2">All employees are employed under individual employment contracts rather than
labour awards, and all negotiations of conditions are held directly with the
employees concerned. There are no unions or employee associations active
amongst Lihir&#146;s workforce. Management continues to engage in a consultative
process with representatives of the workforce, which takes the form of monthly
meetings focussed on employee issues. These meetings allow employees to raise
for discussion any issues that may be of concern, and for management to provide
any relevant information. The outcomes of these meetings are communicated back
through the workforce through elected representatives. Daily meetings between
supervisors and their crews are also serve as a useful forum for the exchange
of information.
</FONT>
<P align="center"><FONT size="2">76</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<!-- link3 "E. Share Ownership" -->
<DIV align="left"><A NAME="025"></A></DIV>
<P align="left"><FONT size="2"><B><I>E. Share Ownership</I></B>
</FONT>
<P align="left"><FONT size="2">Pursuant the PNG Companies Act 1997 the directors have disclosed the following
interests in shares in the company and provided general disclosure of
companies, businesses and persons in which they are to be regarded as
interested:
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%">
<TR valign="bottom">
    <TD width="20%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="39%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>Interest held by</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>Companies, business and persons in</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>director in shares</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>which the Director is to be</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>of Lihir Gold</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Director</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>Nature of Interest</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>regarded as interested</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>Limited</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">Ross Garnaut</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Chairman
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Asia Pacific Economics Group Pty Ltd
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" colspan="2" valign="top"><FONT size="2">50,000</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">(Chairman)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Chairman
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Papua New Guinea Sustainable</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Development Ltd</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Chairman
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Lonely Planet Publications Pty Ltd</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Maccullochella Pty Ltd</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Ok Tedi Mining Pty Ltd</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Anthony Siaguru</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Chairman
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Pacific Re Limited
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" colspan="2" valign="top"><FONT size="2">56,460</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">(Deputy Chairman)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Chairman
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Pacific Rim Plantations Limited
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

    <TD align="center" colspan="2" valign="top"><FONT size="2">(38,460</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Chairman
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">PNG Water Limited
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

    <TD align="center" colspan="2" valign="top"><FONT size="2">registered in</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Chairman
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Port Moresby Stock Exchange Limited
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

    <TD align="center" colspan="2" valign="top"><FONT size="2">own name.</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

    <TD align="center" colspan="2" valign="top"><FONT size="2">15,000 in wife</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

    <TD align="center" colspan="2" valign="top"><FONT size="2">Wilhelmina&#146;s</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Kula Fund Limited
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

    <TD align="center" colspan="2" valign="top"><FONT size="2">name, 1,000</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Minton Limited
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

    <TD align="center" colspan="2" valign="top"><FONT size="2">in the name of</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Nautilus Minerals Limited
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

    <TD align="center" colspan="2" valign="top"><FONT size="2">each son -</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">South Pacific Post Limited
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

    <TD align="center" colspan="2" valign="top"><FONT size="2">Steven,</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Steamship Trading Company Limited
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

    <TD align="center" colspan="2" valign="top"><FONT size="2">Stanley and</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

    <TD align="center" colspan="2" valign="top"><FONT size="2">Daniel)</FONT></TD>
    <TD nowrap valign="top"><FONT size="2"></FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Peter Cassidy</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Oxiana Resources NL</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Sino Gold Limited</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Geoffrey Loudon</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Chairman
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">L and M Mining Limited
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

    <TD align="center" colspan="2" valign="top"><FONT size="2">143,840</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Sterilox Technologies Inc</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Neil Swan</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Lihir Management Company Limited</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">John O&#146;Reilly</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Lihir Management Company</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Rio Tinto Consultants Ltd</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Rio Tinto Technical Services Limited</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Employee and Officer
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Rio Tinto Plc and Rio Tinto Limited</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">Sir Anthony Siaguru was issued 23,460 shares in Lihir Gold Limited on February
14, 2000 as a Niugini Mining Limited shareholder and in consideration for the
transfer of his Niugini Mining Limited shares to Lihir Gold Limited. He held
12,500 Niugini Mining Limited shares prior to February&nbsp;14, 2000. The shares
were issued as
</FONT>
<P align="center"><FONT size="2">77</FONT>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="left"><FONT size="2">part of the merger of Niugini Mining Limited with Lihir Gold Limited by scheme
of arrangement. On March&nbsp;31, 2000, he purchased 500 shares for K1.10 each in
name of Stanley Siaguru. On April&nbsp;14, 2000, he purchased 500 shares for K1.04
each in the name of Stanley Siaguru, 1,000 shares for K1.04 each in the name of
Daniel Siaguru and 1,000 shares for K1.04 each in the name of Steven Siaguru.
</FONT>
<P align="left"><FONT size="2">No options over shares in the company are held by directors and officers of the
company. No arrangements are in place for providing the employees of Lihir
Management Company with shares or options over shares of Lihir.
</FONT>
<P align="center"><FONT size="2">78</FONT>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<!-- link2 "Item&nbsp;7. Major Shareholders and Related Party Transactions" -->
<DIV align="left"><A NAME="026"></A></DIV>
<P align="left"><FONT size="2"><B>Item&nbsp;7. Major Shareholders and Related Party Transactions</B>
</FONT>

<!-- link3 "A. Major Shareholders" -->
<DIV align="left"><A NAME="027"></A></DIV>
<P align="left"><FONT size="2"><B><I>A. Major Shareholders</I></B>
</FONT>
<P align="left"><FONT size="2">The distribution of Lihir&#146;s shareholdings as at March&nbsp;31, 2003 was:
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
    <TD width="43%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="17%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Range of Shares Held</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>Number of Shareholders</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>No of Shares Held</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">1-1,000</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">7,213</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,652,308</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">1,001-5,000</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">11,750</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">32,850,383</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">5,001-10,000</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,306</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">27,183,564</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">10,001 - 100,000</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,814</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">75,632,219</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">100,001 - over</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">188</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,002,015,741</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="center" nowrap colspan="2"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="center" nowrap colspan="2"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">25,271</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,142,334,215</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="center" nowrap colspan="2"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="center" nowrap colspan="2"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">79</FONT>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left"><FONT size="2">The twenty largest registered shareholders at April&nbsp;30, 2002 were:
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%">
<TR valign="bottom">
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="26%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="27%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>Adjusted percentage</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>excluding shares</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Rank</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>Name</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>Shares</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>Percentage<sup>(1)</sup></B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>held by NML<sup>(2)</sup></B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">1</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">National Nominees Limited</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">184,193,578</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">14.13</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">16.12</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Rio Tinto Metals Limited</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">161,527,406</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">12.39</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">14.14</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">3</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Niugini Mining Limited ("NML") <sup>(3)</sup></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">161,527,405</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">12.39</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">14.14</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">4</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Westpac Custodian Nominees Limited</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">147,726,532</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">11.33</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">12.93</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">5</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">J P Morgan Nominees Limited</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">125,558,720</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">10.96</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">10.99</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">6</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">ANZ Nominees Limited</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">77,593,908</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5.95</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6.79</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">7</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Mineral Resources Lihir Pty Ltd</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">77,169,431</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5.92</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6.76</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">8</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Citicorp Nominees Pty Ltd</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">48,438,118</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3.71</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4.24</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">9</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Rio Tinto Lihir Holdings Ltd</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">24,230,720</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.86</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2.12</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">10</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Commonwealth Custodial Services Limited</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">11,834,314</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.91</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.04</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">11</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">AMP Life Limited</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">11,003,706</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.84</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.96</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">12</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">HSBC Custody Nominees (Australia) Limited</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">10,871,980</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.83</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.95</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">13</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">The National Mutual Life Association of</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">9,787,628</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.75</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.86</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Australasia Limited</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">14</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Citicorp Nominees Pty Ltd &#060;CFS Wsle.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">9,071,862</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.70</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.79</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Aust. Share Fund A/C&#062;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">15</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Citicorp Nominees Pty Ltd &#060;CFS Wsle.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">7,295,370</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.56</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.64</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Imputation Fund A/C&#062;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">16</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Public Officers Super Fund</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6,666,333</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.51</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.58</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">17</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Citicorp Nominees Pty Ltd &#060;CFS Wsle.</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5,504,744</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.42</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.48</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Gbl. Res. Fund A/C&#062;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">18</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Tower Australia Limited</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5,041,962</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.39</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.44</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">19</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Citicorp Nominees Pty Ltd &#060;CFS</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,785,085</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.29</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.33</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Imputation Fund A/C&#062;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">20</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">Merrill Lynch (Australia) Nominees Pty Ltd</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,351,187</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.29</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.29</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="center" nowrap colspan="2"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="center" nowrap colspan="2"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="center" nowrap colspan="2"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,092,179,989</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">83.77</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">95.59</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="center" nowrap colspan="2"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="center" nowrap colspan="2"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="center" nowrap colspan="2"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">Note 1.
</FONT>
<P align="left"><FONT size="2">The percentages in this column reflect a denominator of 1,303,861,620
representing Lihir&#146;s total issued shares including the 161,527,405 shares owned
by Niugini Mining Limited.
</FONT>
<P align="left"><FONT size="2">Note 2.
</FONT>
<P align="left"><FONT size="2">The percentages in this column reflect a denominator of 1,142,334,215
representing Lihir&#146;s total issued shares excluding the 161,527,405 shares owned
by Niugini Mining Limited and subsequently converted to Class&nbsp;B shares.
</FONT>
<P align="left"><FONT size="2">Note 3.
</FONT>
<P align="left"><FONT size="2">The following table sets out, as of March&nbsp;31, 2003, persons notified to the
company pursuant to the PNG Securities Act 1997 as substantial shareholders of
the company. Under the Securities Act 1997 a person is a substantial
shareholder if they have a relevant interest in 5% or more of a class of voting
share in Lihir Gold
</FONT>
<P align="center"><FONT size="2">80</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="left"><FONT size="2">Limited. Changes of greater than 1% in the relevant interest of a substantial
shareholder must also be notified. The definition of &#147;relevant interest&#148; looks
not merely to beneficial ownership of a share but extends to and includes: 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; and possession of the
above powers by virtue of any trust, arrangement, agreement or understanding.
The total notified amount of voting securities owned by directors and officers
of the company as a group was 255,300 ordinary shares representing 0.000196% of
issued ordinary shares.
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%">
<TR valign="bottom">
    <TD width="69%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Name of Substantial Shareholder</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>Relevant interest</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>Percentage <sup>(1)</sup></B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="2"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="2"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Rio Tinto plc</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">185,758,126</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">16.26</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Rio Tinto International Holdings Limited</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">185,758,126</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">16.26</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Rio Tinto Overseas Holdings Limited</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">185,758,126</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">16.26</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Rio Tinto Lihir Holdings Limited</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">185,758,126</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">16.26</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Rio Tinto Metals Limited</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">185,758,126</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">16.26</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Rio Tinto European Holdings Limited</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">185,758,126</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">16.26</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Each of Rio Tinto plc&#146;s subsidiaries
other than Rio Tinto International
Holdings Limited, Rio Tinto Overseas
Holdings Limited, Rio Tinto Lihir
Holdings Limited, Rio Tinto Metals
Limited and Rio Tinto European Holdings
Limited</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">185,758,126</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">16.26</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Mineral Resources Lihir Limited</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">77,169,431</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6.76</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Commonwealth Bank of Australia</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">57,960,753</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5.07</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">M&#038;G Investment Management Limited
M&#038;G Limited
M&#038;G Group Limited
Prudential plc</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">55,500,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4.85</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">Note 1.
</FONT>
<P align="left"><FONT size="2">The percentages in this column reflect a denominator of 1,142,334,215
representing Lihir&#146;s total issued shares excluding the 161,527,405 shares owned
by Niugini Mining Limited and subsequently converted to Class&nbsp;B shares.
</FONT>
<P align="left"><FONT size="2">The shares held by Lihir&#146;s major shareholders command no different voting
rights to any other shares, other than the Class&nbsp;B shares owned by Niugini
Mining Limited which have no voting rights.
</FONT>
<P align="center"><FONT size="2">81</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="left"><FONT size="2"><B>American Depositary Shares and US Resident Shareholders</B>
</FONT>
<P align="left"><FONT size="2">A portion of Lihir&#146;s ADSs are traded on the Nasdaq National Market. In the
United States, each ADS evidenced by an American Depositary Receipt represents
20 fully paid ordinary shares of the company. The listed ADRs are issued
pursuant to a Deposit Agreement in 1995 between the company and the Listed
Depositary &#151; The Bank of New York.
</FONT>
<P align="left"><FONT size="2">On February&nbsp;28, 2003, 1,615,040 ADSs (2002: 725,148) representing 32,300,800
ordinary shares were held by 18 (2002: 13) registered holders under the Nasdaq
- listed ADR program. The company also has a restricted ADR program following
the October 1999 placement of shares under which there are 400,000 ADS at
February&nbsp;28, 2003 (2002: 470,000) representing 8,000,000 ordinary shares held
by 13 (2002: 14) registered holders. The restricted ADR are issued pursuant to
a Deposit Agreement entered in October 1999 between the company and the
Restricted Depositary &#151; The Bank of New York.
</FONT>
<P align="left"><FONT size="2">Also on March&nbsp;31, 2003, there were 61 holders of ordinary shares (2002: 65)
with declared addresses in the United States holding 763,875 (2001: 723,844)
ordinary shares. In addition, there are a number of United States shareholders
who hold beneficial ownership through nominee companies located outside the
United States.
</FONT>
<P align="left"><FONT size="2"><B>Share Options</B>
</FONT>

<P align="left"><FONT size="2">No options remained outstanding as at 31 December 2002.
</FONT>
<P align="left"><FONT size="2">There are no arrangements known to the company, the operation of which may at a
subsequent date result in a change in control of the company.
</FONT>
<!-- link3 "B. Related Party Transactions" -->
<DIV align="left"><A NAME="028"></A></DIV>
<P align="left"><FONT size="2"><B><I>B. Related Party Transactions</I></B>
</FONT>
<P align="left"><FONT size="2"><B>Interests of Directors in Certain transactions</B>
</FONT>

<P align="left"><FONT size="2">John O&#146;Reilly is a Director of Lihir Management Company which has a management
agreement with the company whereby Lihir Management Company is required to
manage the corporate affairs of the company and all aspects of the Lihir
operation.
</FONT>
<P align="left"><FONT size="2">The socioeconomic structure of Lihir Island is divided into six major clans
representing the indigenous population of Lihir Island. Mark Soipang is a
senior member of one of those clans, the Tinetalgo clan, which has various
companies including Alia Ltd and Tinetalgo Investments Ltd of which Mark
Soipang is a director. Additionally, Mark Soipang is a senior member of the
Maron Hamlet, which was relocated from its land to make way for the mine. The
Maron Hamlet is represented by a company, Maron Ltd, of which Mark Soipang is a
director. As a leader on Lihir Island, Mark Soipang also is a director and the
Chairman of the Lihir Mining Area Landowners Association Inc. and a Director of
Lakaka Limited, which is one of the main business development companies on
Lihir Island and which is owned by the Lihirian clans and people. The company
has a number of contracts with the above parties. Lakaka Limited and its
subsidiaries have contracts from the company which include earthmoving services
and road maintenance. Lakaka Limited is a 50% owner of a joint venture
company, Aelium Ltd, which constructed the company and government housing at
Londolovit. Mark Soipang is a director of Aelium Ltd. The company has also
issued various sub-leases to Lihir Properties Ltd (receiver and manager
appointed), a subsidiary of Lakaka Limited, and approved the grant of further
sub-sub leases to joint venture companies of Lakaka Limited in the Commercial
Area at Londolovit and a residential block at Londolovit
</FONT>
<P align="center"><FONT size="2">82</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="left"><FONT size="2">Heights. Mark Soipang is a director of Niolam Catering Services Ltd, which
operates the company&#146;s camps, including the catering and warehousing functions,
and which is partly owned by Lakaka Limited and by Tinetalgo Investments Ltd.
The company has issued a lease of land in the commercial area of Londolovit and
three residential blocks of land at Londolovit Heights on Lease for Mining
Purposes-34 to Maron Ltd. Those leases were provided as part of the company&#146;s
obligations on the relocation of the Maron Hamlet. The company has issued a
lease for a parcel of land in the Londolovit commercial area to Alia Ltd. The
company supplies office accommodation and a vehicle to the Lihir Mining Area
Landowners Association Inc. of which Mark Soipang is the chairman and which was
provided funding by the company during the year for its operating expenses.
Tinetalgo Investments Ltd owns a one-sixth interest in Kuridala Ltd to which
the company contributed funds and holds redeemable preference shares. The
above contracts and transactions involving entities with which Mark Soipang is
associated were in most cases entered into by Lihir Management Company for and
on behalf of the company and were fully disclosed and known to Lihir Management
Company at the time of entering the contract and transactions. Mark Soipang
did not take part in the decision to award the contracts and transactions. The
company is satisfied that the contracts were entered on arms length terms.
Mark Soipang resigned from the Lihir Gold Board on the March&nbsp;7, 2003.
</FONT>
<P align="left"><FONT size="2">Lihir provided debt to the Lakaka group and to Kuridala during the year as
disclosed in note 10. There is no exposure to losses in these companies apart
from the credit risk exposure for amounts owed. All the amounts advanced are
deemed to be recoverable.
</FONT>
<P align="left"><FONT size="2">The company has contracted for the services of Dr Ross Garnaut as Chairman of
the company until April&nbsp;30, 2004. The contract is with Dr Garnaut&#146;s family
company, Maccullochella Pty Limited, which employs him but Dr Garnaut has also
agreed to be bound by its terms.
</FONT>
<P align="left"><FONT size="2">Sir Anthony Siaguru, Deputy Chairman of the company, is employed in a
consulting capacity by Blake Dawson Waldron, who provide legal services to the
company.
</FONT>
<P align="left"><FONT size="2">The interests of the directors listed above were disclosed to the company prior
to the company entering into the relevant contracts. Other than in relation to
the management agreement with Lihir Management Company, the directors concerned
did not take part in discussions on or voting in relation to the company&#146;s
decision to enter into the contracts and directors are satisfied the contracts
are on arm&#146;s length terms.
</FONT>
<!-- link3 "C. Interests of Experts and Counsel" -->
<DIV align="left"><A NAME="029"></A></DIV>
<P align="left"><FONT size="2"><B><I>C. Interests of Experts and Counsel</I></B>
</FONT>
<P align="left"><FONT size="2">Not applicable.
</FONT>
<P align="center"><FONT size="2">83</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<!-- link2 "Item&nbsp;8. Financial Information" -->
<DIV align="left"><A NAME="030"></A></DIV>
<P align="left"><FONT size="2"><B>Item&nbsp;8. Financial Information</B>
</FONT>

<!-- link3 "A. Consolidated statements and other financial information" -->
<DIV align="left"><A NAME="031"></A></DIV>
<P align="left"><FONT size="2"><B><I>A. Consolidated statements and other financial information</I></B>
</FONT>
<P align="left"><FONT size="2">These have been incorporated in the financial statements section of this report
at Item&nbsp;18.
</FONT>
<P align="left"><FONT size="2"><B>Export Activities</B>
</FONT>

<P align="left"><FONT size="2">Under the new refining arrangements with AGR Mathey, gold is now refined in
Australia under a toll treating arrangement. On the completion of the refining
process gold is credited to the company&#146;s bullion account for ultimate sale.
</FONT>
<P align="left"><FONT size="2"><B>Legal or arbitration proceedings</B>
</FONT>

<P align="left"><FONT size="2">In December 2000 the Company&#146;s wholly owned subsidiary &#151; Niugini Mining
(Australia) Pty Limited &#151; terminated a sales agreement for seven mining leases
located in North Queensland. The purchaser commenced an action against Niugini
Mining (Australia) Pty Limited in the Supreme Court of Queensland, seeking to
have the termination revoked and unspecified damages.
</FONT>
<P align="left"><FONT size="2">The action was struck out by the court in October 2001 because of the
purchaser&#146;s failure to prosecute its action against Niugini Mining (Australia)
Pty Limited. The purchaser is free to lodge a new action and threatened to do
so in mid-2002, however, at the time of publication, has not done so. In March
2003, Niugini Mining (Australia) Pty Ltd sold its North Queensland assets,
including the seven mining leases, to Kagara Pty Limited, which is aware of the
previous litigation.
</FONT>
<P align="left"><FONT size="2">In June 2001 Niugini Mining (Australia) Pty Limited became a party to a native
title claim over some of its mining tenements in North Queensland. The company
is currently arranging to withdraw from that native title claim following sale
of its relevant interests to Kagara Zinc Limited.
</FONT>
<P align="left"><FONT size="2">Niugini Mining Limited received claims for unspecified damages relating to the
decommissioned Mt Victor mine in Papua New Guinea. These claims date back
several years and the Company is seeking to have them removed from the court
list, as they have not been pursued. The Company believes from legal advice
obtained that neither of these claims has substance and, if required, intends
to defend both vigorously
</FONT>
<P align="left"><FONT size="2"><B>Dividend Distributions</B>
</FONT>

<P align="left"><FONT size="2">Lihir declared its maiden dividend of 2 Australian cents per ordinary share in
April 2003. The board will regularly consider future dividend distributions
and make returns to shareholders at a time and amount which, in the board&#146;s
opinion, the financial circumstances of the company justify.
</FONT>
<P align="center"><FONT size="2">84</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<!-- link3 "B. Significant Changes" -->
<DIV align="left"><A NAME="032"></A></DIV>
<P align="left"><FONT size="2"><B><I>B. Significant Changes</I></B>
</FONT>
<P align="left"><FONT size="2">No significant change in the state of the business has occurred since the date
of the annual financial statements as at December&nbsp;31, 2002.
</FONT>
<!-- link2 "Item&nbsp;9. The Offer and Listing" -->
<DIV align="left"><A NAME="033"></A></DIV>
<P align="left"><FONT size="2"><B>Item&nbsp;9. The Offer and Listing</B>
</FONT>

<P align="left"><FONT size="2">Since the global offering in October 1995, the ordinary shares have traded on
the Australian Stock Exchange Limited (ASX)&nbsp;and on SEAQ International, the
London Stock Exchange&#146;s system for trading international equity securities that
are not listed on that exchange and the ADSs have traded on the Nasdaq National
Market. The ASX is the national stock exchange in Australia.
</FONT>
<P align="left"><FONT size="2">The following tables sets forth for the periods indicated the highest and
lowest market quotations for ordinary shares reported on the Daily Official
List of the ASX and the highest and lowest prices for ADSs quoted on Nasdaq.
Each ADS represents 20 fully paid ordinary shares in Lihir.
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%">
<TR valign="bottom">
    <TD width="14%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>By Fiscal Year</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="6"><FONT size="1"><B>Ordinary Shares</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="6"><FONT size="1"><B>American Depositary Shares</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="6"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="6"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>High</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>Low</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>High</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>Low</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">A$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">A$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="center"><FONT size="2">US$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="center"><FONT size="2">US$</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">1996</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2.59</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.46</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">40 3/4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" nowrap><FONT size="2">21 7/8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">1997</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2.44</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.40</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" nowrap><FONT size="2">38 1/4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">19</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">1998</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2.76</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.46</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" nowrap><FONT size="2">36 3/8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">18 3/4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">1999</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.95</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.90</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" nowrap><FONT size="2">23 1/2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">9 1/2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2000</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.12</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.52</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">13 3/4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5 1/2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2001</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.28</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.54</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">12 13/14</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5 7/16</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2002</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.65</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.02</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">19 1/8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">11 1/2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%">
<TR valign="bottom">
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center" colspan="5"><FONT size="1"><B>By Quarter</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="6"><FONT size="1"><B>Ordinary Shares</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="6"><FONT size="1"><B>American Depositary Shares</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="5"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="6"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="6"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>Quarter Ending</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>High</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>Low</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>High</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>Low</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">A$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">A$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="center"><FONT size="2">US$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="center"><FONT size="2">US$</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">1999</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">March 31</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.87</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.18</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" nowrap><FONT size="2">23 1/4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" nowrap><FONT size="2">16 1/2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">June 30</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.71</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.90</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">20</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" nowrap><FONT size="2">13 7/8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">September 30</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.95</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.03</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" nowrap><FONT size="2">17 3/4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" nowrap><FONT size="2">12 1/2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">December 31</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.82</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.06</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" nowrap><FONT size="2">23 1/2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">9 1/2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2000</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">March 31</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.12</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.63</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">13 3/4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">7 5/8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">June 30</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.71</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.52</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">7 3/4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6 1/8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">September 30</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.78</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.58</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6 1/4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">December 31</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.69</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.53</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">7 4/9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5 1/2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2001</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">March 31</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.72</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.54</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">7 1/4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap  align="right"><FONT size="2">5 11/14</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">June 30</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.02</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.59</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">10 7/8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5 7/16</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">September 30</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.16</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.79</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">11 1/2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">8 5/8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">December 31</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.28</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap  align="right"><FONT size="2">12 15/16</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">8 7/8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2002</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">March 31</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.62</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.18</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">16 1/2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">12 1/8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">June 30</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.65</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.15</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">19 1/8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">12 1/2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">September 30</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.38</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.02</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">15 3/4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">11 1/2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">December 31</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.49</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.06</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap  align="right"><FONT size="2">16 9/16</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">12</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2002</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left"><FONT size="2">March 31</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.60</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.30</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">19 1/2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">15.1/8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">85</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%">
<TR valign="bottom">
    <TD width="32%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>By Month</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="6"><FONT size="1"><B>Ordinary Shares</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="6"><FONT size="1"><B>American Depositary Shares</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="6"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="6"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>High</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>Low</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>High</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>Low</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">A$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">A$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="center"><FONT size="2">US$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="center"><FONT size="2">US$</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">November 2002</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.20</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.04</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" nowrap><FONT size="2">13 15/16</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" nowrap><FONT size="2">12 1/8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">December 2002</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.49</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.12</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" nowrap><FONT size="2">16 9/16</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" nowrap><FONT size="2">12 1/2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">January 2003</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.41</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.18</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" nowrap><FONT size="2">19 1/2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" nowrap><FONT size="2">15 7/8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">February 2003</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.60</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.34</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" nowrap><FONT size="2">18 7/16</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" nowrap><FONT size="2">15 11/16</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">March 2003</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.47</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.30</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" nowrap><FONT size="2">18 1/8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" nowrap><FONT size="2">15 1/8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">April 2003</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">The last reported sale price of the ordinary shares on the ASX on March&nbsp;31,
2003 was A$1.35. The last reported sale price of the ADSs on Nasdaq on March
31, 2003 was US$16 5/16.
</FONT>
<P align="left"><FONT size="2">At March&nbsp;31, 2003, the total market capitalization of the company (excluding
the shares held by Niugini Mining Limited) was A$1,324&nbsp;million.
</FONT>
<P align="left"><FONT size="2">The company is also listed on the Port Moresby Stock Exchange (Market Code
&#147;LHG&#148;).
</FONT>
<P align="left"><FONT size="2">The company&#146;s securities consist of ordinary shares. No options remain
outstanding. The shares have no par value. All issued shares are fully paid.
</FONT>
<P align="center"><FONT size="2">86</FONT>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<!-- link2 "Item&nbsp;10. Additional Information" -->
<DIV align="left"><A NAME="034"></A></DIV>

<P align="left"><FONT size="2"><B>Item&nbsp;10. Additional Information</B>
</FONT>

<!-- link3 "A. Share Capital" -->
<DIV align="left"><A NAME="035"></A></DIV>
<P align="left"><FONT size="2"><B><I>A. Share Capital</I></B>
</FONT>
<P align="left"><FONT size="2">Not applicable.
</FONT>
<!-- link3 "B. Memorandum and Articles of Association" -->
<DIV align="left"><A NAME="036"></A></DIV>
<P align="left"><FONT size="2"><B><I>B. Memorandum and Articles of Association</I></B>
</FONT>
<P align="left"><FONT size="2">As a result of the promulgation of the PNG Companies Act 1997 the memorandum
and articles of association of Lihir have been replaced by a constitution. A
copy of the latter is lodged with the Registrar of Companies in Port Moresby,
Papua New Guinea and a copy is attached as Exhibit&nbsp;1 to this annual report.
The constitution is summarized below. The company&#146;s objects and purposes are
no longer specifically defined. Companies incorporated in PNG are generally
accorded all the powers of a natural person.
</FONT>
<P align="left"><FONT size="2"><B>PNG Companies and Securities Law</B>
</FONT>

<P align="left"><FONT size="2">On March&nbsp;27, 1997 the Papua New Guinea Parliament passed the Companies Act 1997
which, subject to six-month transitional provisions, replaced the Companies Act
(Chapter&nbsp;146) that has applied in Papua New Guinea since 1964. The Act
commenced operation on March&nbsp;2, 1998. At the Annual General Meeting of the
company held on April&nbsp;28, 1998 shareholders approved registration of the
company under the PNG Companies Act 1997 and the company was registered
effective May&nbsp;15, 1998, with the PNG Companies Act 1997 applying to the company
from that date. The PNG Companies Act 1997 is based on the New Zealand
Companies Act 1993. As part of the registration process, shareholders at the
Annual General Meeting of the company held on April&nbsp;28, 1998 adopted a new
constitution in replacement of the articles of association and memorandum of
association of the company. The new constitution was modelled on the company&#146;s
then memorandum of association and articles of association. In general, the
changes under the new constitution either:
</FONT>
<P align="left"><FONT size="2">(i)&nbsp; reflect changes made under the new Companies Act 1997 (e.g. 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
</FONT>
<P align="left"><FONT size="2">(ii)&nbsp; take advantage of specific provisions of the new Act which allow the
company to take a course of action (e.g. to buy back the company&#146;s shares, to
indemnify directors or to pay for D&#038;O liability insurance) if expressly
permitted to do so by its constitution.
</FONT>
<P align="left"><FONT size="2">The new Companies Act 1997 introduced significant changes to shareholders&#146;
rights and duties and to the duties, liabilities and obligations of directors.
</FONT>
<P align="left"><FONT size="2">The PNG Securities Act 1997 also commenced operation on March&nbsp;2, 1998. The
Securities Act 1997 governs the offering of securities to the public in PNG.
The Securities Act also brings key changes to corporate regulation in Papua New
Guinea. The Securities Act deals with the requirements for a prospectus
prepared in connection with the offering of securities. The Securities Act
also contains a range of laws regulating the operation of the securities market
in PNG including; stock market manipulation laws; false trading and market
rigging transactions; false or misleading statements in relation to securities;
fraudulently inducing persons to deal in securities; and disseminating
information about illegal transactions. The Securities Act 1997 contains a
prohibition against insider trading. The Securities Act also contains
provisions dealing with the disclosure of
</FONT>
<P align="center"><FONT size="2">87</FONT>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="left"><FONT size="2">substantial shareholdings which require the giving of notice where a
shareholder has a relevant interest in at least five percent of the shares of a
listed company. A substantial shareholder is also required to give notice of
changes in his or her relevant interest of one per cent or more in the relevant
class of shares. There are also provisions to allow a company to require the
disclosure of the beneficial owners of shares in the company. The substantial
shareholder provisions and the provisions dealing with the disclosure of
beneficial interests have been in effect in relation to the company since
September&nbsp;28, 1998.
</FONT>
<P align="left"><FONT size="2">A PNG takeovers code, approved under the provision of the Securities Act has
also applied to the company since September&nbsp;28, 1998. The fundamental rule
under the Takeovers Code prevents any person from having a relevant interest of
more than 20% of the voting rights in a target company, except in a manner
permitted by the Code. There are no controls below the threshold of 20%. The
definition of relevant interest relevant to the Takeovers Code and the
substantial shareholder provisions of the Securities Act 1997 looks not merely
to beneficial ownership of a share but extends to and includes:
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">the power to control the exercise of any right to vote attached to a voting share</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">the power to acquire or dispose of the voting share</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">or having the above powers by virtue of any trust, arrangement, agreement or understanding.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2"><B>Constitution</B>
</FONT>

<P align="left"><FONT size="2">The following is a summary of the main points of the company&#146;s constitution.
References to clauses refer to clauses in the constitution.
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">The company is incorporated and registered in Papua New Guinea (Number C1-23423) and is a registered foreign
company in Australia (ARBN 069 803 998). Under section 17 of the Companies Act 1997 (PNG)&nbsp;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.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">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 Act, the Official Listing Rules of the Australian Stock Exchange permit
and the Board does not otherwise determine.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">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.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">There are no specific provisions relating to borrowing powers in the constitution. Clause 20.1 provides that the board has
all necessary power for managing, and for directing and supervising the management of, the business and affairs of the
company to the exclusion of the Shareholders and in accordance with clause 21.9 every resolution of the board is decided by
a majority of votes. Therefore, the borrowing by the company is determined by a majority decision of the board.</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">88</FONT>
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<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">An exercise of the borrowing power may in certain circumstances be subject to the provisions of the Act (section 110)
requiring shareholder approval for major transactions.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">There are no provisions for retirement or non-retirement of directors under an age limit in the constitution.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Clause 15.5 provides that a director of the company need not be a shareholder.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Clause 10A.2(b) provides that Class&nbsp;B shares have no entitlement to dividends.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Clause 24.1 provides that the Board may declare distributions to the Shareholders (other than Class&nbsp;B shareholders)
including declaring the property to constitute the distribution and the time of the distribution. Shareholder approval is
not required to 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.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">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.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">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.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Clause 10A.2(a) provides that the Class&nbsp;B Shareholders do not have any voting rights.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">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.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Clause 5.6 provides that where a call in relation to a share is due and payable and not paid the shareholder has
no right to vote.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Under clause 15.3, one third of the directors retire by rotation each year and are eligible for re-election.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">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. The company does not have any partly paid shares on issue.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Clause 10A.2(d) provides that the Class&nbsp;B shares are redeemable at the option of the company for consideration of
K100 per million of those shares.</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">89</FONT>
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<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Clause 2.6(b) provides that the company is authorised to redeem any redeemable shares subject to the provisions of
the Listing Rules and the business rules of securities clearing house of Australia.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">There are no provisions in the constitution in regard to sinking funds.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">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 fixed time. The company does not have any partly paid
shares on issue. The constitution does not expose the shareholders to any liability to further capital calls by the
company.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">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.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Under the PNG 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.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">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.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">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.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">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.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">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 special meeting as provided by section 102(b) of
the Act which requires a written request of shareholders holding shares carrying not less than 5% of the voting rights.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Clause 11.2 provides that the company must hold an annual general meeting in accordance with the Act which must be
held not later than 15&nbsp;months after the previous annual general meeting.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">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 a special resolution and, if required by the Australian Stock Exchange
Listing Rules, include a form of proxy.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">All shareholders (including Class&nbsp;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.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">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</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">90</FONT>
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<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">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.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">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.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">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).</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">There are no provisions in the constitution governing the ownership
threshold above which shareholder ownership must be disclosed.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">The company is incorporated, and has its principal activities, in
Papua New Guinea. As such it is subject to the Act, the Securities
Act of Papua New Guinea and the Takeovers Code under the Securities
Act. The general effect of this legislation is referred to elsewhere
in this Form&nbsp;20-F.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">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. The conditions in this regard
are no more stringent than is required by law. There are no
pre-emptive rights of existing shareholders.</FONT></TD>
</TR>
</TABLE>
<!-- link3 "C. Material Contracts" -->
<DIV align="left"><A NAME="037"></A></DIV>
<P align="left"><FONT size="2"><B><I>C. Material Contracts</I></B>
</FONT>
<P align="left"><FONT size="2"><B>Lihir Management</B>
</FONT>

<P align="left"><FONT size="2"><B><I>General. </I></B>At December&nbsp;31, 2002 Lihir Management Company employed 978 full-time
employees for the Lihir operation. Lihir Management Company has entered into
the Technical Support Agreement with Rio Tinto pursuant to which it is able to
periodically supplement its expertise by drawing on experienced engineering,
construction and operations personnel from other Rio Tinto owned or controlled
businesses from around the world. See &#147;Technical Support Agreement&#148; below.
</FONT>
<P align="left"><FONT size="2">The Lihir Management Company team includes engineering, construction and
operations personnel. The senior members of the management team have extensive
experience in mining operations.
</FONT>
<P align="left"><FONT size="2"><B><I>Management Agreement. </I></B>While the company&#146;s board of directors has ultimate
control and responsibility for all of the company&#146;s operations and the exercise
of all the company&#146;s powers and rights, pursuant to the management agreement
the board of directors has delegated to Lihir Management Company the authority
and responsibility to manage the corporate affairs of the company, the
construction and operation of the Lihir operation, any exploration activities
undertaken by the company in the Lihir Group of islands and any other
operations and activities of the company. Subject to the restrictions described
below, Lihir Management, in particular, is permitted to enter into contracts on
behalf of the company and to pay, out of the company&#146;s funds, all costs and
expenses incurred by it in connection with its role as manager of the Lihir
operation, including, without limitation, the salaries and other compensation
payable to Lihir Management Company personnel and the monthly management fee
referred to below. In addition, Lihir Management Company is permitted to
contract for the performance of its duties under the management agreement;
provided, however, that any contracts with a related
</FONT>
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<P align="left"><FONT size="2">corporation of the manager must be on ordinary commercial terms and at a cost
no greater than that of obtaining the services from a contractor independent of
the related corporations.
</FONT>
<P align="left"><FONT size="2">Lihir Management Company&#146;s discretion to manage the Lihir operation is limited
in certain respects. Lihir Management Company cannot, without the approval of
the company&#146;s board, incur any individual capital expenditure in excess of
US$3,000,000 except in accordance with a budget approved by Lihir&#146;s board of
directors or incur any expenditure either in excess of 110% of an approved
budget (except in emergency circumstances) or in excess of US$10,000,000 other
than in accordance with an approved budget. In addition, Lihir Management
Company may not at any time, without the approval of the company&#146;s board:
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">approve any contract with a value greater than US$1,000,000 with a corporation related to it or with any other party for a term of more than one year and a value in excess of US$5,000,000</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">approve any financial or operating lease for terms exceeding one year with capitalized values in excess of US$5,000,000</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">settle any litigation or arbitration that would require the company to pay any amount in excess of US$500,000</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">dispose of any of the company&#146;s property having an original cost, or being sold at a price, greater than US$5,000,000</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">dispose of the special mining lease or any portion or all of the exploration license</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">suspend operations or resume operations after any suspension except as permitted by the mining development contract</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">make any changes in the approved proposal for development except as permitted thereunder</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">undertake any business or exploration not contemplated in the approved proposal for development</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">make voluntary pre-payments or alter the terms of any debt financing facility of the company.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">All dollar amounts referred to in this paragraph are increased as of January 1
of each year (beginning January&nbsp;1, 1997) by the application of the implicit
price deflator of the U.S. Gross National Product.
</FONT>
<P align="left"><FONT size="2">The board of directors has delegated all of its responsibilities with respect
to the company other than the responsibility to:
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">nominate directors to the board of directors and to appoint the chairman of the board of directors</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">commit the company to raise equity or to borrow funds and to approve any documents under which securities may be issued</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">determine treasury policies including foreign currency and interest rate exposure as well as to determine risk management policies</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">92</FONT>
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<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">approve interim and annual reports, engage auditors and set accounting policies</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">determine dividend policies and approve dividends</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">engage auditors to review and report to the board on the company&#146;s internal controls and compliance with statutory and regulatory requirements.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">Lihir Management Company is currently paid a monthly management fee equal to
the greater of US$250,000 (adjusted annually by the implicit price deflator for
the US Gross National Product) or 1.5% of the average monthly operating costs
of the Lihir operation during the preceding three months. In addition, Lihir
Management Company is entitled to receive 1% of all costs incurred on any
expansion involving capital expenditures greater than US$50&nbsp;million. For
purposes of the foregoing, all capital and operating costs are calculated
excluding the management fee paid or payable to Lihir Management. The
company&#146;s obligation to pay the management fee will be suspended 12&nbsp;months
after mining operations have been suspended as a result of certain specified
events of force majeure and one month after mining operations are suspended for
any other reason.
</FONT>
<P align="left"><FONT size="2">The appointment of Lihir Management Company as the manager of the Lihir
operation shall continue during the term of the mining development contract
unless the management agreement is earlier terminated. The company can
terminate the management agreement for specified reasons, including certain
events of insolvency of Lihir Management, any breach by Lihir Management
Company of the terms of the management agreement or if Rio Tinto (directly or
indirectly) ceases to hold at least 15% of the issued shares of the company or
Lihir Management Company ceases to be a wholly owned subsidiary of Rio Tinto
or, upon six months notice, after the management agreement has been in effect
for 20&nbsp;years. In addition, Lihir Management Company may terminate the
management agreement upon six months notice after the later of 10&nbsp;years after
the date of the agreement and the repayment of all loans to the company, the
terms of which require management of the Lihir operation by a related
corporation of Rio Tinto.
</FONT>
<P align="left"><FONT size="2">The management agreement provides that none of Lihir Management Company, Rio
Tinto, subsidiaries of Rio Tinto, or any of their respective directors,
officers, employees, agents and representatives shall be liable to the company
for, and all such entities and persons are indemnified and held harmless by the
company against any costs, losses, claims, damages or liabilities
(collectively, &#147;Losses&#148;) incurred, suffered or done in the course of the
discharge of or arising in any way from, or in connection with the failure by
the manager to discharge its duties under the management agreement, unless they
result from the manager&#146;s willful omission or willful misconduct (each as
defined therein). No such liability can result from a breach of the management
agreement if the breach would not have occurred if Lihir Management Company had
not acted upon or omitted to act following the instructions of or in accordance
with any decision or determination by the board of directors. The company is
indemnified by Lihir Management Company for losses that are the result of the
manager&#146;s willful omission or willful misconduct.
</FONT>
<P align="left"><FONT size="2">Lihir&#146;s lenders have required as a condition of financing that the Lihir
operation continue to be managed by Rio Tinto or one of its wholly owned and
controlled affiliates. This is a condition to borrowings under both the
previous loan agreement and the current syndicated facility agreement, and any
failure by Rio Tinto to wholly own or control Lihir Management Company will
constitute a review event under the syndicated facility agreement.
</FONT>
<P align="left"><FONT size="2"><B><I>Guarantee of Financial Obligations under Management Contract. </I></B>Lihir Management
Company is a wholly owned subsidiary of Rio Tinto Western Holdings Limited,
which is wholly owned by Rio Tinto plc. Rio Tinto Western Holdings Limited
issued a guarantee dated May&nbsp;22, 1995, in favor of Lihir, of the financial
obligations of Lihir Management Company under the management agreement. The
guarantee may not be terminated by the guarantor while Lihir Management Company
has any financial liability to the company under the management
</FONT>
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<P align="left"><FONT size="2">agreement. The guarantee does not apply to financial obligations arising from
acts or omissions of Lihir Management Company after Lihir Management Company
has ceased to be a subsidiary of the guarantor provided the guarantor has
procured an acceptable replacement guarantee from another guarantor acceptable
to the company. The guarantee is not a guarantee of Lihir Management&#146;s
performance under the management agreement.
</FONT>
<P align="left"><FONT size="2"><B><I>Technical Support Agreement. </I></B>Arising from the technical support agreement, Rio
Tinto has agreed to provide to Lihir Management Company from its own resources,
or the resources of other members of the Rio Tinto Group, upon Lihir
Management&#146;s request, all advice and personnel as may be required to enable
Lihir Management Company to discharge its duties as manager under the
management agreement.
</FONT>
<P align="left"><FONT size="2">In the technical support agreement, Rio Tinto has agreed to provide a variety
of personnel to assist Lihir Management. At a flat rate (subject to increases
for inflation) of US$600 per person per day (plus travel and accommodation
costs), Rio Tinto will provide contract services for such matters as ore
reserves, mine engineering, geothermal issues, metallurgy, general engineering,
infrastructure and financial analysis. In addition to these contract services,
Rio Tinto provides support for Lihir Management&#146;s treasury, accounting, legal,
mine planning, environment, financing, risk management and other such matters.
For these services Rio Tinto is reimbursed for out-of-pocket travel and
accommodation expenses. Rio Tinto also, from time to time, transfers for a
specified period personnel to Lihir Management Company to serve as senior
management and to perform certain administrative functions and is entitled to
receive from Lihir Management Company an amount equal to the salary and
statutory social security charges in respect of such personnel. The technical
support agreement will remain in force until the termination of the management
agreement or until Lihir Management Company ceases to be a subsidiary of Rio
Tinto.
</FONT>
<P align="left"><FONT size="2"><B>PNG Mining Laws</B>
</FONT>

<P align="left"><FONT size="2">The principal PNG mining laws are the PNG Mining Act, the Mining (Safety) Act
and the Regulations under these acts. The PNG Mining Act provides that &#147;all
minerals existing on, in or below the surface of any land in PNG, including any
materials contained in any water lying on any land in PNG, are the property of&#148;
the PNG Government. The PNG Mining Act also provides for a system of licenses
and leases, pursuant to which persons are permitted to explore for minerals,
develop mines and extract mining products. The Mining (Safety) Act provides for
the regulation and inspection of mines and associated works.
</FONT>
<P align="left"><FONT size="2">In 1990 and 1991, actions were brought in the PNG National Court challenging
the constitutional validity of the prior Mining Act on the grounds that the PNG
Government&#146;s ownership of minerals under privately owned land resulted in an
unjust deprivation of property. The actions were dismissed on procedural
grounds and thus the merits of the challenge were never decided. When the PNG
Mining Act was enacted in June 1992, provisions were included in an attempt to
clarify the constitutional status of any compulsory acquisition of property, or
deprivation of the use or possession of property, which may be effected by or
under the new PNG Mining Act.
</FONT>
<P align="left"><FONT size="2">The company has received advice from its PNG counsel, Blake Dawson Waldron, to
the effect that even if the Special Mining Lease or Exploration License were
determined to result in an unjust deprivation of property, the landowner&#146;s
recourse would be an action for compensation against the PNG Government and
that the validity or legality of the grant of the Special Mining Lease or
Exploration License could not be successfully challenged for this reason.
</FONT>
<P align="center"><FONT size="2">94</FONT>
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<P align="left"><FONT size="2">The principal mining rights for large-scale operations under the PNG Mining Act
are exploration licenses and special mining leases. An exploration license
confers the exclusive right to carry out exploration for minerals for a
two-year period over a defined area. The holder of an exploration license is
required to conduct certain minimum agreed exploration activities during the
term of the license. Assuming it complies with the terms of the exploration
license and submits an acceptable program for the next period, the holder can
generally expect the license to be renewed for additional two-year periods.
However, the holder has no legal right to require such an extension. A mining
lease with respect to property covered by an exploration license can only be
granted to the holder of the license, although the PNG Government is under no
obligation to issue a mining lease and could simply allow the exploration
license to lapse, in which case a mining lease for the property could be
granted to another person.
</FONT>
<P align="left"><FONT size="2">A special mining lease gives tenure to carry out construction and operations.
It can be granted for a term not exceeding 40&nbsp;years, and may be extended for
periods of up to 20&nbsp;years each. Special mining leases can only be granted
after a mining development contract has been negotiated and entered into with
the PNG Government and the PNG Minister for Mining and Petroleum has approved
the proposal for development. In addition, before the land is occupied for
mining purposes, agreement must be reached with the landowners on appropriate
compensation. The holder of the special mining lease is then entitled to the
exclusive occupancy for mining and mining purposes of the land over which it is
granted and owns all minerals lawfully mined from that land. Ownership of
minerals thus passes from the PNG Government to the holder of the special
mining lease at the point when the minerals, or the mineral bearing ores, are
extracted from the ground.
</FONT>
<P align="left"><FONT size="2">The holder of a special mining lease is obligated to pay a royalty to the PNG
Government equal to 2.00% of either the FOB value of the minerals, if they are
exported without smelting or refining in PNG, or the net smelter returns from
the minerals, if they are smelted or refined within PNG. See &#147;Operating and
Financial Review and Prospects&#148;.
</FONT>
<P align="left"><FONT size="2"><B>Related Agreements with PNG Government</B>
</FONT>

<P align="left"><FONT size="2"><B><I>Exploration License. </I></B>The Exploration License, originally issued to the joint
venture, has been renewed on six occasions since its original issue in 1983,
the most recent extension being made from March&nbsp;31, 2000 and expiring on March
31, 2002. This license is in the process of renewal. The Special Mining Lease
has been carved out of the area previously covered by the Exploration License.
For a discussion of exploration licenses generally, see &#147;PNG Mining Laws&#148;
above.
</FONT>
<P align="left"><FONT size="2"><B><I>Special Mining Lease. </I></B>The company holds the Special Mining Lease which gives it
the exclusive right to mine and produce gold and other minerals from the area
of the Luise Caldera immediately adjacent to Luise Harbor, including the
proposed site of the processing plant on Putput Point. It also holds subsidiary
mining rights elsewhere on Lihir Island and an Exploration License which gives
it the exclusive right to explore for gold and other minerals over the rest of
Lihir Island, including Luise Harbor.
</FONT>
<P align="left"><FONT size="2">The Special Mining Lease is governed by the Mining Development Contract. The
Special Mining Lease can be terminated only if the Mining Development Contract
is properly terminated.
</FONT>
<P align="left"><FONT size="2">The Special Mining Lease was originally issued to the joint venture on March
17, 1995. It has a term of 40&nbsp;years, and, under the Mining Act, may be renewed
for subsequent periods of 20&nbsp;years each at the discretion of the PNG
Government. The Lihir operation is currently expected to be completed before
the expiration of the Special Mining Lease.
</FONT>
<P align="center"><FONT size="2">95</FONT>
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<P align="left"><FONT size="2"><B><I>Mining Development Contract. </I></B>The company and the PNG Government entered into
the Mining Development Contract relating to the Lihir operation on March&nbsp;17,
1995.
</FONT>
<P align="left"><FONT size="2">In the Mining Development Contract, the company agreed to use its best efforts
to build and operate the Lihir operation as specified in the Approved Proposal
for Development. The company is permitted to modify the Approved Proposal for
Development without seeking the PNG Government&#146;s permission as long as the
modification substantially complies with the Approved Proposal for Development
submitted by the company. In addition, the PNG Government will be deemed to
have approved all modifications which do not substantially comply with the
Approved Proposal for Development if they do not object to such a modification
within fifteen days of receiving notice of such a change. The PNG Government
has agreed it will not unreasonably withhold its approval of any modification,
and all disagreements are subject to international arbitration. The company has
the right to suspend its operations at any time if, after notice to and
consultation with the PNG Government, the company&#146;s revenues from the Lihir
operation for the three months immediately preceding the date of the notice are
less than the sum of the royalties and operating costs. However, the company
must immediately (and periodically thereafter until the resumption of
operations) report such suspension to the PNG Government and must maintain the
Lihir operation&#146;s assets in good order. After three years of suspended
operations, the PNG Government can compel the company to resume the Lihir
operation unless an independent expert determines that the Lihir operation is
still not economically viable. The PNG Government may raise the issue again 12
months after any such determination by an independent expert.
</FONT>
<P align="left"><FONT size="2">Under the terms of the Mining Development Contract, between three to five years
after the commencement of commercial production the company must commission and
complete within 12&nbsp;months a study into the feasibility of an expansion of the
Lihir operation at a capital cost of at least US$100&nbsp;million (as adjusted by an
inflation factor) and it must discuss the results of this study with the PNG
Government. If the company chooses not to proceed with the expansion, the PNG
Government may at some later date, on 12&nbsp;months notice, require a second
expansion feasibility study to be conducted by the company. While the company
ultimately has the right to decide whether or not to pursue any such expansion,
if it decides not to pursue such an expansion, it has undertaken to stockpile,
for at least two further years, all ore not immediately processed that has a
grade in excess of 1.6 g Au/t. The PNG Government has indicated that after
this two year stockpile of low grade ore has been created, it will permit the
disposal of all material below a break-even cut-off grade.
</FONT>
<P align="left"><FONT size="2">The Mining Development Contract governs the ability of the company to finance
the Lihir operation, to retain sales revenues in foreign currency and to make
payments and distributions in foreign currency. See &#147;PNG Foreign Investment
Laws and Exchange Controls&#148;.
</FONT>
<P align="left"><FONT size="2">The PNG Government has agreed to permit the company to import into PNG all
materials necessary to construct and operate the Lihir operation and that any
taxes or duties will be applied to these materials on a non-discriminatory
basis. In addition, it has agreed to expeditiously approve the work permits and
visas of any expatriate worker needed to work at the Lihir operation.
</FONT>
<P align="left"><FONT size="2">The PNG Government has also agreed to permit the company to export and market
its mine products as it chooses, free of any export duty. Such marketing must
be made on an arm&#146;s length basis and must comply with PNG Government notices
prohibiting sales to buyers in certain jurisdictions on the grounds that such
sales may cause PNG to breach international law or may be prejudicial to the
national security or international relations of PNG.
</FONT>
<P align="left"><FONT size="2">The Mining Development Contract contains several provisions requiring the
company to hire local workers and use local companies. The company must
provide for the training of Papua New Guineans and the replacement of
expatriate employees with Papua New Guineans. In procuring material, equipment
and services for the operations, the company must give certain preferences to
Papua New Guinean contractors and suppliers. The
</FONT>
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<P align="left"><FONT size="2">company must include Papua New Guinea contractors and suppliers in all requests
for bids where the contractor or supplier has the proven ability to perform
similar work within the required time period. If the company receives a bid
from one of these Papua New Guinean contractors or suppliers, it must accept
the bid, if it meets the specifications, is competitive in cost with
international sources and meets the quality, delivery and service requirements
of the Lihir operation. In addition, the company must encourage the
development of local business which might be derived from the project, by
implementing an approved business development plan. Finally, the company may
be required to have up to one-third of its mine products refined at a refinery
located in PNG, provided that the refineries have the capacity and offer
competitive terms and conditions.
</FONT>
<P align="left"><FONT size="2">Under the terms of the Mining Development Contract, the PNG Government and the
company can modify the EP only under certain conditions. See &#147;Environment -
Environmental Plan&#148;.
</FONT>
<P align="left"><FONT size="2">The Mining Development Contract also contains provisions permitting the PNG
Government to purchase any of the installations or infrastructure that are to
be built by the company in connection with the Lihir operation, excluding any
facilities directly used in the mining and processing of the ore, any roads
within the mining site and any administrative buildings or housing. The PNG
Government may elect to either finance the construction of these facilities or
purchase these facilities after their construction by the company. If the PNG
Government decides to finance the building of these facilities, Lihir
Management Company will be responsible for hiring the contractors and
supervising the work to its standards but the PNG Government will pay for and
own the facilities and it may impose a fee on the company for the use of the
facilities, the amount of which is subject to arbitration before a designated
expert if no value can be agreed. If the PNG Government decides to purchase
these facilities after their construction by the company, the sales price will
be equal to residual value after depreciation. If this occurs, the PNG
Government will pay the purchase price in an annual installment equal to the
amount of depreciation the company could have claimed if it still owned the
property. The PNG Government has agreed that this annual payment will be
treated as a capital receipt for PNG income tax purposes. After any such
purchase, the company will be obligated to make an identical payment to the PNG
Government as a usage fee for the property, which the PNG Government has agreed
will be treated as a deductible outgoing for PNG income tax purposes.
</FONT>
<P align="left"><FONT size="2">The Mining Development Contract may be terminated by the PNG Government only if
the Special Mining Lease expires and is not renewed, the company surrenders the
Special Mining Lease (other than for the renewal or extension thereof or for
the issuance of a new Special Mining Lease), the company abandons the Lihir
operation, or if the company materially defaults in the performance of its
significant obligations under the Mining Development Contract. These
significant obligations include the company&#146;s obligations:
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">to construct the mine and commence operations in accordance with the Approved Proposal for Development (including the
environmental plan)</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">not to incur debt in violation of certain coverage tests</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">to convert its foreign currency revenues into Kina, subject to certain exceptions</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">not to keep gold in inventory for a period greater than three months without placing in its Kina bank account an amount
equivalent to the cash value of such gold</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">to comply with PNG Government notices forbidding certain sales of gold</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">to comply with its various obligations to hire PNG employees or suppliers or contractors</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">not to suspend its operations other than as permitted by the Mining Development Contract</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">to comply in all material respects with the EP.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">The PNG Government must begin any termination of the Mining Development
Contract by giving the company a default notice. If the default described in
the notice is not cured within 180&nbsp;days, the PNG Government has the right to
deliver a termination notice which will terminate the agreement and the Special
Mining Lease 30&nbsp;days
</FONT>
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<P align="left"><FONT size="2">later. If the company contests the grounds for the issue of a default notice,
or there is a dispute as to whether a default has been cured, the matter shall
be submitted to arbitration under the United Nations Commission on
International Trade Law Rules. The PNG Government may not deliver a
termination notice to the company while the grounds for the issue of a default
notice are in the arbitration process and any previously delivered termination
notice shall be suspended once an arbitration proceeding commences. If prior
to the date set for termination, a receiver, manager or other administrator is
appointed to act on behalf of any banks in connection with permitted debt
finance, termination cannot occur for at least two years as long as the
administrator complies with the Lihir operation agreements and prevents
deterioration in the Lihir operation facilities.
</FONT>
<P align="left"><FONT size="2">Except for those required to be referred to a special expert, all disputes
under the Mining Development Contract must be arbitrated under the Arbitration
Rules of the United Nations Commission on International Trade Law. The PNG
Government has waived its immunity with respect to enforcement of arbitration
awards. The Mining Development Contract is governed by PNG law.
</FONT>
<P align="left"><FONT size="2"><B>PNG Government Participation</B>
</FONT>

<P align="left"><FONT size="2">The PNG Government has a policy of obtaining an option to acquire, at cost,

equity participation of up to 30% in all mining projects located in PNG. The
PNG Government acquired a 30% interest in the joint venture on March&nbsp;17, 1995
through Mineral Resources Lihir (MRL). MRL is a wholly owned subsidiary of
Mineral Resources Development Company Limited, or MRDC, a PNG company wholly
owned by the PNG Government. MRL exchanged its interest in the joint venture
for an indirect interest in 30% of the ordinary shares of the company
outstanding immediately prior to the consummation of the global offering.
</FONT>
<P align="left"><FONT size="2">Following the offering MRL held a total of 154,338,862 ordinary shares. At
April&nbsp;30, 2000 MRL held 77,169,431 ordinary shares, all held as trustee for the
Lihirian Equity Trust. MRL must remain as trustee of the Lihirian Equity Trust
until such time that the total cost to and indebtedness incurred by MRL for the
purchase of the Lihirian ordinary shares together with interest and costs (the
&#147;Lihirian Share Purchase Debt&#148;) is fully repaid and discharged. After that
time, the Lihirian Equity Trust requires that the Lihirian ordinary shares or
any dividends from such shares must not be sold, charged, mortgaged or
encumbered in any way whatsoever and are maintained for the purposes set out in
the Lihirian Equity Trust.
</FONT>
<P align="left"><FONT size="2">Under the State Equity Acquisition Agreement dated March&nbsp;17, 1995 the PNG
Government expressly waived any rights it might otherwise have to acquire an
equity interest in any additional mineral discoveries made by the company on
Lihir Island pursuant to the Exploration License (or any extension or renewal
thereof) in recognition of the fact that it has already been given the
opportunity to participate in such discoveries through its indirect equity
interest in the company. In connection with an equity offering to institutions
on October&nbsp;7, 1999, Lihir granted an option to MRL (as trustee on behalf of
the Lihirian people) to purchase up to 12,531,170 ordinary shares in the
company. MRL did not exercise the option prior to its expiry date on January
31, 2000. The option has therefore lapsed.
</FONT>
<P align="left"><FONT size="2"><B>Financing Agreements</B>
</FONT>

<P align="left"><FONT size="2">The company funded a portion of the construction of the Lihir operation
pursuant to a loan agreement, dated August&nbsp;18, 1995, between the company and
the 26 banks named therein. The banks agreed to a loan of up to US$300
million, which was drawn down in installments to finance the costs of
developing the Lihir operation,
</FONT>
<P align="center"><FONT size="2">98</FONT>
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<P align="left"><FONT size="2">initial working capital and operating costs and certain other expenses,
including interest on the loan, certain insurance premia and certain financing
costs.
</FONT>
<P align="left"><FONT size="2">This loan agreement and supporting bank financing agreements were terminated by
agreement on November&nbsp;22, 2000 and replaced by a new syndicated facility
agreement. The new loan is in the form of a US$50&nbsp;million revolving credit
facility arranged and underwritten by ABN-AMRO Australia Limited. Commonwealth
Bank of Australia, Deutsche Bank AG, Macquarie Bank Limited and SG Australia
Limited are participating with ABN-AMRO Australia Limited in this facility.
</FONT>
<P align="left"><FONT size="2">The following is a summary of certain provisions of the transaction documents
for the syndicated facility agreement.
</FONT>
<P align="left"><FONT size="2">Lihir has only one other financing arrangement, which was originally a US$26.5
million facility from the European Investment Bank, dated February&nbsp;15, 1996.
This EIB financing is also summarized below.
</FONT>
<P align="left"><FONT size="2">The following summaries do not purport to be complete and are qualified in
their entirety by reference to all of the provisions of the respective
agreement documents, including the definitions used in those agreements.
</FONT>
<P align="left"><FONT size="2"><B><I>Syndicated Facility Agreement  &#151; overview</I></B>
</FONT>
<P align="left"><FONT size="2">The US$50&nbsp;million loan together with US$43&nbsp;million cash generated by the
restructure of Lihir&#146;s hedgebook was used to repay the residual balance of
US$90&nbsp;million on the previous loan agreement. The overall interest rate
reduced from 4.8% over LIBOR in the previous loan agreement to 2.9% over LIBOR
under the new syndicated facility. The new loan expires in June 2005.
</FONT>
<P align="left"><FONT size="2">The facility limit reduces in increments as follows:
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="23%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="23%">&nbsp;</TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">June&nbsp;30, 2003</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="center"><FONT size="2">US$10 million</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">June&nbsp;30, 2004</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="center"><FONT size="2">US$10 million</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">June&nbsp;30, 2005</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="center"><FONT size="2">US$30 million</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2"><B><I>Syndicated Facility Agreement &#151; Documentation, Terms and Conditions</I></B>
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>
<TR valign="top">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&#149; Purpose: The available finance must first be used to repay all sums owing
under the existing senior debt facility. The US$50&nbsp;million revolving credit
would then be available for general corporate purposes, including the
repayment of indebtedness and payment of dividends or return of capital to
shareholders.</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&#149; Pricing:</FONT></TD>
</TR>

</TABLE>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
    <TD width="85%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Interest margin</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.90</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Political risk insurance margin</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="left"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.00</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
    <TD width="100%"></TD>
</TR>
<TR valign="top">
    <TD><FONT size="2">In certain limited circumstances changes in law and official regulations
could increase the interest margin.</FONT></TD>
</TR>

</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>
<TR valign="top">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&#149; Prepayment: The facility can be repaid on any interest payment date
without penalty or at any other time on payment of interest period break
costs, subject to two day&#146;s notice. The undrawn commitment may be cancelled
without penalty on ten day&#146;s notice.</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&#149; Security: The lenders and hedge providers have the benefit of a fixed and
floating charge over the assets of</FONT></TD>
</TR>

</TABLE>
<P align="center"><FONT size="2">99</FONT>
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<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>
<TR valign="top">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">Lihir. Lihir will require the consent of Mineral Resources Development
Corporation (MRDC), EIB and any surviving secured parties (including hedge
providers) to renegotiate or increase its secured debt. The amount of
secured gold hedging can be increased to 80% of proven and probable reserves
and additional hedge providers can be introduced without the consent of the
secured parties.</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&#149; Conditions Precedent: In addition to the consent of MRDC and EIB to
refinance its existing senior project debt facility, the lenders needed to
be satisfied with the results of normal technical and legal due diligence.
Political risk insurance satisfactory to the facility agent needed to be
available for drawings under the facility.</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&#149; Representations and Warranties: Lihir was required to make customary
representations and warranties, including confirmation of compliance in all
material respects with the 1998 World Bank Environmental, Health and Safety
Guidelines, on the day of signing the US$50&nbsp;million syndicated facility
agreement. Certain of these representations and warranties need to be
repeated every six months.</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&#149; Undertakings: Undertakings given by Lihir included:</FONT></TD>
</TR>

</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="93%"><FONT size="2">compliance with the 1998 World Bank Environmental, Health and Safety Guidelines;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="93%"><FONT size="2">restrictions on Lihir&#146;s ability to incur additional financial
indebtedness and to create additional security interests over its
assets;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="93%"><FONT size="2">maintaining gold price hedging between a minimum agreed
profile and 80% of proven and probable reserves; and</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="93%"><FONT size="2">providing to the facility agent and independent engineer each
year the mine plan and cash flow projections used to calculate debt
service cover ratios for financial covenants.</FONT></TD>
</TR>
</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>
<TR valign="top">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&#149; Distributions to subordinated lenders and shareholders: If at December&nbsp;31
and June&nbsp;30 each year, the debt service cover ratio for the following 12
months is greater than 1.25 and the life of mine debt service cover ratio is
greater than 2.5, Lihir would have the right to withdraw cash in excess of a
US$15&nbsp;million minimum liquidity balance from the secured accounts.</FONT></TD>
</TR>

</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>
<TR valign="top">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&#149; Events of Default: In addition to the normal default provisions relating
to non payment, financial distress, misrepresentation, cross default and
breach of undertakings, the agreement includes default provisions covering
material adverse change, expropriation, war and political violence and
exchange control.</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">The US$50&nbsp;million facility agreement also includes financial covenants that
would trigger default if at December&nbsp;31 and June&nbsp;30 of each year the debt
service cover ratio for the next twelve months is less than 1.0 or the life
of mine debt cover ratio is less than 1.5.</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">If an event of default is continuing the lenders, acting on majority
consent, may cancel the revolving credit commitment and accelerate repayment
of the loan.</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&#149; Review Events: If, without consent of the agent (acting on the
instructions of all the lenders), Rio Tinto sells in whole or in part its
current shareholding in Lihir or the manager of the project ceases to be a
wholly owned subsidiary of Rio Tinto, the Agent may give notice to Lihir,
within 21&nbsp;days of becoming aware or being notified of such an event:</FONT></TD>
</TR>

</TABLE>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>

    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="93%"><FONT size="2">requiring the US$ 50&nbsp;million revolving credit be immediately
restructured in a manner acceptable to the Agent; or</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="93%"><FONT size="2">requiring the US$ 50&nbsp;million revolving credit be repaid and
canceled within 180&nbsp;days from such notification.</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">100</FONT>
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<P align="left"><FONT size="2"><B><I>EIB Financing &#151; Own Resources Finance Contract</I></B>
</FONT>
<P align="left"><FONT size="2">Pursuant to finance documents entered into among EIB, MRDC and the company on
February&nbsp;15, 1996, EIB agreed to lend funds in an amount of 25&nbsp;million ECUs to
MRDC, such funds to be on-lent to Lihir for the financing of the Lihir
operation pursuant to an on-lending agreement between Lihir and MRDC. Under
these finance documents, the credit was required to be linked to past or
planned expenditures in connection with the metallurgical plant or the oxygen
plant described in the technical description attached thereto. Lihir drew the
entire funds during the 1997&nbsp;year which were used to fund the purchase of the
oxygen plant and processing equipment. Although the funds are lent to MRDC,
the credit was disbursed directly to Lihir in US Dollars in the amount of
approximately US$26.5&nbsp;million.
</FONT>
<P align="left"><FONT size="2">Interest on funds lent to MRDC under the EIB finance documents accrues at a
rate equal to the average of the rates applicable to comparable loans made by
the EIB on the date of the relevant disbursement notice of 3%. The interest
rate accruing on amounts on-lent by MRDC to Lihir under the on-lending
agreement accrues at an annual rate equal to 8.42% which is the sum of the
interest rate payable by MRDC to EIB, the annual rate subsidy of 3.42%, and a
margin of 2%. The portion of interest payable under the on-lending agreement
which corresponds to the interest rate subsidy will be paid by or on behalf of
MRDC to the New Ireland Trust Fund in order to fund the development or
maintenance of physical or social infrastructure projects for the benefit of
the population of New Ireland province.
</FONT>
<P align="left"><FONT size="2">The finance documents contain, among others, undertakings from the company with
respect to use of proceeds, completion of the Lihir operation, financing of
cost overruns without recourse to the EIB, insurance, maintenance of the Lihir
operations facilities, operation of the mine, shareholding and lending, future
operations, regular reporting and environmental reporting.
</FONT>
<P align="left"><FONT size="2">The on-lending agreement was signed on December&nbsp;19, 1997 which set forth the
rights and obligations of MRDC and Lihir with respect to amounts on-lent to
Lihir by MRDC. In order to comply with the terms of the loan agreement, the
payment by Lihir of any amounts under the on-lending agreement was
subordinated in right of payment and upon liquidation to the syndicated
facility agreement.
</FONT>
<P align="left"><FONT size="2">The loan contains Event of Default provisions that, if satisfied, give
EIB/MRDC the right to demand immediate repayment of the loan. These
provisions concern events such as material misrepresentation of fact, failure
to pay obligations under the loan when due, insolvency or liquidation of the
Company, abandonment of a substantial part of the Company&#146;s business,
substantial reduction in the net worth of the Company, default on other major
loan agreements, and any material adverse effect on the Company&#146;s ability to
service the loan. To date, no Event of Default has been triggered.
</FONT>
<P align="left"><FONT size="2">As part of the refinancing agreement signed on November&nbsp;22, 2000, MRDC
consented to revised terms of subordination and security in the on-lending
agreement. The subordination of the on-lending agreement in terms of debt
service payments will fall away on the termination of the syndicated facility
agreement at maturity or earlier if the loan is pre-paid.
</FONT>
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<DIV align="left"><A NAME="038"></A></DIV>
<P align="left"><FONT size="2"><B><I>D. Exchange Controls</I></B>
</FONT>
<P align="left"><FONT size="2">Since achieving self-government in 1973 and independence in 1975, PNG has
maintained a consistent policy of welcoming direct foreign investment in most
activities and foreign investment in the mining sector in particular. The
Investment Promotion Act assures investors that they will have the right to
remit after-tax profits and to make
</FONT>
<P align="center"><FONT size="2">101</FONT>
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<P align="left"><FONT size="2">external debt-service and supplier payments and that there will be no
expropriation without adequate compensation.
</FONT>
<P align="left"><FONT size="2">The PNG Central Banking (Foreign Exchange and Gold) Regulations generally
require PNG companies to transfer all of their non-Kina revenues to PNG and
convert them into Kina and require the prior approval of the PNG Central Bank
to convert funds from Kina into other currencies. However, as is ordinarily
the case with large mining and petroleum projects in PNG, under the Mining
Development Contract the PNG Government has agreed to ensure that the PNG
Central Bank will grant to the company permission to retain certain of its
funds in other currencies in, and to convert and transfer its Kina funds into,
offshore accounts. Prior to the completion of the development of the Lihir
operation, this permission was limited to certain proceeds from bank loans,
insurance policies and the sale of its securities (including all of the
non-Kina proceeds of the Loan and the global offering). The company is
currently permitted to retain in the offshore accounts proceeds from the sale
of mining products and the proceeds of bank loans and insurance policies in an
aggregate amount sufficient to pay three months anticipated loan servicing
obligations, payments for goods and services to persons resident outside of
PNG, dividends to non-PNG shareholders and payments for certain approved
reductions in share capital. To the extent the foregoing permissions are
insufficient for such purposes, the company would require the approval of the
PNG Central Bank to pay cash dividends to shareholders resident outside PNG or
to invest or purchase goods or property outside PNG.
</FONT>
<P align="left"><FONT size="2">The Kina is subject to exchange controls. There is a limited and inefficient
market for the Kina and no assurance can be given that the company will be able
to convert any Kina funds it has into other currencies at rates comparable to
those at which funds were initially remitted to PNG or at all.
</FONT>
<P align="left"><FONT size="2">Foreign workers employed by the company, if they are resident in Papua New
Guinea, will be subject to exchange control administered by the Bank of Papua
New Guinea (the Central Bank) under the Central Banking (Foreign Exchange and
Gold) Regulation. A taxation clearance certificate is generally required where
cumulative remittances of foreign currency exceed K50,000 in a calendar year,
and formal exchange control approval is generally required where total
cumulative foreign currency remittances exceed K500,000 in a calendar year
(approximately US$130,000), including for the purposes of buying securities. A
person in this position will be able to purchase the company&#146;s ordinary shares
or American Depositary Shares on exchanges outside Papua New Guinea on which
they are listed for quotation.
</FONT>
<P align="left"><FONT size="2">A foreign worker employed by the company who is resident in Papua New Guinea
will be permitted to purchase the company&#146;s ordinary shares on the Port Moresby
Stock Exchange in Papua New Guinea without any restriction. A person who is
not resident in Papua New Guinea will be able to purchase the company&#146;s
ordinary shares or American Depositary Shares on the exchanges on which they
are listed for quotation without any restriction.
</FONT>
<P align="left"><FONT size="2">Any person who has purchased the company&#146;s ordinary shares would be permitted
to hold them, and exercise the votes attached to them, without any limitations,
subject to the provisions of the PNG Companies Act.
</FONT>
<!-- link3 "E. Taxation" -->
<DIV align="left"><A NAME="039"></A></DIV>
<P align="left"><FONT size="2"><B><I>E. Taxation</I></B>
</FONT>
<P align="left"><FONT size="2">The following discussion is a summary of United States federal income,
Australian and PNG tax consequences to U.S. holders of ordinary shares or of
ADSs evidenced by ADRs. The discussion does not purport to be a comprehensive
discussion and is based on the United States Internal Revenue Code of 1986, as
amended (the
</FONT>
<P align="center"><FONT size="2">102</FONT>
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<P align="left"><FONT size="2">&#147;Code&#148;) and the tax laws of PNG as in effect on the date hereof, which are
subject to change. This discussion is also based in part upon the
representations of the Depositary and assumes that each obligation in the
Deposit Agreement and any related agreement will be performed in accordance
with its terms. The discussion does not consider any specific facts or
circumstances that may apply to a particular investor, some of which (for
example, tax-exempt entities, banks, broker-dealers, traders in securities that
elect to mark to market, investors liable for alternative minimum tax,
investors who hold ordinary shares or ADRs as part of straddles or hedging or
conversion transactions and investors whose functional currency is not the U.S.
dollar) may be subject to special rules. Accordingly, prospective purchasers of
ordinary shares or ADSs are urged to consult their tax advisors concerning the
U.S. federal, state, local and foreign tax consequences including the PNG
consequences of their ownership of ordinary shares or ADSs.
</FONT>
<P align="left"><FONT size="2"><B>United States Federal Income Taxation</B>
</FONT>

<P align="left"><FONT size="2">For purposes of this discussion, a &#147;U.S. Holder&#148; is any beneficial owner who or
that owns the ordinary shares or ADSs as a capital asset and is (i)&nbsp;a citizen
or resident of the United States, (ii)&nbsp;a domestic corporation, (iii)&nbsp;an estate
subject to United States federal income taxation on a net income basis or (iv)
a trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United States
persons have the authority to control all substantial decisions of the trust.
The discussion does not address aspects of United States taxation other than
federal income taxation and of PNG taxation other than income taxation.
Prospective investors are urged to consult their tax advisors regarding the
United States federal, state, local, PNG, and other jurisdictions tax
consequences of owning and disposing of ordinary shares and ADSs.
</FONT>
<P align="left"><FONT size="2">In general, taking into account the earlier assumptions, for United States
federal income purposes, holders of ADRs evidencing ADSs will be treated as the
owners of the ordinary shares represented by those ADSs.
</FONT>
<P align="left"><FONT size="2"><B><I>Taxation of Dividends</I></B>
</FONT>
<P align="left"><FONT size="2">Subject to the discussion under &#147;Passive Foreign Investment Company
Considerations&#148; below, under United States federal income tax law, U.S. Holders
will include in gross income as a dividend the gross amount of any distribution
paid (before reduction for PNG withholding taxes) by the company to the extent
of its current or accumulated earnings and profits (as determined for United
States federal income tax purposes) as ordinary income when the dividend is
received, actually or constructively, by the U.S. Holder, in the case of
ordinary shares, or by the Depositary, in the case of ADSs. The dividend will
not be eligible for the dividends-received deduction generally allowed to U.S.
corporations. The amount of the distribution will be the U.S. dollar value of
the PNG Kina payments made, determined at the spot PNG Kina/U.S. dollar rate on
the date such dividend distribution is includible in the income of the U.S.
Holder, regardless of whether the payment is in fact converted into U.S.
dollars. Generally, any gain or loss resulting from currency exchange
fluctuations during the period from the date the dividend is paid to the date
such payment is converted into U.S. dollars will be treated as ordinary U.S.
sourced income or loss. Distributions in excess of current and accumulated
earnings and profits, as determined for United States federal income tax
purposes, will be treated as a non-taxable return of capital to the extent of
the US Holders basis in the ordinary shares or ADSs and thereafter as capital
gain.
</FONT>
<P align="left"><FONT size="2">Subject to certain conditions and limitations, the PNG tax withheld and paid
over to PNG will be eligible for credit against the U.S. Holder&#146;s United States
federal income tax liability.
</FONT>
<P align="left"><FONT size="2">For foreign tax credit purposes, the dividend will be income from sources
without the United States, but generally will be &#147;passive income&#148; (or, in the
case of certain holders, &#147;financial services income&#148;) which is treated
</FONT>
<P align="center"><FONT size="2">103</FONT>
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<P align="left"><FONT size="2">separately from other types of income for purposes of computing the foreign tax
credit allowable to the U.S. Holder.
</FONT>
<P align="left"><FONT size="2">Distributions of additional ordinary shares to U.S. Holders with respect to
their ordinary shares or ADSs that are made as part of a pro rata distribution
to all shareholders of the company generally will not be subject to United
States federal income tax.
</FONT>
<P align="left"><FONT size="2"><B><I>Taxation of Capital Gains</I></B>
</FONT>
<P align="left"><FONT size="2">Subject to the discussion under &#147;Passive Foreign Investment Company
Considerations&#148; below, upon a sale or other disposition of ordinary shares or
ADSs, a U.S. Holder will recognize U.S. sourced gain or loss for United States
federal income tax purposes in an amount equal to the difference between the
U.S. dollar value of the amount realized and the U.S. Holder&#146;s tax basis
(determined in U.S. dollars) in such ordinary shares or ADSs. Such gain or
loss will be a capital gain or loss and, if the U.S. Holder&#146;s holding period
for such ordinary shares or ADSs exceeds one year, will be a long-term capital
gain or loss. Long-term capital gains of a non-corporate U.S. Holder are
generally subject to a maximum tax rate of 20%.
</FONT>
<P align="left"><FONT size="2"><B><I>Passive Foreign Investment Company Considerations</I></B>
</FONT>
<P align="left"><FONT size="2">The company believes that for its 1995, 1996 and 1997 taxable years, the
company was a passive foreign investment company, or PFIC, for United States
federal income tax purposes because the company had earned passive income from
investments while it had not yet earned any income from mining operations.
While in certain circumstances, a company will not be treated as a PFIC during
the first taxable year in which such company has gross income, because the
company had passive income for more than one taxable year before earning income
from mining operations, the exception would not be applicable. Consequently,
U.S. Holders of the company&#146;s ordinary shares or ADSs whose holding period
includes all or part of the 1995, 1996 or 1997 taxable years of the company
will be subject to the special rules described below.
</FONT>
<P align="left"><FONT size="2">The company believes that it will not be treated as a PFIC for its 1998, 1999,
2000, 2001 and 2002 taxable years. However, the classification of the company
as a PFIC will depend on a factual determination made annually and thus may be
subject to change, depending upon the character of the company&#146;s income and
assets in future years. The Code treats gains from transactions in
commodities, such as gold, as passive income unless &#147;substantially all&#148; of a
company&#146;s business is as an active producer of the commodity. The Regulations
define &#147;substantially all&#148; to mean that 85% or more of a producer&#146;s gross
receipts must be gross receipts from sales in the active conduct of a
commodities business or certain related activities. Under these rules, there
can be no assurance that the company would not be treated as a PFIC in future
taxable years even though it is earning income from its mining operations.
</FONT>
<P align="left"><FONT size="2">A U.S. Holder of ordinary shares or ADSs whose holding period includes a
taxable year of the company in which the company was a PFIC and who does not
make a &#147;QEF election&#148; (as described below) will be subject to the following
rules:
</FONT>
<P align="left"><FONT size="2">(a)&nbsp; Distributions made by the company during a taxable year to a U.S. Holder
with respect to the ordinary shares or ADSs that are an &#147;excess distribution&#148;
(defined generally as the excess of the amount received with respect to the
ordinary shares or ADSs in any taxable year in excess of 125&nbsp;percent of the
average received in the shorter of either the three previous years or the U.S.
Holder&#146;s holding period before the taxable year) must be allocated ratably to
each day of the U.S. Holder&#146;s holding period. The amount allocated to the
current taxable year
</FONT>
<P align="center"><FONT size="2">104</FONT>
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<P align="left"><FONT size="2">is included as ordinary income in the U.S. Holder&#146;s gross income for that year.
The amount allocated to each prior taxable year is taxed as ordinary income at
the highest rate in effect for the U.S. Holder in that prior year and the tax
is subject to an interest charge at the rate applicable to deficiencies in
income taxes.
</FONT>
<P align="left"><FONT size="2">(b)&nbsp; The entire amount of any gain realized upon the sale or other disposition
of ordinary shares or ADSs will be treated as an excess distribution made in
the year of sale or other disposition and as a consequence will be treated as
ordinary income and, to the extent allocated to years prior to the year of sale
or disposition, will be subject to the interest charge described above.
</FONT>
<P align="left"><FONT size="2">The special PFIC tax rules described above will not apply to a U.S. Holder if
the U.S. Holder elects to have the company treated as a &#147;qualified electing
fund&#148; (a &#147;QEF election&#148;) in the first taxable year in which the U.S. Holder
owns the ordinary shares or ADSs and for which the company is treated as a
PFIC, and the company complies with certain reporting requirements. The
company intends to comply with all reporting requirements necessary for a U.S.
Holder to make a QEF election and will provide to U.S. Holders such information
as may be required to make such a QEF election effective.
</FONT>
<P align="left"><FONT size="2">A U.S. Holder that makes a QEF election will be currently taxable on its pro
rata share of the company&#146;s ordinary earnings and net capital gain (at ordinary
income and capital gains rates, respectively) for each taxable year of the
company in which the company is a PFIC (which, as discussed above, may be a
significant number of taxable years), regardless of whether or not
distributions were received. The U.S. Holder&#146;s basis in the ordinary shares or
ADSs will be increased to reflect taxed but undistributed income.
Distributions of income that had previously been taxed will result in a
corresponding reduction of basis in the ordinary shares or ADSs and will not be
taxed again as a distribution to the U.S. Holder.
</FONT>
<P align="left"><FONT size="2">For taxable years beginning after 1997, a U.S. Holder of ordinary shares or
ADSs in a PFIC that are treated as &#147;marketable stock&#148; may also make a
mark-to-market election. An electing shareholder will not be subject to the
PFIC rules described above. Instead, in general, an electing shareholder will
include in each taxable year as ordinary income the excess, if any, of the fair
market value of the ordinary shares or ADSs at the end of the taxable year over
their adjusted basis and will be permitted an ordinary loss in respect of the
excess, if any, of the adjusted basis of the ordinary shares or ADSs over their
fair market value at the end of the taxable year (but only to the extent of the
net amount of previously included income as a result of the mark-to-market
election). The electing U.S. Holder&#146;s basis in the ordinary shares or ADSs
will be adjusted to reflect any such income or loss amounts.
</FONT>
<P align="left"><FONT size="2">A U.S Holder who makes the mark-to-market election (described above) but who
did not make a QEF election for any holding periods prior to December&nbsp;31, 1997,
in which the company was a PFIC, will be subject to the PFIC rules in the first
taxable year of making the mark-to-market election, with respect to any
distribution on or disposition of such ordinary shares or ADSs or with respect
to any amount includable as a result of making the mark-to-market election.
</FONT>
<P align="left"><FONT size="2">Special rules apply with respect to the calculation of the amount of the
foreign tax credit with respect to excess distributions by a PFIC or inclusions
under a QEF.
</FONT>
<P align="left"><FONT size="2">A U.S. Holder who owns ordinary shares or ADSs during any year that the company
is a PFIC must file Internal Revenue Service Form&nbsp;8621.
</FONT>

<P align="center"><FONT size="2">105</FONT>
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<P align="left"><FONT size="2"><B>Australian Taxation</B>
</FONT>

<P align="left"><FONT size="2">Australian stamp duty is not payable on transfers made on or after 1 July 2001
of marketable securities that are quoted on the Australian Stock Exchange and
registered in Australia. No Australian stamp duty is payable on the issue or
transfer in the United States of an ADR for Lihir Gold shares.
</FONT>
<P align="left"><FONT size="2"><B>Papua New Guinea Taxation</B>
</FONT>

<P align="left"><FONT size="2">The application of PNG taxation to U.S. Holders in relation to income derived
from their ADRs or ordinary shares will depend upon whether they are resident
in PNG or not. A person, other than a company, will normally be a resident of
PNG if that person:
</FONT>
<P align="left"><FONT size="2">is domiciled in PNG, unless the person&#146;s permanent place of abode is outside
PNG; or
</FONT>
<P align="left"><FONT size="2">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.
</FONT>
<P align="left"><FONT size="2">A company will normally be a resident of PNG if it is incorporated in PNG or if
it carries on business in PNG and has either its central management and control
in PNG or its voting power is controlled by shareholders who are residents of
PNG.
</FONT>
<P align="left"><FONT size="2">A superannuation fund will be a resident of PNG if it is established or managed
in PNG.
</FONT>
<P align="left"><FONT size="2">Dividends paid by the company after January&nbsp;1, 2001, including those paid to
residents of PNG, will generally be subject to 10% (17% previously) dividend
withholding tax. Dividends paid to resident and non-resident superannuation
funds are exempt from the withholding tax.
</FONT>
<P align="left"><FONT size="2">If a US Holder is not a resident of PNG, the dividend (withholding)&nbsp;tax on the
Holder&#146;s ordinary shares will be a final PNG tax on that income provided that
the U.S. Holder does not carry on business through a permanent establishment in
PNG. Assuming that the US Depositary for the ADRs never becomes a resident of
PNG, this will apply to the ordinary shares held by the Depositary on behalf of
the ADR holders and further distributions of the dividend income by the
Depositary to the ADR holders who are themselves not resident in PNG will not
be liable to any further PNG tax.
</FONT>
<P align="left"><FONT size="2">If a US Holder is a resident of PNG, dividends paid by the company on the
ordinary shares held by that person and income received from the ADRs held by
that person will be assessable income in PNG and, after any allowable
deductions are made, will be subject to income tax at the normal rates
applicable to individuals and companies. A credit may be claimed for the
dividend (withholding)&nbsp;tax which has already been paid.
</FONT>
<P align="left"><FONT size="2">The sale of ordinary shares or ADRs may generate assessable income to certain
U.S. Holders, such as banks, insurance companies and other persons or
institutions in the business of investment, if such sale is carried out in PNG
or if the business is carried on in PNG through a permanent establishment and
the income earned is effectively connected with that permanent establishment.
Any such income would be assessable (after any allowable deductions are made)
at the ordinary rates applicable to individuals or companies.
</FONT>
<P align="left"><FONT size="2">In addition, although PNG does not have a capital gains tax as such, any person
deriving in PNG a profit arising from the sale of any property acquired for the
purpose of profit-making by sale, or from the carrying on or carrying out of
any profit making undertaking or scheme, will be liable to tax in PNG on that
profit. Such profit will be included in that person&#146;s assessable income and,
after any allowable deductions are made, will be subject to income tax at the
normal rates applicable to individuals and companies.
</FONT>
<P align="center"><FONT size="2">106</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="left"><FONT size="2">Transfers of marketable securities which are registered in PNG will be liable
to PNG stamp duty as follows:
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">if transferred through a stock broker registered to operate on the
Port Moresby Stock Exchange, the transfer is exempt from stamp duty;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">if transferred through a recognized broker or broker&#146;s agent, at the
rate of 0.2% payable by the vendor and 0.2% payable by the purchaser of
the sale/purchase price for the securities; and</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">otherwise at the rate of 1% of the value of the securities, payable
by the purchaser or transferee.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">No PNG stamp duty will be payable on the issue or stock market transfer of an
ADR, provided that the ADR is registered on a register located outside PNG and
the transfer is effected on that register.
</FONT>
<!-- link3 "F. Dividends and Paying Agents" -->
<DIV align="left"><A NAME="040"></A></DIV>
<P align="left"><FONT size="2"><B><I>F. Dividends and Paying Agents</I></B>
</FONT>
<P align="left"><FONT size="2">Not applicable
</FONT>
<!-- link3 "G. Statement by Experts" -->
<DIV align="left"><A NAME="041"></A></DIV>
<P align="left"><FONT size="2"><B><I>G. Statement by Experts</I></B>
</FONT>
<P align="left"><FONT size="2">Not applicable
</FONT>
<!-- link3 "H. Documents on Display" -->
<DIV align="left"><A NAME="042"></A></DIV>
<P align="left"><FONT size="2"><B><I>H. Documents on Display</I></B>
</FONT>
<P align="left"><FONT size="2">All company documents are in English and may be inspected at the registered
office in Port Moresby, PNG with the benefit of advance notice.
</FONT>
<P align="left"><FONT size="2">It is also possible to read and copy documents referred to in this annual
report on Form&nbsp;20-F that have been filed with the SEC at the SEC&#146;s public
reference room located at 450 Fifth Street, NW, Washington, D.C. 20549. Please
call the SEC at 1-800-SEC-0330 for further information on the public reference
rooms and their copy charges.
</FONT>
<!-- link3 "I. Subsidiary Information" -->
<DIV align="left"><A NAME="043"></A></DIV>
<P align="left"><FONT size="2"><B><I>I. Subsidiary Information</I></B>
</FONT>
<P align="left"><FONT size="2">Not applicable.
</FONT>
<P align="center"><FONT size="2">107</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<!-- link2 "Item&nbsp;11. Quantitative and Qualitative Disclosure About Market Risk" -->
<DIV align="left"><A NAME="044"></A></DIV>
<P align="left"><FONT size="2"><B>Item&nbsp;11. Quantitative and Qualitative Disclosure About Market Risk</B>
</FONT>

<!-- link3 "A. Quantitative Information about Market Risk" -->
<DIV align="left"><A NAME="045"></A></DIV>
<P align="left"><FONT size="2"><B><I>A. Quantitative Information about Market Risk</I></B>
</FONT>
<P align="left"><FONT size="2"><B>Gold Commodity Price Risk</B>
</FONT>

<P align="left"><FONT size="2">Market risks relating to the company&#146;s operations result primarily from changes
in the market price for gold.
The following tables summarizes Lihir&#146;s gold price hedging program as at
December&nbsp;31, 2002:
</FONT>
<P align="left"><FONT size="2"><B><I>Put Options Bought</I></B>
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
    <TD width="23%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Year</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>Ounces</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>Average</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>Revenue</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>&nbsp;</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>&nbsp;</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>Strike price</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>(US$ millions)</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>&nbsp;</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>&nbsp;</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>(US$/Oz)</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="2"></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2004</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">20,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">335.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2005</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">95,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">320.39</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">30.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2006</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">39,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">325.26</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">12.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2007</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">96,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">319.17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">30.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2008</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">40,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">335.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">13.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="center" nowrap colspan="2"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="center" nowrap colspan="2"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="center" nowrap colspan="2"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">290,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">323.66</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">93.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2"><B><I>Call Options Sold</I></B>
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
    <TD width="28%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="17%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="14%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Year</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>Ounces</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>Average</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>&nbsp;</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>&nbsp;</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>Strike price</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>&nbsp;</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>&nbsp;</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>(US$/Oz)</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2004</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">20,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">365.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2005</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">95,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">326.71</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2006</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">39,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">336.74</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2007</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">96,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">319.08</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2008</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">20,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">365.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="center" nowrap colspan="2"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="center" nowrap colspan="2"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">270,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">331.12</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">108</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left"><FONT size="2"><B><I>Forwards</I></B>
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
    <TD width="20%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Year</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>Ounces</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>Average</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>Revenue</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>&nbsp;</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>&nbsp;</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>Strike price</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>(US$ millions)</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>&nbsp;</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>&nbsp;</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>(US$/Oz)</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="2"><FONT size="1"><B>&nbsp;</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2003</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">311,977</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">329.60</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">102.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2004</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">217,977</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">325.38</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">70.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2005</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">178,988</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">335.27</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">60.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2006</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">222,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">321.90</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">71.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2007</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">330,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">323.76</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">106.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2008</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">375,475</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">331.96</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">124.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2009</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">243,185</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">350.76</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">85.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2010</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">10,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">327.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="center" nowrap colspan="2"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="center" nowrap colspan="2"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
        <TD align="center" nowrap colspan="2"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,890,101</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">330.90</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">625.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">The revenue figures shown in the above tables are those that will be received
if, in the case of options, those options are exercised. For put options
bought by Lihir, this will be the case when the prevailing spot price at the
exercise date is below the put option strike price. For call options bought by
Lihir, the option would be exercised and the resulting ounces sold at the
prevailing spot price only if the spot price were to be greater than the call
strike price. For call options sold by Lihir, Lihir will be obliged to deliver
gold at the strike price if required to do so by the counter-party. This is
only likely to occur if the spot price is greater than the call strike price.
In the case of Fixed Rate Forwards, Lihir is obliged to sell the relevant
number of ounces at the specified strike price on the value date, and the
revenue shown above is that which will actually be received.
</FONT>
<P align="left"><FONT size="2">The minimum total revenue generated from these programs will be US$719&nbsp;million
(2001: US$737&nbsp;million and 2000: US$640&nbsp;million). Revenue generated from the
same number of ounces at the prevailing spot price at December&nbsp;31, 2002 of
US$342.75 per ounce would be US$747&nbsp;million (2001: US$634&nbsp;million at US$276.50
per ounce and 2000: US$532&nbsp;million at US$272.25 per ounce).
</FONT>
<P align="left"><FONT size="2">On December&nbsp;31, 2002, the estimated fair value of the total hedge program as
determined by independent party based on the ruling spot price of US$342.75
(2001: US$276.5 and 2000: US$272.25) was negative US$65.8&nbsp;million (2001:
positive US$59.8&nbsp;million and 2000: positive US$54.4). At the spot price plus
10% (US$377.0) the estimated fair value would be approximately US$150&nbsp;million
out-of-the-money. Conversely at the spot price less 10% (US$308.5) the
estimated fair value would be US$0&nbsp;million. The fair value of commodity
contracts is estimated based on quotes from the market makers of these
instruments and represents the estimated amounts that Lihir would expect to
receive or pay to terminate the agreements at the reporting date. Fair value
of put options is an estimate based on relevant market information such as:
volatility of similar options, futures prices and the contracted strike price.
</FONT>
<P align="left"><FONT size="2">Net profit for 2002 included revaluation revenue relating to ineffective hedges
of US$2.3&nbsp;million (2001: 5.0&nbsp;million). The hedge effectiveness provisions of
IAS 39 require that the ineffective portion of the hedge be passed through the
income statement. During the latter part of 2000 and early 2001, gold lease
rates were historically high. In locking in the gold price for future
production, Lihir elected to retain a floating rate exposure to lease
</FONT>
<P align="center"><FONT size="2">109</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="left"><FONT size="2">rates by way of gold lease rate swaps. The US$2.3&nbsp;million (2001: $US5.0
million, 2000: US$ nil) revenue has primarily arisen due to lease rates falling
to historical levels, across the curve.
</FONT>
<P align="left"><FONT size="2">The effective portion of the hedge is retained in equity, to be recycled to
earnings on delivery of designated production. At 31 December 2002,
shareholders equity included a hedging fair value reserve of negative US$69.5
million (2001: positive US$53.6&nbsp;million).
</FONT>
<P align="left"><FONT size="2"><B>Interest Rate and Exchange Rate Risk</B>
</FONT>

<P align="left"><FONT size="2">The company does not use financial instruments to hedge interest rate or
exchange rate exposure.
</FONT>
<P align="left"><FONT size="2">The company&#146;s interest expenses are most sensitive to changes in the London
Inter-Bank Offered Rate (LIBOR)&nbsp;as its borrowings under the syndicated facility
agreement bear a LIBOR based interest rate. At December&nbsp;31, 2002, the group
had US$23.0&nbsp;million outstanding on its variable rate loans. In addition it had
US$17.5&nbsp;million outstanding on the fixed rate (8.42%) EIB loan, partially
offset by primarily US$ denominated cash deposits amounting to US$32.5&nbsp;million.
The potential loss to the group over one year that would result from a
hypothetical, instantaneous and unfavourable change in 100 basis points in the
interest rates of all variable financial assets and liabilities (excluding the
EIB loan which is fixed rate and cash deposits) on December&nbsp;31, 2002 would be
approximately US$0.2&nbsp;million. Including the cash on deposit component in the
calculation, the net interest rate exposure would reduce to less than US$(0.1)
million.
</FONT>
<P align="left"><FONT size="2">The company&#146;s functional currency is the US dollar but some transactions are
denominated in Australian dollars and Kina. By way of illustration of the
sensitivity of exchange rates on such transactions, a 10% change in the
Australian to US dollar exchange rate would have a US$0.4&nbsp;million impact on
earnings after tax. Similarly a 10% change in the Kina to US dollar exchange
rate would have a US$0.2&nbsp;million impact on earnings after tax.
</FONT>
<!-- link3 "B. Qualitative Information about Market Risk" -->
<DIV align="left"><A NAME="046"></A></DIV>
<P align="left"><FONT size="2"><B><I>B. Qualitative Information about Market Risk</I></B>
</FONT>
<P align="left"><FONT size="2">Market risks relating to the company&#146;s operations result primarily from changes
in the market price for gold and changes in interest rates. The company does
not use derivative securities or other financial instruments for trading
purposes and is not party to any leveraged derivatives.
</FONT>
<P align="left"><FONT size="2">To reduce the risk related to the decrease in the market price of gold, the
company has entered into hedging transactions, which include put options, spot
deferred and forward sales covering a portion of its gold production and fixed
future prices. The company assesses the exposure that may result from a
hedging transaction prior to entering into commitment, and only enters into
transactions that it believes accurately hedge the underlying risk and could be
safely held to maturity. The company regularly reviews its unrealized gains
and losses on hedging transactions. The company is also required by its
obligations under the former loan agreement and under the new syndicated
facility agreement to hedge against decreases in the market price of gold in
order to maintain minimum revenue amounts on a portion of its gold production.
For a qualitative discussion of the company&#146;s hedging strategies, see &#147;Item&nbsp;5 &#151;
Operating and Financial Review and Prospects &#151; Operating Results &#151; Revenues -
Hedging&#148;.
</FONT>
<P align="center"><FONT size="2">110</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<!-- link2 " Item&nbsp;12. Description of Securities Other than Equity Securities" -->
<DIV align="left"><A NAME="047"></A></DIV>
<P align="left"><FONT size="2"><B>Item&nbsp;12. Description of Securities Other than Equity Securities</B>
</FONT>

<P align="left"><FONT size="2">Not applicable.
</FONT>
<!-- link1 " PART II" -->
<DIV align="left"><A NAME="048"></A></DIV>
<P align="left"><FONT size="2"><B>PART II</B>
</FONT>

<!-- link2 " Item&nbsp;13. Defaults, Dividend Arrearages and Delinquencies" -->
<DIV align="left"><A NAME="049"></A></DIV>
<P align="left"><FONT size="2"><B>Item&nbsp;13. Defaults, Dividend Arrearages and Delinquencies</B>
</FONT>
<P align="left"><FONT size="2">None
</FONT>
<!-- link2 "Item&nbsp;14. Material Modifications to the Rights of Security Holders and Use of Proceeds" -->
<DIV align="left"><A NAME="050"></A></DIV>
<P align="left"><FONT size="2"><B>Item&nbsp;14. Material Modifications to the Rights of Security Holders and Use of<BR>
Proceeds</B>
</FONT>

<P align="left"><FONT size="2">None.
</FONT>
<!-- link1 "PART IV" -->
<DIV align="left"><A NAME="051"></A></DIV>
<P align="left"><FONT size="2"><B>PART IV</B>
</FONT>

<!-- link2 " Item&nbsp;17. Financial Statements" -->
<DIV align="left"><A NAME="052"></A></DIV>
<P align="left"><FONT size="2"><B>Item&nbsp;17. Financial Statements</B>
</FONT>
<P align="left"><FONT size="2">Not applicable
</FONT>
<!-- link2 " Item&nbsp;18. Financial Statements" -->
<DIV align="left"><A NAME="053"></A></DIV>
<P align="left"><FONT size="2"><B>Item&nbsp;18. Financial Statements</B>
</FONT>
<P align="left"><FONT size="2">See pages F-1 through F-34 incorporated herein by reference.
</FONT>

<P align="center"><FONT size="2">111</FONT>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link2 "Item&nbsp;19 &#151; Exhibits" -->
<DIV align="left"><A NAME="054"></A></DIV>

<P align="left"><FONT size="2"><B>Item&nbsp;19 &#151; Exhibits</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="8%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">Exhibit&nbsp;1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Constitution of Lihir Gold Limited, effective as of April&nbsp;28,
1998. (incorporated by reference to Lihir&#146;s annual report on
Form&nbsp;20-F for the fiscal year ended December&nbsp;31, 2000).</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD nowrap valign="top"><FONT size="2">Exhibit&nbsp;2 (a)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
European Investment Bank Finance Contract between EIB, MRL and
Lihir, dated December&nbsp;28, 1995 (incorporated by reference to
Lihir&#146;s annual report on Form&nbsp;20-F for the fiscal year ended
December&nbsp;31, 1996)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD nowrap valign="top"><FONT size="2">Exhibit&nbsp;2 (b)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Subordinated On-Lending Agreement Amending Agreement No.&nbsp;2 between
Mineral Resources Development Company Limited dated November&nbsp;22,
2000. (incorporated by reference to Lihir&#146;s annual report on
Form&nbsp;20-F for the fiscal year ended December&nbsp;31, 2000).</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD nowrap valign="top"><FONT size="2">Exhibit&nbsp;2 (c)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Syndicated Facility Agreement among Lihir, ABN AMRO Australia
Limited, ABN AMRO N.V. (Australian Branch) dated November&nbsp;22,
2000. (incorporated by reference to Lihir&#146;s annual report on
Form&nbsp;20-F for the fiscal year ended December&nbsp;31, 2000).</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD nowrap valign="top"><FONT size="2">Exhibit&nbsp;2 (d)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Lihir Gold Security Trust Deed among Lihir, ABN AMRO Australia
Limited, Mineral Resources Development Company Limited, Niugini
Mining Limited, Niugini Mining (Australia) Pty Ltd and certain
hedge counter-parties, dated November&nbsp;22, 2000. (incorporated by reference to Lihir&#146;s annual report on
Form&nbsp;20-F for the fiscal year ended December&nbsp;31, 2000).</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Exhibit&nbsp;2 (e)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Refinancing Co-ordination Deed among Lihir, UBS Australia Limited,
UBS AG, London Branch, Citibank, N.A., ABN AMRO N.V., (Australian
Branch), ABN AMRO Australia, Mineral Resources Development Company
Limited dated November&nbsp;22, 2000. (incorporated by reference to Lihir&#146;s annual report on
Form&nbsp;20-F for the fiscal year ended December&nbsp;31, 2000).</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Exhibit&nbsp;2 (f)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Lihir Gold Present Assets Charge (Australia) among Lihir between
Lihir and ABN AMRO Australia Limited dated November&nbsp;22, 2000. (incorporated by reference to Lihir&#146;s annual report on
Form&nbsp;20-F for the fiscal year ended December&nbsp;31, 2000).</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Exhibit&nbsp;2 (g)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Lihir Gold Future Assets Charge (Australia) among Lihir and ABN
AMRO Australia Limited dated November&nbsp;22, 2000. (incorporated by reference to Lihir&#146;s annual report on
Form&nbsp;20-F for the fiscal year ended December&nbsp;31, 2000).</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Exhibit&nbsp;2 (h)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Lihir Gold Offshore Assets Charge among Lihir and ABN AMRO
Australia Limited dated November&nbsp;22, 2000. (incorporated by reference to Lihir&#146;s annual report on
Form&nbsp;20-F for the fiscal year ended December&nbsp;31, 2000).</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Exhibit&nbsp;2 (i)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Lihir Gold Deed of Security (PNG)&nbsp;among Lihir and ABN AMRO
Australia Limited dated November&nbsp;22, 2000. (incorporated by reference to Lihir&#146;s annual report on
Form&nbsp;20-F for the fiscal year ended December&nbsp;31, 2000).</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Exhibit&nbsp;4 (a)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Special Mining Lease, dated as of March&nbsp;17, 1995, between Lihir
and the PNG Government (incorporated by reference to Lihir&#146;s Form
F-1 filed September&nbsp;6, 1995).</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Exhibit&nbsp;4 (b)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Mining Development Contract, dated as of March&nbsp;17, 1995, between
Lihir and the PNG Government (incorporated by reference to Lihir&#146;s
Form&nbsp;F-1 filed September&nbsp;6, 1995).</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Exhibit&nbsp;4 (c)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Lihir Project Management Agreement, dated as of March&nbsp;17, 1995,
between Lihir and Lihir Management Company (incorporated by
reference to Lihir&#146;s Form&nbsp;F-1 filed September&nbsp;6, 1995).</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">112</FONT>


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<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="8%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD></TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD nowrap valign="top"><FONT size="2">Exhibit&nbsp;4 (d)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Technical Support Agreement, dated as of June&nbsp;30, 1995, between
Lihir Management Company and Rio Tinto (incorporated by reference
to Lihir&#146;s Form&nbsp;F-1 filed September&nbsp;6, 1995).</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Exhibit&nbsp;4 (e)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Compensation Agreement for Land, Crops, Water and Air, dated as of
April&nbsp;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&#146;s Form&nbsp;F-1 filed
September&nbsp;6, 1995).</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Exhibit&nbsp;4 (f)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
PutPut and Ladolam Relocation Agreement, dated as of April&nbsp;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&#146;s Form&nbsp;F-1 filed September&nbsp;6, 1995).</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Exhibit&nbsp;4 (g)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Contract Explosives Services Contract, dated as of March&nbsp;14, 1996,
between Lihir Management Company for on behalf of Lihir and ICI
Dulux Papua New Guinea Pty Limited, and Deed of Assignment
relating to same (incorporated by reference to Lihir&#146;s annual
report on Form&nbsp;20-F for the fiscal year ended December&nbsp;31, 1995)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Exhibit&nbsp;4 (h)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Deed of Variation to Contract Explosives Services Contract, dated
as of June&nbsp;4, 1999, between Lihir Management Company for on behalf
of Lihir, Thiess Contractors (PNG)&nbsp;Pty Ltd, Roche Bros (PNG)&nbsp;Pty
Ltd, Orica Papua New Guinea Limited and Orica Australia Pty Ltd. (incorporated by reference to Lihir&#146;s annual report on Form&nbsp;20-F
for the fiscal year ended December&nbsp;31, 2000).</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Exhibit&nbsp;4 (i)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Agreement for the Services of Professor Ross Garnaut as Chairman
of Lihir, dated as of May&nbsp;19, 1995 between Lihir and
Maccullochella Pty Ltd. (incorporated by reference to Lihir&#146;s annual report on Form&nbsp;20-F
for the fiscal year ended December&nbsp;31, 2000).</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Exhibit&nbsp;4 (j)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Extension agreement for the Services of Professor Ross Garnaut as
Chairman of Lihir, dated as of January&nbsp;31, 2001 between Lihir and
Maccullochella Pty Ltd. (incorporated by reference to Lihir&#146;s annual report on Form&nbsp;20-F
for the fiscal year ended December&nbsp;31, 2000).</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Exhibit&nbsp;8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Significant Subsidiaries.</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">113</FONT>

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<P align="left"><FONT size="2"><B>Certain Definitions</B>
</FONT>

<P align="left"><FONT size="2">&#147;ADRs&#148; means American Depositary Receipts evidencing ADSs.
</FONT>

<P align="left"><FONT size="2">&#147;ADSs&#148; means American Depositary Shares, each of which represents 20 ordinary
shares.
</FONT>

<P align="left"><FONT size="2">&#147;ASX&#148; means the Australian Stock Exchange Limited.
</FONT>

<P align="left"><FONT size="2">&#147;Australian dollar&#148; and &#147;A$&#148; each mean the lawful currency of the Commonwealth
of Australia.
</FONT>

<P align="left"><FONT size="2">&#147;Blasting Contractor&#148; means Orica Papua New Guinea Ltd.
</FONT>

<P align="left"><FONT size="2">&#147;Compensation Agreement&#148; means the Compensation Agreement for Land, Crops,
Water and Air among Lihir Management, Lihir Mining Area Landowners Association
Inc, Block Executives (for and on behalf of the Landowners), Catholic Mission
(Kavieng Property Trust) and The United Church in PNG and the Solomon Islands,
dated April&nbsp;26, 1995.
</FONT>

<P align="left"><FONT size="2">&#147;CRA&#148; means CRA Limited, an Australian mining company which, in December 1995,
adopted a dual-listed companies structure with Rio Tinto, to form the Rio Tinto
Group.
</FONT>

<P align="left"><FONT size="2">&#147;Integrated Benefits Package&#148; means the package of compensation agreements
between Lihir Management Company and the people of Lihir represented by The
Nimamar Development Authority and the landowners of Lihir represented by the
Lihir Mining Area Landowners Association Inc.
</FONT>

<P align="left"><FONT size="2">&#147;Kina&#148; and &#147;K&#148; each mean the lawful currency of PNG.
</FONT>

<P align="left"><FONT size="2">&#147;Lihir Group&#148; means collectively the four islands (Niolam, Masahet, Mahur and
Mali) located in the Province of New Ireland, PNG.
</FONT>

<P align="left"><FONT size="2">&#147;Lihir Island&#148; means Niolam Island.
</FONT>

<P align="left"><FONT size="2">&#147;Lihirians&#148; means collectively the inhabitants of the Lihir Group.
</FONT>

<P align="left"><FONT size="2">&#147;Mining Development Contract&#148; means the Mining Development Contract between PNG
and the company, dated March&nbsp;17, 1995.
</FONT>

<P align="left"><FONT size="2">&#147;MRDC&#148; means Mineral Resources Development Company Limited, a company that is
wholly-owned by the PNG Government.
</FONT>

<P align="left"><FONT size="2">&#147;MRL&#148; means Mineral Resources Lihir Limited, a wholly owned subsidiary of MRDC.
</FONT>

<P align="left"><FONT size="2">&#147;Niugini Mining&#148; means Niugini Mining Limited.
</FONT>

<P align="left"><FONT size="2">&#147;Orogen Minerals&#148; means Orogen Minerals Limited.
</FONT>

<P align="left"><FONT size="2">&#147;Orogen Lihir&#148; means Orogen Minerals Lihir Limited.
</FONT>

<P align="center"><FONT size="2">114</FONT>

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<P align="left"><FONT size="2">&#147;PNG&#148; means the Independent State of Papua New Guinea.
</FONT>

<P align="left"><FONT size="2">&#147;Project Assignment Agreement&#148; means the Project Assignment Agreement among
Southern Gold, Niugini Mining, MRL, PNG and the company, dated March&nbsp;17, 1995.
</FONT>

<P align="left"><FONT size="2">&#147;Rio Tinto&#148; or &#147;Rio Tinto Group&#148; means the entity created by the unification of
The RTZ Corporation PLC and CRA in December 1995 pursuant to the adoption by
such companies of a dual listed companies structure.
</FONT>

<P align="left"><FONT size="2">&#147;Southern Gold&#148; means Southern Gold (Bahamas) Ltd, a company, since
deregistered, owned by Rio Tinto (75%) and Vengold (25%).
</FONT>

<P align="left"><FONT size="2">&#147;Special Mining Lease&#148; means the Special Mining Lease issued by the PNG
Department of Mining and Petroleum dated March&nbsp;17, 1995.
</FONT>

<P align="left"><FONT size="2">&#147;State Equity Acquisition Agreement&#148; means the State Equity Acquisition
Agreement among Kennecott, Niugini Mining, MRL and PNG, dated March&nbsp;17, 1995.
</FONT>

<P align="left"><FONT size="2">&#147;Technical Services Agreement&#148; means the Technical Services Agreement between
Sherritt and Lihir Management Company, dated August&nbsp;5, 1995.
</FONT>

<P align="left"><FONT size="2">&#147;Technical Services Agreement (North America)&#148; means the Technical Services
Agreement (North America) between Sherritt Inc and Lihir Management Company,
dated August&nbsp;5, 1995.
</FONT>

<P align="left"><FONT size="2">&#147;Technical Support Agreement&#148; means the Technical Support Agreement between Rio
Tinto and Lihir Management Company, dated June&nbsp;30, 1995.
</FONT>

<P align="left"><FONT size="2">&#147;US dollars&#148;, &#147;US$&#148;, &#147;$&#148; and &#147;dollars&#148; each mean the lawful currency of the
United States of America and &#147;A$&#148; means Australian dollars.
</FONT>

<P align="left"><FONT size="2">&#147;Vengold&#148; means Vengold, Inc.
</FONT>


<P align="left"><FONT size="2"><B>Glossary Of Certain Technical Terms</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
   <TD width="20%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="78%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Alteration&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Change in the mineral composition of a rock, commonly due to
hydrothermal activity</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Anhydrite&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Mineral form of calcium sulfate</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Argillic alteration&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Alteration composed of clay minerals</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Arsenopyrite&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
A sulfide mineral of iron and arsenic</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Autoclave&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Vessel used for chemical reactions at high temperature and pressure;
for example, to oxidize sulfide ore</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Autogenous threshold&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
The level of sulfur feed at which the heat generated by oxidation of
the sulfides is sufficient to propagate the reaction.</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">115</FONT>

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<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
   <TD width="20%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="78%">&nbsp;</TD>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Ball mill&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
A mill using metal balls as the grinding medium</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Bench&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
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 &#147;bench height&#148;. As
the pit progresses to lower levels, safety benches are left in the
walls to catch any rock falling from above.</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Benthic&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
The portion of the sea floor within which living organisms live</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Benthos&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Organisms that live within the sea floor</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Brecciation; breccia&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Fracturing of pre-existing rocks by natural forces; a rock type
formed in this manner</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Bullion&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Gold or silver in bars or ingots</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Calcining&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
To reduce to a powder or friable state by heat</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Caldera&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Large basin shaped, typically circular crater resulting from volcanic<BR>
activity</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Carbon-in-leach&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Method of extracting gold from solution using carbon</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Concentrate&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Material that has been processed to increase the content of contained
metal or mineral relative to the contained waste</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Counter-current decantation&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
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</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Cut-off grade&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
In resource/reserve estimation, the lowest grade of mineralized
material that can be economically extracted</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Cyanidation&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
A standard method of extracting gold and silver from crushed or
ground mineralized rock using sodium cyanide</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Cyanide leaching&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
The extraction of a precious metal from an ore by its dissolution in
a cyanide solution</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Dilution&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Waste which is commingled with ore in the mining process</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Dore&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
A mixture of gold and other metals, mostly silver, usually the raw
metal produced from a precious metal mine</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Electro-winning&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
The process of removal of gold from solution by the action of
electric</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">116</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
   <TD width="20%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="78%">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
currents</FONT></TD>
</TR>

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    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Elution&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
The process of desorption (taking of gold from carbon)</FONT></TD>
</TR>

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    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Epithermal&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
A term applied to deposits formed at shallow depths from ascending
solutions of moderate temperatures</FONT></TD>
</TR>

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    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Exsolution&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
To be removed from solution</FONT></TD>
</TR>

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    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Feasibility study&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
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</FONT></TD>
</TR>

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    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Flocculent&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
An additive introduced to promote precipitation in a solution.</FONT></TD>
</TR>

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    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Free gold&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Gold not chemically or physically entrapped and hence amenable to
relatively simple extraction processes.</FONT></TD>
</TR>

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    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Friable&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Said of a rock or mineral that crumbles naturally or is easily
broken, pulverized, or reduced to powder, such as a soft or poorly
cemented sandstone.</FONT></TD>
</TR>

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    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Fumaroles&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Vents in a volcanic region from which gases and vapours emanate at
high temperatures</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;GAAP&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Generally accepted accounting principles.</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Geochemistry&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
The study of the variation of chemical elements in rocks and soils; a
method of exploration based on this</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Geotechnical&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Pertaining to the engineering properties of rocks and soils</FONT></TD>
</TR>

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    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Geothermal&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Pertaining to the heat of the earth&#146;s interior</FONT></TD>
</TR>

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    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Grade&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
The metal (or mineral) content per unit of rock</FONT></TD>
</TR>

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    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Grinding&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Reducing mineralized rock to the consistency of fine sand by crushing
the abrading in a rotating steel grinding mill</FONT></TD>
</TR>

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    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Gyratory Crusher&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
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.</FONT></TD>
</TR>

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    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Hydrological&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Pertaining to the science of hydrology</FONT></TD>
</TR>

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    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;kPa&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
A unit of pressure &#151; an abbreviation for &#147;kilopascals,
gauge&#148;.</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">117</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
   <TD width="20%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="78%">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Joint venture&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
An arrangement in which two entities unite to form a new,
jointly-owned entity to achieve a specific purpose.</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Lime&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Calcium oxide; artificially made from limestone</FONT></TD>
</TR>

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    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Limestone&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Rock composed mainly of calcium carbonate</FONT></TD>
</TR>

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    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Lithology&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
The physical characteristics of rock</FONT></TD>
</TR>

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    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Mafic&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Descriptive of rocks containing or made up of ferro-magnesian
minerals (usually dark in color)</FONT></TD>
</TR>

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    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Magma; magmatic&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Liquid molten rock; pertaining to processes and rocks involving magma</FONT></TD>
</TR>

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    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Marcasite&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Iron sulfide mineral (a form of pyrite)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Metallurgy&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
The science and technology of metals, usually pertaining to the
processing of metals and minerals in mining</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Mill feed grade&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
The grade of material feed to the mill, equivalent to received at mill</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Milling/mill&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
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</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Mineable&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
The portion of a resource for which extraction is technically and
economically feasible</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Mineral deposit&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
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.</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Net smelter returns&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
The value received for a mineral after refining, less the cost of
transporting the mineral to the refinery and the cost of refining</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Open pit&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Surface mining in which the ore is extracted from a pit. The geometry
of the pit may vary with the characteristics of the orebody.</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Ore&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Material that contains one or more minerals, at least one of which
has commercial value and which can be recovered at a profit</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Ore body&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
A continuous well defined mass of material of sufficient ore content
to make extraction economically feasible</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">118</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
   <TD width="20%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="78%">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Ore grade&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
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</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Ounces&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Troy ounces of 31.103 grams, or 1.097 Avoirdupois ounces</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Outcrop&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
That part of a rock formation exposed on surface</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Oxide ore&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
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</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Phyllic alteration&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Hydrothermal alteration of rocks involving the secondary formation of
quartz and sericite</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Pit shell&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Designed outline of an open pit mine containing all the open pit ore
reserves</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Pleistocene&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
A subdivision of geologic time, about 10,000 &#151; 2&nbsp;million years before
the present</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Potassic alteration&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Hydrothermal alteration of rock involving the secondary formation of
potash feldspar, commonly the mineral orthoclase, usually with
biotite</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Pressure oxidation&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
A method of processing refractory sulfide ore</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Propylitic alteration&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Hydrothermal alteration of basic rocks involving the secondary
formation of chlorite, epidote, calcite and sulfide</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Pyrite&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Iron sulfide mineral</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;RC hole&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
A reverse circulation drill hole produced by percussion drilling in
which rock cuttings are recovered instead of core. &#147;Reverse
circulation&#148; 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.</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Reactive sulfur&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
In mineral processing involving pressure oxidation, sulfur in the
form of sulfide</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Refining&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
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</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Refractory ore&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Ore not amenable to standard processing techniques</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Sampling&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Taking small pieces of rock at intervals along exposed mineralization
for assay (to determine the mineral content)</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">119</FONT>

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<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
   <TD width="20%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="78%">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;SAG&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
&#147;Semi-autogenous grinding&#148;, a method of comminution that utilizes the
rock fragments to assist in the grinding process</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Seismic&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Pertaining to shock waves that pass through the earth</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Shotcreting&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Application by pressure spraying of a setting medium with the
characteristics of concrete for stabilization of rock faces.</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Silt curtain&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
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</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Slurry&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
A fluid comprising fine solids suspended in a solution (generally<BR>
water containing additives)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Smelting&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Thermal processing whereby molten metal is liberated from
beneficiated ore or concentrate with impurities separating as lighter
slag</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Stockpile&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
A store of unprocessed ore or marginal grade material</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Stripping&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
The process of removing overburden to expose ore</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Stripping ratio&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
In open pit mining, the ratio of waste material to ore, usually
expressed as tonnes waste : tonnes ore</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Sulfide ore&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Ore characterized by the inclusion of metal in the crystal structure
of a sulfide mineral. This type of ore is often refractory ore</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Superannuation fund&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
A contributory pension fund.</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Surface mixed layer&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Uppermost layer of the ocean that is constantly mixed by wind and
wave action</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Tailings&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
The finely-ground waste product from ore processing</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">120</FONT>

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<P align="left"><FONT size="2"><B>Conversion Table</B>
</FONT>

<P align="left"><FONT size="2">Units of Measure
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="29%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="66%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;US$/ oz. gold&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
US dollars per troy ounce of gold</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;US$/ t ore&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
US dollars per tonne of ore</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;C&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Degrees Celsius</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;g Au/t&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Grams of gold per tonne</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;ha&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Hectares</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;kg&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Kilograms</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;kg Au/t&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Kilograms of gold per tonne</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;kPa&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
kilo Pascals</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;kt&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
kilo tonnes</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;m(2)&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Square meters</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;m(3)&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Cubic meters</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;mtpy&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Million tonnes per year</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;t/d&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Tonnes per day</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;t/h&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Tonnes per hour</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">Unit Equivalents
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="31%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="64%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;Celsius degrees&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
(Fahrenheit degrees minus 32.0) times 5/9</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;1 cubic meter&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
35.314 cubic feet</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;1 gram&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
0.03215 troy ounces</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;1 gram Au/tonne&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
0.02917 troy ounces gold/ton</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;1 hectare&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
2.471 acres</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;1 kilogram&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
2.205 pounds</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;1 kilometer&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
0.62 statute miles</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;1 kilopascal&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
0.145 pounds per square inch</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;1 kilo tonne&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
1102.31 short tons</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;1 meter&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
3.281 feet</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;1 millimeter&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
0.039 inches</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;1 square kilometer&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
0.3861 square miles</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;1 square meter&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
10.764 square feet</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&#147;1 tonne&#148;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
1.1023 short tons</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">121</FONT>

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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SIGNATURES
</FONT>

<P align="left"><FONT size="2">The registrant hereby certifies that it meets all of the requirements for
filing on Form&nbsp;20-F and that it has duly caused and authorized the undersigned
to sign this annual report on its behalf.
</FONT>

<P align="left"><FONT size="2">LIHIR GOLD LIMITED<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Registrant)
</FONT>
 <P align="left"><FONT size="2">/s/&nbsp;Neil Swan</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name:&nbsp;&nbsp; Neil Swan
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Title:&nbsp;&nbsp;&nbsp;&nbsp; Managing Director
</FONT>

<P align="left"><FONT size="2">Date:&nbsp;&nbsp;25 May 2003
</FONT>

<P align="center"><FONT size="2">122</FONT>

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<!-- link1 "Certification" -->
<DIV align="left"><A NAME="055"></A></DIV>

<P align="center"><FONT size="2">Certification
</FONT>

<P align="left"><FONT size="2">I, Neil Swan, certify that:
</FONT>
<P align="left"><FONT size="2">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I have reviewed this Annual Report on Form&nbsp;20-F of Lihir Gold Limited;
</FONT>

<P align="left"><FONT size="2">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based on my knowledge, this Annual Report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this Annual
Report;
</FONT>

<P align="left"><FONT size="2">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based on my knowledge, the financial statements, and other financial
information included in this Annual Report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this Annual Report;
</FONT>

<P align="left"><FONT size="2">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The registrant&#146;s other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules&nbsp;13a &#150; 14 and 15d &#150; 14) for the registrant and we have:
</FONT>

<P align="left"><FONT size="2">a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this Annual Report is being prepared;
</FONT>

<P align="left"><FONT size="2">b) evaluated the effectiveness of the registrant&#146;s disclosure controls and
procedures as of a date within 90&nbsp;days prior to the filing date of this Annual
Report (the &#147;Evaluation Date&#148;); and
</FONT>

<P align="left"><FONT size="2">c) presented in this Annual Report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
</FONT>

<P align="left"><FONT size="2">5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The registrant&#146;s other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrant&#146;s auditors and the audit committee of
registrant&#146;s board of directors (or persons performing the equivalent
function):
</FONT>

<P align="left"><FONT size="2">a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant&#146;s ability to record, process,
summarize and report financial data and have identified for the registrant&#146;s
auditors any material weaknesses in internal controls; and
</FONT>

<P align="left"><FONT size="2">b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant&#146;s internal controls;
and
</FONT>

<P align="left"><FONT size="2">6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The registrant&#146;s other certifying officer and I have indicated in this
Annual Report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
</FONT>

<P align="left"><FONT size="2">/s/ Neil Swan<BR>
<HR align="left" size="1" width="25%" noshade>
</FONT>

<P align="left"><FONT size="2"><I>Chief Executive Officer</I><BR>
Date: June 9 2003
</FONT>
<P align="right"><FONT size="2">&nbsp;</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center"><FONT size="2">Certification
</FONT>

<P align="left"><FONT size="2">I, Nick Lambeth, certify that:
</FONT>
<P align="left"><FONT size="2">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I have reviewed this Annual Report on Form&nbsp;20-F of Lihir Gold Limited;
</FONT>

<P align="left"><FONT size="2">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based on my knowledge, this Annual Report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this Annual
Report;
</FONT>

<P align="left"><FONT size="2">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based on my knowledge, the financial statements, and other financial
information included in this Annual Report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this Annual Report;
</FONT>

<P align="left"><FONT size="2">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The registrant&#146;s other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules&nbsp;13a &#150; 14 and 15d &#150; 14) for the registrant and we have:
</FONT>

<P align="left"><FONT size="2">a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this Annual Report is being prepared;
</FONT>

<P align="left"><FONT size="2">b) evaluated the effectiveness of the registrant&#146;s disclosure controls and
procedures as of a date within 90&nbsp;days prior to the filing date of this Annual
Report (the &#147;Evaluation Date&#148;); and
</FONT>

<P align="left"><FONT size="2">c) presented in this Annual Report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
</FONT>

<P align="left"><FONT size="2">5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The registrant&#146;s other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrant&#146;s auditors and the audit committee of
registrant&#146;s board of directors (or persons performing the equivalent
function):
</FONT>

<P align="left"><FONT size="2">a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant&#146;s ability to record, process,
summarize and report financial data and have identified for the registrant&#146;s
auditors any material weaknesses in internal controls; and
</FONT>

<P align="left"><FONT size="2">b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant&#146;s internal controls;
and
</FONT>

<P align="left"><FONT size="2">6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The registrant&#146;s other certifying officer and I have indicated in this
Annual Report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
</FONT>

<P align="left"><FONT size="2">/s/ Nick Lambeth<BR>
<HR align="left" size="1" width="25%" noshade>
</FONT>
<P align="left"><FONT size="2"><I>Chief Financial Officer</I><BR>
Date: June 9 2003
</FONT>
<P align="right"><FONT size="2">&nbsp;</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="left"><FONT size="2"><B>Exhibit&nbsp;Index</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="80%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="12%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="left"><FONT size="1"><B>Exhibit</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="left"><FONT size="1"><B>Description</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>Page</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2"><B>1</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Constitution of Lihir Gold Limited, effective as of April&nbsp;28,
1998. (incorporated by reference to Lihir&#146;s annual report on
Form&nbsp;20-F for the fiscal year ended December&nbsp;31, 2000)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2"><B>2 (a)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
European Investment Bank Finance Contract between EIB, MRL and
Lihir, dated December&nbsp;28, 1995 (incorporated by reference to
Lihir&#146;s annual report on Form&nbsp;20-F for the fiscal year ended
December&nbsp;31, 1996)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2"><B>2 (b)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Subordinated On-Lending Agreement Amending Agreement No.&nbsp;2 between
Mineral Resources Development Company Limited dated November&nbsp;22,
2000. (incorporated by reference to Lihir&#146;s annual report on
Form&nbsp;20-F for the fiscal year ended December&nbsp;31, 2000)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2"><B>2 (c)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Syndicated Facility Agreement among Lihir, ABN AMRO Australia
Limited, ABN AMRO N.V. (Australian Branch) dated November&nbsp;22,
2000. (incorporated by reference to Lihir&#146;s annual report on
Form&nbsp;20-F for the fiscal year ended December&nbsp;31, 2000)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2"><B>2 (d)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Lihir Gold Security Trust Deed among Lihir, ABN AMRO Australia
Limited, Mineral Resources Development Company Limited, Niugini
Mining Limited, Niugini Mining (Australia) Pty Ltd and certain
hedge counter-parties, dated November&nbsp;22, 2000. (incorporated by reference to Lihir&#146;s annual report on
Form&nbsp;20-F for the fiscal year ended December&nbsp;31, 2000)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2"><B>2 (e)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Lihir Gold Present Assets Charge (Australia) among Lihir between
Lihir and ABN AMRO Australia Limited dated November&nbsp;22, 2000. (incorporated by reference to Lihir&#146;s annual report on
Form&nbsp;20-F for the fiscal year ended December&nbsp;31, 2000)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2"><B>2 (f)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Lihir Gold Future Assets Charge (Australia) among Lihir and ABN
AMRO Australia Limited dated November&nbsp;22, 2000. (incorporated by reference to Lihir&#146;s annual report on
Form&nbsp;20-F for the fiscal year ended December&nbsp;31, 2000)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2"><B>2 (g)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Lihir Gold Offshore Assets Charge among Lihir and ABN AMRO
Australia Limited dated November&nbsp;22, 2000. (incorporated by reference to Lihir&#146;s annual report on
Form&nbsp;20-F for the fiscal year ended December&nbsp;31, 2000)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2"><B>2 (h)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Lihir Gold Deed of Security (PNG)&nbsp;among Lihir and ABN AMRO
Australia Limited dated November&nbsp;22, 2000. (incorporated by reference to Lihir&#146;s annual report on
Form&nbsp;20-F for the fiscal year ended December&nbsp;31, 2000)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2"><B>4 (a)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Special Mining Lease, dated as of March&nbsp;17, 1995, between Lihir
and the PNG Government (incorporated by reference to Lihir&#146;s Form
F-1 filed September&nbsp;6, 1995).</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2"><B>4 (b)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Mining Development Contract, dated as of March&nbsp;17, 1995, between
Lihir and the PNG Government (incorporated by reference to Lihir&#146;s
Form&nbsp;F-1 filed September&nbsp;6, 1995).</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2"><B>4 (c)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Lihir Project Management Agreement, dated as of March&nbsp;17, 1995,
between Lihir and Lihir Management Company (incorporated by
reference to Lihir&#146;s Form&nbsp;F-1 filed September&nbsp;6, 1995).</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2"><B>4 (d)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Technical Support Agreement, dated as of June&nbsp;30, 1995, between
Lihir Management Company and Rio Tinto (incorporated by reference
to Lihir&#146;s Form&nbsp;F-1 filed September&nbsp;6, 1995).</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2"><B>4 (e)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Compensation Agreement for Land, Crops, Water and Air, dated as of
April&nbsp;26, 1995, between Lihir Management Company, Lihir Mining
Area Landowners Association (incorporated by reference to
Lihir&#146;s Form&nbsp;F-1 filed September&nbsp;6, 1995)</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">&nbsp;</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="80%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
<TD width="12%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="left"><FONT size="1"><B>Exhibit</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="left"><FONT size="1"><B>Description</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>Page</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
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&#146;s Form&nbsp;F-1 filed
September&nbsp;6, 1995).</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2"><B>4 (f)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
PutPut and Ladolam Relocation Agreement, dated as of April&nbsp;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&#146;s Form&nbsp;F-1 filed September&nbsp;6, 1995).</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2"><B>4 (g)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Contract Explosives Services Contract, dated as of March&nbsp;14, 1996,
between Lihir Management Company for on behalf of Lihir and ICI
Dulux Papua New Guinea Pty Limited, and Deed of Assignment
relating to same (incorporated by reference to Lihir&#146;s annual
report on Form&nbsp;20-F for the fiscal year ended December&nbsp;31, 1995)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2"><B>4 (h)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Deed of Variation to Contract Explosives Services Contract, dated
as of June&nbsp;4, 1999, between Lihir Management Company for on behalf
of Lihir, Thiess Contractors (PNG)&nbsp;Pty Ltd, Roche Bros (PNG)&nbsp;Pty
Ltd, Orica Papua New Guinea Limited and Orica Australia Pty Ltd.  (incorporated by reference to Lihir&#146;s annual report on
Form&nbsp;20-F for the fiscal year ended December&nbsp;31, 2000)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2"><B>4 (i)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Agreement for the Services of Professor Ross Garnaut as Chairman
of Lihir, dated as of May&nbsp;19, 1995 between Lihir and
Maccullochella Pty Ltd. (incorporated by reference to Lihir&#146;s
annual report on Form&nbsp;20-F for the fiscal year ended
December&nbsp;31, 2000).</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2"><B>4 (j)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Extension agreement for the Services of Professor Ross Garnaut as
Chairman of Lihir, dated as of January&nbsp;31, 2001 between Lihir and
Maccullochella Pty Ltd. (incorporated by reference to Lihir&#146;s
annual report on Form&nbsp;20-F for the fiscal year ended
December&nbsp;31, 2000).</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2"><B>8</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Significant Subsidiaries.</FONT></TD>
</TR>
</TABLE>
</CENTER>


<P align="center"><FONT size="2">&nbsp;</FONT>



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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>


<P align="center"><FONT size="2"><B>FINANCIAL STATEMENTS</B>
</FONT>


<P align="center"><FONT size="2"><B>LIHIR GOLD LIMITED</B>
</FONT>


<P align="left"><FONT size="2"><B>Audited financial statements</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%">
<TR valign="bottom">
    <TD width="94%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Report of the independent accountants</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">F-A</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Profit and loss accounts for the years ended December&nbsp;31, 2002, 2001, and 2000</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">F-2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Balance sheets as at December&nbsp;31, 2002, 2001, and 2000</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">F-3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Statements of changes in equity for the years ended December&nbsp;31, 2002, 2001, and 2000</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">F-4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Statements of cash flows for the years ended December&nbsp;31, 2002, 2001, and 2000</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">F-5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Notes to the financial statements</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">F-6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">&nbsp;</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left"><FONT size="2"><B>Report of Independent Accountants<BR>
To the Board of Directors and Shareholders of Lihir Gold Limited</B>
</FONT>

<P align="left"><FONT size="2">In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of income, of cashflows and of changes in equity
present fairly, in all material respects, the financial position of Lihir Gold
Limited and its subsidiaries at December&nbsp;31, 2002, 2001, and 2000, and the
results of their operations and their cash flows for the years then ended, in
conformity with International Financial Reporting Standards. These financial
statements are the responsibility of the Company&#146;s management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards in the United States of America and
International Standards on Auditing. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for the
opinion expressed above.
</FONT>

<P align="left"><FONT size="2">International Financial Reporting Standards vary in certain significant
respects from accounting principles generally accepted in the United States of
America. The application of the latter would have affected the determination
of consolidated operating profit after income tax for the years ended December
31, 2002, 2001, and 2000, and the determination of consolidated shareholders&#146;
equity at December&nbsp;31, 2002, 2001, and 2000, to the extent summarised in Note
29 to the financial statements.
</FONT>

<P align="left"><FONT size="2"><IMG src="y87848y8784800a.gif" alt="-s- PricewaterhouseCoopers">
</FONT>
<P align="left"><FONT size="2">PricewaterhouseCoopers
</FONT>
<P align="left"><FONT size="2">Port Moresby, Papua New Guinea<BR>
March&nbsp;7, 2003
</FONT>
<P align="center"><FONT size="2">F-A</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center"><FONT size="2"><B>LIHIR GOLD LIMITED<BR>
CONSOLIDATED PROFIT AND LOSS ACCOUNTS<BR>
For the Years Ended December&nbsp;31, 2002, 2001 and 2000</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="90%">
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="61%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Note</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>&nbsp;</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$'000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$'000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$'000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Sales revenue</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">213,189</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">233,155</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">226,583</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Operating expenses</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Mining expenses</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(72,966</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(65,724</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(58,850</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Processing costs</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(30,446</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(31,842</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(32,272</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Power generation costs</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(24,103</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(24,450</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(23,247</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">General and administrative costs</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(31,300</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(21,409</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(24,062</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Refining, royalty and management fees</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(7,933</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(7,961</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(8,315</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Costs deferred and transferred to inventories</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">19,556</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,080</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6,583</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Impairment (charge) / reversal: mine properties, deferred mining costs</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">37,893</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(120,645</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Impairment of low grade stockpile</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(4,392</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(5,841</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(7,965</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Contract mining cancellation fees</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(7,706</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Depreciation and amortisation</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(27,135</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(31,899</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(35,115</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total operating expenses</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(140,826</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(186,046</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(311,594</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Profit / (loss)&nbsp;from operating activities</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">72,363</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">47,109</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(85,011</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Interest income</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,015</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,805</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,822</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Finance costs</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(3,705</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(6,164</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(17,166</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">

<TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Profit / (loss)&nbsp;from ordinary activities before taxation</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">69,673</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">42,750</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(99,355</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Income tax</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">15</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(16,426</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">16,426</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Profit / (loss)&nbsp;from ordinary activities after taxation</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">53,247</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">59,176</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(99,355</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Earnings per share</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">27</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">- Basic (US$/share)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">.047</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">.052</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(0.087</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">- Diluted (US$/share)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">.047</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">.052</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(0.087</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The accompanying notes form part of these financial statements.
</FONT>

<P align="center"><FONT size="2">F-2</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center"><FONT size="2"><B>LIHIR GOLD LIMITED<BR>
CONSOLIDATED BALANCE SHEET<BR>
As At December&nbsp;31, 2002, 2001 and 2000</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%">
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="LEFT"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>

<TD nowrap align="center" colspan="3"><FONT size="1"><B>Note</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center">&nbsp;</TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>ASSETS</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">CURRENT ASSETS</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cash and cash equivalents</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">33,817</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">37,915</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">40,823</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Derivative financial instruments</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">24</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,948</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">30,633</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Inventories</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">46,972</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">32,843</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">40,540</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Receivables</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,652</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">15,127</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">28,171</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Prepayments</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">422</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">456</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,640</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Deferred hedging costs</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">24</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,230</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Deferred mining costs</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">11</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,185</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">862</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">9,215</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">TOTAL CURRENT ASSETS</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">91,996</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">117,836</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">124,619</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">NON-CURRENT ASSETS</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Derivative financial instruments</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">24</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">10,037</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">31,969</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Receivables</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,793</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,180</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,015</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Deferred mining costs</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">11</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">17,720</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">16,440</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5,240</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Mine properties</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">12</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">454,138</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">417,830</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">411,586</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Deferred hedging costs</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">24</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,115</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">TOTAL NON-CURRENT ASSETS</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">484,688</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">467,419</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">422,956</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">TOTAL ASSETS</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">576,684</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">585,255</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">547,575</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>LIABILITIES AND SHAREHOLDERS&#146; EQUITY</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">CURRENT LIABILITIES</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Bank overdraft</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,297</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Derivative financial instruments</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">24</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6,133</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Accounts payable</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">13</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">14,382</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">26,612</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">24,823</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Provisions</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">14</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,218</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,927</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,423</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Borrowings</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">22</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,510</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,775</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,510</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Deferred hedging income</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">24</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">32,071</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">TOTAL CURRENT LIABILITIES</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">27,540</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">33,314</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">64,827</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">NON CURRENT LIABILITIES</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Derivative financial instruments</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">24</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">71,619</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,846</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Provisions</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">14</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">14,067</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">12,289</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">10,613</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Borrowings</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">22</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">37,048</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">40,558</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">69,262</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Deferred hedging income</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">24</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">19,417</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">TOTAL NON CURRENT LIABILITIES</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">122,734</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">55,693</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">99,292</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">TOTAL LIABILITIES</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">150,274</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">89,007</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">164,119</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">

<TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">SHAREHOLDERS&#146;
EQUITY<BR>
Share capital</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">19</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">873,822</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">873,822</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">873,822</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Fair value and other reserves</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(69,469</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">53,616</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Accumulated losses</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(377,943</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(431,190</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(490,366</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">TOTAL SHAREHOLDERS&#146; EQUITY</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">426,410</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">496,248</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">383,456</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">TOTAL LIABILITIES AND SHAREHOLDERS&#146; EQUITY</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">576,684</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">585,255</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">547,575</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The accompanying notes form part of these financial statements.
</FONT>

<P align="center"><FONT size="2">F-3</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center"><FONT size="2"><B>LIHIR GOLD LIMITED<BR>
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY<BR>
For the Years Ended December&nbsp;31, 2002, 2001 and 2000</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%">
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Share</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Retained</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Capital</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Fair value</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Earnings /</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>(Note 19)</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Reserves</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>(Losses)</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Total</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$'000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$'000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$'000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$'000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Balance at January&nbsp;1, 2000</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>819,225</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>&#151;</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(391,011</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>428,214</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Profit / (loss)&nbsp;for the year</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(99,355</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(99,355</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Issue of share capital</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">54,597</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">54,597</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Balance at December&nbsp;31, 2000</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>873,822</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>&#151;</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(490,366</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>383,456</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Profit / (loss)&nbsp;for the year</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">59,176</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">59,176</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Effect of adopting IAS39</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">97,559</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">97,559</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Deferred tax on adoption</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(16,325</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(16,325</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Fair value gains on cash flow hedges</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">26,102</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">26,102</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net movement of deferred tax</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(101</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(101</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Reclassified and reported in the
income statement</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(53,619</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(53,619</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Balance at December&nbsp;31, 2001</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>873,822</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>53,616</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(431,190</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>496,248</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Profit / (loss)&nbsp;for the year</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">53,247</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">53,247</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Fair value losses on cash flow hedges</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(114,095</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(114,095</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net movement of deferred tax</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">16,426</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">16,426</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Reclassified and reported in the
income statement</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(25,416</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(25,416</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Balance at December&nbsp;31, 2002</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>873,822</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(69,469</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(377,943</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>426,410</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The accompanying notes form part of these financial statements.
</FONT>

<P align="center"><FONT size="2">F-4</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center"><FONT size="2"><B>LIHIR GOLD LIMITED<BR>
CONSOLIDATED STATEMENT OF CASH FLOWS<BR>
For the Years Ended December&nbsp;31, 2002, 2001 and 2000</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%">
<TR valign="bottom">
    <TD width="55%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Note</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>&nbsp;</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$'000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$'000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$'000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">CASH FLOWS FROM OPERATING ACTIVITIES</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Receipts from operating activities</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">199,201</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">208,946</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">213,249</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Payments arising from operating activities</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(173,988</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(142,772</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(160,057</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Interest received</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,015</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,805</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,822</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Interest and finance charges paid to third parties</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(3,411</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(5,898</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(16,886</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Net cash flows from operating activities</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>8</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>22,817</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>62,081</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>39,128</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">CASH FLOWS FROM INVESTING ACTIVITIES</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Purchase of property plant and equipment</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(25,981</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(36,898</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(54,681</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cash inflows on acquisition of subsidiary</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">52,541</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Proceeds of disposal of fixed assets</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,544</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">349</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">149</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Net cash used in investing activities</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(24,437</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(36,549</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(1,991</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">CASH FLOWS FROM FINANCING ACTIVITIES</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Proceeds from borrowings</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Proceeds from restructure of hedge book</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">42,600</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Repayment of term debt</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(3,775</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(28,440</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(85,789</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Proceeds of equity issue</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Net cash used in financing activities</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(3,775</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(28,440</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(43,189</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Net increase/(decrease) in cash held</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(5,395</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(2,908</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(6,052</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cash balance at beginning of year</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">37,915</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">40,823</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">46,875</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net increase/(decrease) in cash held</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(5,395</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,908</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(6,052</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Cash balance at end of year</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>7</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>32,520</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>37,915</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>40,823</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The accompanying notes form part of these financial statements.
</FONT>

<P align="center"><FONT size="2">F-5</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center"><FONT size="2"><B>LIHIR GOLD LIMITED<BR>
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS</B>
</FONT>


<P align="left"><FONT size="2"><B>NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES</B>
</FONT>

<P align="left"><FONT size="2">These financial statements are presented in accordance with the Papua New
Guinea Companies Act 1997, and comply with applicable financial reporting
standards and other mandatory professional reporting requirements approved for
use in Papua New Guinea by the Accounting Standards Board (ASB). These
financial statements have been prepared in accordance with International
Financial Reporting Standards, which have been adopted by the ASB as the
applicable financial reporting framework.
</FONT>

<P align="left"><FONT size="2">The financial statements have also been prepared on the basis of historical
costs except as disclosed in the accounting policies below. For example,
financial instruments are shown at fair value. The accounting policies have
been consistently applied, unless otherwise stated.
</FONT>

<P align="left"><FONT size="2">The following is a summary of the significant accounting policies adopted in
the preparation of the consolidated financial statements.
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2"><B>(a)</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2"><B>Exploration and evaluation expenditure</B></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">The Group expenses exploration and evaluation costs as incurred.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2"><B>(b)</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2"><B>Development properties</B></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">A property is classified as a development property when a mine plan has
been prepared, proved and probable resources have been established, and
the Group has decided to commercially develop the property. Development
expenditure is accumulated separately for each area of interest in which
economically recoverable mineral reserves have been identified and are
reasonably assured.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">All expenditure incurred prior to the commencement of commercial levels of
production from each development property is carried forward to the extent
to which recoupment out of revenue to be derived from the sale of
production from the relevant development property, or from sale of that
property, is reasonably assured.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">No amortisation is provided in respect of development properties until
they are reclassified as &#147;Mine Properties&#148;, following the commencement of
commercial production. For the period under review the Group has had no
properties in the development stage. No development expenditure is
currently being incurred or capitalised.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2"><B>(c)</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2"><B>Mine properties</B></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">Mine properties represent the accumulation of all development expenditures
incurred by or on behalf of the Group in relation to areas of interest in
which mining of a mineral resource has commenced.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">When future economic benefits are established by further development
expenditure in respect of a mine property after the commencement of
production, such expenditure is carried forward as part of the cost of
that mine property. Otherwise such expenditure is classified as part of
the cost of production.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">Amortisation of costs is provided for using the units-of-production
method, separate calculations being made for each mineral resource. The
units-of-production basis results in an amortisation charge proportional
to the depletion of estimated recoverable gold ounces contained in proved
and probable ore reserves.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">Where a change in estimated recoverable gold ounces contained in proved
and probable ore reserves is made, depreciation and amortisation of mine
properties is accounted for prospectively in the period of change and
future periods.</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">F-6</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>




<P align="center"><FONT size="2"><B>LIHIR GOLD LIMITED<BR>
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS</B>
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2"><B>(d)</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2"><B>Capitalisation of financing costs</B></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">Interest and other financing costs that are directly attributable to the
acquisition, construction or production of a qualifying asset are
capitalised as part of the cost of that asset. To the extent that funds
are borrowed specifically for the purpose of obtaining a qualifying asset,
the amount of borrowing costs eligible for capitalisation on that asset is
determined as the actual borrowing costs incurred on that borrowing during
the period. Capitalisation of borrowing costs ceases when substantially
all the activities necessary to prepare the qualifying asset for its
intended use or sale are complete. Interest earned on the temporary
investment of borrowed funds and funds received in connection with the
sale of equity securities prior to the expenditure being made is deducted
from interest paid on the borrowed funds in arriving at the amounts so
capitalised.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">Prior to the commencement of commercial production in 1997, the amount of
interest costs eligible for capitalisation were based on actual interest
costs incurred, as the borrowings were incurred to fund development of the
mine property. Capitalisation of borrowing costs ceased following the
commissioning of the assets upon commencement of commercial production.
These are amortised using the units-of-production method based on
estimated recoverable gold ounces contained in proved and probable ore
reserves. For the years ended 31 December 2002, 2001 and 2000, no
interest costs were capitalised.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2"><B>(e)</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2"><B>Mine buildings, plant and equipment</B></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">The cost of each item of buildings, machinery and equipment is depreciated
over its expected useful life. For the majority of assets this is
accomplished using the units-of-production method based on estimated
recoverable gold ounces contained in proved and probable ore reserves,
although some assets are depreciated using a percentage based on time.
Each item&#146;s economic life has due regard to both physical life limitations
and to present assessments of economically recoverable reserves of the
mine property (where appropriate) and to possible future variations in
those assessments. Estimates of remaining useful lives are made on a
regular basis for all assets, with annual reassessments for major items.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">The total net carrying values of mine building, plant and equipment at
each mine property are reviewed regularly and, to the extent to which
these values exceed their recoverable amounts, that excess is fully
provided against in the financial year in which this is determined.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">Major spares purchased specifically for particular plant and
equipment are included in the cost of the plant and equipment and are
depreciated over the expected useful life of the item of plant and
equipment.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">Approximately 90% of all fixed assets are depreciated based on the
units-of-production method, using recoverable ounces of gold contained in
proved and probable ore reserves as the determinant. The remaining life
of the mine is approximately 24&nbsp;years. Those assets depreciated on a
straight line basis are done so predominantly over a life of five years.</FONT></TD>
</TR>
</TABLE>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
    <TD width="74%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Percentage</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Percentage</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>&nbsp;</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Depreciated</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Depreciated</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>&nbsp;</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>As</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>As</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="LEFT"><FONT size="1"><B><B>Fixed Asset Classification</B></B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Units-of-Use</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Straight Line</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Deferred Expenditure</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">100</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Land &#038; Buildings</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">100</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Plant &#038; Equipment</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">89</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">11</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Grand Total</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>90</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>%</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>10</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>%</B></FONT></TD>
</TR>
</TABLE>
</CENTER>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">The classification of &#147;Land and Buildings&#148; does not include freehold land
as depreciable assets. The Company does not own any freehold land, and
only occupies land by leasehold tenure. All lease costs are expensed as
incurred.</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">F-7</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>




<P align="center"><FONT size="2"><B>LIHIR GOLD LIMITED<BR>
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS</B>
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2"><B>(f)</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2"><B>Remaining mine life</B></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">In estimating the remaining life of the mine for the purpose of
amortisation and depreciation calculations, due regard is given, not only
to the amount of remaining recoverable gold ounces contained in proved and
probable ore reserves, but also to limitations which could arise from the
potential for changes in technology, demand, product substitution and
other issues which are inherently difficult to estimate over a lengthy
time frame.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2"><B>(g)</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2"><B>Impairment of assets</B></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">Impairments of assets are recognised whenever the carrying amount of an
asset exceeds its recoverable value. The recoverable amount is measured
as the higher of net selling price and value in use. Value in use for
individual assets is calculated by discounting future cash flows using a
risk adjusted pre-tax discount rate.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">In 2000, an impairment loss was recognised as the recoverable amount of
the company&#146;s cash generating unit was less than the carrying amount. The
cash generating unit comprises mine properties and deferred mining costs.
The recoverable amount was derived from value in use calculations based on
discounted cash flows, a long-term gold price assumption of US$300 and a
pre-tax real discount rate of 6%.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">In 2001, after applying the same principles as in 2000, no impairment was
required to be recognised.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">In 2002, after applying the same principles as the previous years and
revisiting critical assumptions, including life of mine, remaining
reserves, a long term gold price assumption of $US305 (2001: US$280) and a
pre-tax real discount rate of 7.0% (2001: 6%), an impairment reversal to
the value of $US37.9M was required in accordance with IAS 36.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2"><B>(h)</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2"><B>Restoration, rehabilitation and environmental expenditure</B></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">In accordance with IAS 37 &#147;Provisions, Contingent Liabilities and
Contingent Assets&#148;, a provision is raised for anticipated expenditure to
be made on restoration and rehabilitation to be undertaken after mine
closure. These costs include the costs of dismantling and demolition of
infrastructure or decommissioning, the removal of residual material and
the remediation of disturbed areas. The provision is only raised in
respect of damage incurred up to balance date. The amount of any
provision recognised is the full amount that has been estimated based on
current costs to be required to settle present obligations, discounted
using a pre-tax risk-free interest rate of 2.5%. Estimates of future costs
are reassessed annually.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">A corresponding asset, which represents future economic benefits, is
raised and subsequently amortised using the units of production method.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">The Company&#146;s restoration, rehabilitation and environmental expenditure
policy identifies the environmental, social and engineering issues to be
considered and the procedures to be followed when providing for costs
associated with the site closure. Site rehabilitation and closure involves
the dismantling and demolition of infrastructure not intended for
subsequent community use, the removal of residual materials and the
remediation of disturbed areas. Community requirements and long-term land
use objectives are also taken into account.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2"><B>(i)</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2"><B>Inventories</B></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">Inventories of ore and metal are physically measured or estimated and
valued at the lower of cost and net realisable value.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">Cost comprises direct material, direct labour and transportation
expenditure in getting such inventories to their existing location and
condition, together with an appropriate portion of fixed and variable
overhead expenditure and depreciation and amortisation, based on weighted
average costs incurred during the period in which such inventories are
produced. Net realisable value is the amount estimated to be obtained from
sale of the item of inventory in the normal course of business, less any
anticipated costs to be incurred prior to its sale.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">Inventories of consumable supplies and spare parts expected to be used in
production are valued at the lower of weighted average cost, which
includes the cost of purchase as well as transportation and statutory
charges, and net realisable value.</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">F-8</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>




<P align="center"><FONT size="2"><B>LIHIR GOLD LIMITED<BR>
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS</B>
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>(j)</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>Deferred mining costs</B></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Direct expenditure on mining is brought to account for each phase of the
mine&#146;s development based on the estimated ratio of waste to ore for that
phase. During the mining period the actual ratio of waste to ore removed
for each phase varies from year to year. In periods where more than the
average amount of waste is removed the surplus is transferred to the
deferred mining cost account. It is subsequently expensed during periods
where the waste to ore ratio is less than the average. The average amount
of waste to be removed is assessed according to each mining phase, and not
over the entire life of the mine. The impact of this method of accounting
for stripping costs smoothes the cost of waste removal over the life of
each mining phase, as opposed to expensing the cost of waste removal as
incurred. There is mixed accounting practice in this area with some
mining companies expensing waste removal costs as incurred, with the
effect of creating greater volatility in reported earnings.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">The current portion of the deferred mining costs represent the unamortised
costs that are expected to be recouped within 12&nbsp;months as mining is
completed for that phase.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>(k)</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>Revenue recognition</B></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Sales are recognised as revenue only when there has been a passing of
title and risk to the customer, and:</FONT></TD>
</TR>
</TABLE>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">the product is in a form suitable for delivery and no further
processing is required by, or on behalf of, the Group;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">the quantity and quality (grade)&nbsp;of the product can be
determined with reasonable accuracy;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">the product has been dispatched to the customer and is no
longer under the physical control of the Group (or property in the
product has earlier passed to the customer);</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">the selling price can be measured reliably;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">it is probable that the economic benefits associated with the transaction will flow to the Group; and</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">the costs incurred or to be incurred in respect of the transaction can be measured reliably.</FONT></TD>
</TR>
</TABLE>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Sales revenue represents the gross proceeds receivable from the
customer.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>(l)</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>Accounting for derivative financial instruments and hedging
activities</B></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Derivative financial instruments are initially recognised in the balance
sheet at cost and are subsequently remeasured at their fair values. On
the date a derivative contract is entered into, the Group designates the
contract as a hedge against specific future production. The method of
recognising the resulting gain or loss is dependent on the nature of the
item being hedged.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Changes in the fair value of derivatives that are designated against
future production, qualify as cash flow hedges and are deemed highly
effective, are recognised in equity. Amounts deferred in equity are
transferred to the income statement and classified as revenue in the same
periods during which the hedged gold sales affect the income statement.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Certain derivative instruments do not qualify for hedge accounting under
the specific rules in IAS 39. Changes in the fair value of any derivative
instruments that do not qualify for hedge accounting under IAS 39 are
recognised immediately in the income statement.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">When a hedging instrument expires or is sold, or when a hedge no longer
meets the criteria for hedge accounting under IAS 39, any cumulative gain
or loss existing in equity at that time remains in equity and is
recognised when the committed or forecasted production is ultimately
recognised in the income statement. However, if the committed or
forecasted production is no longer expected to occur, the cumulative gain
or loss reported in equity is immediately transferred to the income
statement.</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">F-9</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>




<P align="center"><FONT size="2"><B>LIHIR GOLD LIMITED<BR>
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS</B>
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">The Group documents at the inception of the transaction the relationship
between hedging instruments and hedged items, as well as its risk
management objective and strategy for undertaking various hedge
transactions. This process includes linking all derivatives designated as
hedges to specific forecast gold sales. The Group also documents its
assessment, both at the hedge inception and on an ongoing basis, whether
the derivatives that are used in hedging transactions are highly effective
in offsetting changes in fair values or cash flows of hedged items.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">In assessing the fair value of non-traded derivatives and other financial
instruments, the Group obtains a valuation from an independent external
party.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>(m)</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>Foreign currency translation</B></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">As the Company&#146;s revenue is denominated in US dollars and the majority of
its fixed asset purchases and costs are in US dollars or currencies
related to US dollars, the Company&#146;s Directors have adopted the US dollar
as the Company&#146;s measurement and reporting currency.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Foreign currency transactions (other than US dollars) are initially
translated into US currency at the rate of exchange at the date of the
transaction. At the date of the balance sheet, amounts payable and
receivable in foreign currencies are translated to US dollars at rates of
exchange current at that date. Resulting exchange differences are brought
to account in determining the profit or loss for the year.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>(n)</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>Income tax</B></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Tax effect accounting procedures are followed using the liability method
for all temporary differences arising between the tax bases of assets and
liabilities and their carrying values for financial reporting purposes.
Income tax on temporary differences is set aside to the deferred tax
liability and deferred tax asset accounts at current enacted tax rates.
Deferred tax assets relating to deductible temporary differences and tax
losses are only carried forward as an asset to the extent that it is
probable that future taxable profit will be available against which the
deductible temporary differences and tax losses can be utilised.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>(o)</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>Leases</B></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Leases of property, plant and equipment where substantially all the risks
and benefits incidental to the ownership of the asset, but not the legal
ownership are assumed by the Group, are classified as finance leases.
Finance leases are capitalised, recording an asset and liability equal to
the present value of the minimum lease payments, including any guaranteed
residual values. Leased assets are amortised over the shorter of their
estimated useful lives or the lease term. Lease payments are allocated
between the reduction of the lease liability and the lease interest
expense for the period.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Lease payments for operating leases, where substantially all the risks and
benefits remain with the lessor, are charged as expenses in the periods in
which they are incurred.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Penalties paid for early settlement of leases are expensed.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>(p)</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>Cash and Cash Equivalents</B></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">For the purpose of the statement of cash flows and balance sheet, cash
includes:</FONT></TD>
</TR>
</TABLE>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">(i)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">cash on hand and at call deposits with banks or financial
institutions, net of bank overdrafts; and</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">(ii)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">investments in money market instruments with less than 90&nbsp;days
to maturity from the date of acquisition.</FONT></TD>
</TR>
</TABLE>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>(q)</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>Comparative figures</B></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Where necessary, comparative figures have been adjusted to conform with
changes in presentation in the current year.</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">F-10</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>




<P align="center"><FONT size="2"><B>LIHIR GOLD LIMITED<BR>
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS</B>
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>(r)</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>Rounding of amounts</B></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">The Financial Statements have been rounded to the nearest thousand
dollars.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>(s)</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>Consolidation</B></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Subsidiary undertakings, which are those entities in which the Group has
an interest of more than one half of the voting rights or otherwise has
power to exercise control over the operations, are consolidated.
Subsidiaries are consolidated from the date on which control is
transferred to the Group and are no longer consolidated from the date that
control ceases. All intercompany transactions, balances and unrealised
gains and losses on transactions between group companies are eliminated.
Where necessary, accounting policies for subsidiaries have been changed to
ensure consistency with the policies adopted by the Group. In the
separate financial statements of the Company, the Company accounts for
investments in subsidiaries at cost less any impairment.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>(t)</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>Significant risks and uncertainties</B></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">The Lihir operation is subject to the provisions of the PNG Mining
Act 1992 which governs the granting of mining rights and the
conditions upon which those rights may be terminated. In particular,
the Company is party to a mining development contract, dated 17 March
1995 (the &#147;Mining Development Contract&#148;), with the PNG Government
which sets forth the terms upon which the Company may exercise its
rights under the Special Mining Lease which governs the Lihir
operation. Under certain limited circumstances, the PNG Government
may terminate the Mining Development Contract and therefore, the
Special Mining Lease. Any such termination would prohibit the
continued operation of the Lihir operation.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2"><B>(u)</B></FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>Use of Estimates</B></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">The preparation of Financial Statements in accordance with International
Financial Reporting Standards requires management to make estimates and
assumptions that affect the amounts reported in the financial statements
and accompanying notes. The most significant estimates and assumptions
relate to the long-term gold price, mineral reserves and remaining mine
lives, provision for restoration and rehabilitation obligations,
recoverability of deferred tax assets, recoverability of long-lived assets
(including ore stock piles), depreciation and amortisation. Actual
results could differ from those estimates and may affect amounts reported
in future periods. Management believes that the estimates are reasonable.</FONT></TD>
</TR>
</TABLE>


<P align="center"><FONT size="2">F-11</FONT>



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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>


<P align="center"><FONT size="2"><B>LIHIR GOLD LIMITED<BR>
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS</B>
</FONT>


<P align="left"><FONT size="2"><B>NOTE 2: CHANGE IN ACCOUNTING POLICY</B>
</FONT>

<P align="left"><FONT size="2">The company adopted IAS 39 in 2001 as disclosed in accounting policy note 1
(l). In accordance with IAS 39, the comparative financial statements for the
year ended 31 December 2000 are not restated. The impact of this standard led
to an increase in profits before tax for the current year of US$2.3&nbsp;million
(2001: US$5.0&nbsp;million) and a net fair value loss, as disclosed in the statement
of changes in equity, of US$69.5&nbsp;million (2001: US$70.0&nbsp;million, net fair value
gain) before tax.
</FONT>

<P align="left"><FONT size="2">No new Standards applicable to Lihir, require changes to the Group&#146;s accounting
policies. There were no other changes in accounting policy for 2002.
</FONT>

<P align="left"><FONT size="2">Although a number of exposure drafts have been issued there are no new
effective International Financial Reporting Standards for 2003. Lihir does not
anticipate any changes in accounting policies for 2003.
</FONT>

<P align="left"><FONT size="2"><B>NOTE 3: SPECIAL MINING LEASE</B>
</FONT>

<P align="left"><FONT size="2">The Special Mining Lease was issued on 17 March 1995 and has a term of 40
years. Under the Mining Act it may be renewed for subsequent 20-year periods
at the discretion of the PNG Government.
</FONT>

<P align="left"><FONT size="2"><B>NOTE 4: REQUIREMENTS REGARDING CASH RESERVES</B>
</FONT>

<P align="left"><FONT size="2">The Papua New Guinea Central Banking (Foreign Exchange and Gold) Regulations
generally require PNG companies to hold all cash reserves in Kina. Prior
approval of the Bank of Papua New Guinea is required to convert funds from Kina
into other currencies.
</FONT>

<P align="left"><FONT size="2">Under the Mining Development Contract, however, the Company has permission to
retain funds in foreign currencies to meet its obligations.
</FONT>

<P align="left"><FONT size="2"><B>NOTE 5: DIVIDEND RESTRICTIONS</B>
</FONT>

<P align="left"><FONT size="2">The Syndicated Finance Facility signed on 22 November 2000 permits the payment
of dividends and other distributions only if certain conditions are met. Lihir
may generally at any time prior to the next Calculation Date (30 June and 31
December each year as defined in the agreement) withdraw all or part of any
excess over a specified minimum cash balance in an offshore account for its own
purposes (including any distribution or payment into an unsecured distribution
account) subject to a debt service cover ratio of not less than 1.25:1 and a
life of mine cover ratio of not less than 2.50:1.
</FONT>

<P align="left"><FONT size="2">The most recent debt service cover ratio and life-of-mine cover ratio agreed
with ABN Amro Ltd in terms of the agreement were 35.6:1 (2001: 45.0:1) and
42.8:1 (2001: 15.7:1) respectively.
</FONT>

<P align="center"><FONT size="2">F-12</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="center"><FONT size="2"><B>LIHIR GOLD LIMITED<BR>
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS</B></FONT>

<P align="left"><FONT size="2"><B>NOTE 6: OPERATING PROFIT / (LOSS)</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="95%">
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$'000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$'000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$'000</B></FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Operating profit / (loss)&nbsp;before taxation has been
determined after crediting / (charging):</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">SALES</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Gold sales at spot</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">183,207</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">174,719</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">168,595</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Realisation of hedging instruments</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">13,655</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">25,764</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">53,073</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Gold lease rate fees</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,339</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(185</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">229</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Fair value gains</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,227</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5,003</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Realisation of deferred hedging income</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">15,889</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">32,071</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">9,110</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Realisation of deferred hedging costs</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(4,128</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(4,217</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(4,424</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>213,189</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>233,155</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>226,583</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">REFINING, ROYALTY AND MANAGEMENT FEES</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Refining costs</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(556</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(604</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(540</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Royalties on sales</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(3,975</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(4,016</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(4,648</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Management fees</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(3,402</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(3,341</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(3,127</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(7,933</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(7,961</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(8,315</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">OTHER OPERATING COSTS</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Operating consumables</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(74,486</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(65,721</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(57,428</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Contracted services</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(36,012</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(28,682</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(35,819</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Staff costs</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(17,277</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(17,177</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(17,138</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Mining levy</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(5,625</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(7,580</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(5,499</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Insurance</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(4,210</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,379</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,784</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Air travel</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(3,004</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,173</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,150</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Operating lease rentals</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,254</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,035</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,294</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Consultants</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,009</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,524</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,073</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Donations and community assistance</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(197</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(417</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(364</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net foreign exchange gains and losses</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,537</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(6,444</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,239</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Provision for store stock obsolescence</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(692</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(987</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">104</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Provision for doubtful debts</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(306</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(215</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(631</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Costs deferred and transferred to inventories</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">19,556</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,080</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6,583</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Impairment (charge) / reversal: mine properties,
deferred mining costs</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">37,893</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(120,645</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Low grade stockpile impairment</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(4,392</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(5,841</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(7,965</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Contract mining cancellation fees</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(7,706</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Other costs</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(11,206</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(8,091</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(14,594</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(105,758</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(146,186</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(268,164</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">DEPRECIATION AND AMORTISATION</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Depreciation and amortisation of costs of mine properties</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(26,745</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(31,552</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(34,801</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Other</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(390</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(347</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(314</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(27,135</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(31,899</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(35,115</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>OPERATING COSTS</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(140,826</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(186,046</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(311,594</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">NET FINANCING COSTS</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Interest income</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,015</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,805</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,822</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Finance costs</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(3,705</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(6,164</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(17,166</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(2,690</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(4,359</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(14,344</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">F-13</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="center"><FONT size="2"><B>LIHIR GOLD LIMITED<BR>
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS</B></FONT>

<P align="left"><FONT size="2"><B>NOTE 7: CASH AND CASH EQUIVALENTS</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
    <TD width="69%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>

<TD nowrap align="center" colspan="3"><FONT size="1"><HR size="1" noshade></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><HR size="1" noshade></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><HR size="1" noshade></FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cash at bank and on hand</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">23,304</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">24,201</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">29,428</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Short term deposits with financial institutions</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">10,513</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">13,714</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">11,395</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>33,817</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>37,915</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>40,823</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Bank overdraft</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,297</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>32,520</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>37,915</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>40,823</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P align="left"><FONT size="2"><B>NOTE 8: NET CASHFLOW FROM OPERATING ACTIVITIES</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="95%">
<TR valign="bottom">
    <TD width="70%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Reconciliation of cash flow from operating activities to
operating profit/(loss) after tax</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Operating profit/(loss) after tax</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>53,247</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>59,176</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(99,355</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Depreciation and amortisation</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">27,135</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">31,899</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">35,115</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Revaluation of financial instruments</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,227</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(5,003</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Acquisition costs</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,814</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Asset impairment charge/(reversal): mine properties</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(36,960</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">116,359</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Asset impairment charge/(reversal): deferred mining costs</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(933</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,286</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Impairment of low grade stockpiles</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,392</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5,841</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">7,965</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Writedown of other assets</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">209</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Amortisation of deferred hedging income</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(15,889</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(32,071</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(9,110</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Amortisation of deferred hedging costs</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,128</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,217</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,424</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Provision for doubtful debts</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">306</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">215</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">652</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Profit/loss on disposal of assets</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(664</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">233</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">25</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Income tax expense/(benefit)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">16,426</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(16,426</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">(Increase)/decrease in debtors</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">8,590</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">14,848</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(17,818</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">(Increase)/decrease in inventories</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(18,520</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,856</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(16,622</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">(Increase)/decrease in deferred mining costs</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(3,670</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,846</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">10,499</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">(Decrease)/increase in creditors</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(12,230</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">8,480</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(699</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">De-recognition of creditors balances</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(6,692</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">(Decrease)/increase in rehabilitation provision</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">293</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">241</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">280</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">(Decrease)/increase in other operating assets and liabilities</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(607</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,887</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,104</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net cash flow from operating activities</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>22,817</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>62,081</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>39,128</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">F-14</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="center"><FONT size="2"><B>LIHIR GOLD LIMITED<BR>
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS</B></FONT>

<P align="left"><FONT size="2"><B>NOTE 9: INVENTORIES</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
    <TD width="55%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$'000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$'000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$'000</B></FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">CURRENT</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Stores</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">30,109</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">26,778</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">27,882</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Less: Provision for obsolescence</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,574</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,882</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(896</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>27,535</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>24,896</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>26,986</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Production work in progress</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,652</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,261</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,750</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Finished goods</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5,857</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,833</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">973</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Ore stockpiles</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">11,928</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,853</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">9,831</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>19,437</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>7,947</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>13,554</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total current inventories</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>46,972</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>32,843</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>40,540</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">NON-CURRENT</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Ore stockpiles</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">47,896</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">43,637</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">37,796</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Less: Impairment provision</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(47,896</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(43,637</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(37,796</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Ore stockpiles</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total inventories</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>46,972</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>32,843</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>40,540</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">Current stockpiled ore mainly relates to run-of-mine (ROM)&nbsp;stockpile and
crushed ore stocks ready for processing into finished goods within the next 12
months. These are valued at the lower of cost and net realisable value. Cost
includes mining costs, costs of conversion (crushing and conveying costs) and
an allocation of fixed and variable production overheads based on their
contained gold.
</FONT>

<P align="left"><FONT size="2">At 31 December 2002, non-current stockpiles were fully provided against, based
on their net realisable values.
</FONT>

<P align="left"><FONT size="2">The cost of finished goods inventory is stated at the lower of cost and net
realisable value.
</FONT>

<P align="center"><FONT size="2">F-15</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="center"><FONT size="2"><B>LIHIR GOLD LIMITED<BR>
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS</B></FONT>
<!-- link2 "NOTE 10: RECEIVABLES" -->
<DIV align="left"><A NAME="056"></A></DIV>

<P align="left"><FONT size="2"><B>NOTE 10: RECEIVABLES</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="61%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$'000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$'000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$'000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">CURRENT</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Trade receivables</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">8,649</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">VAT refunds receivable</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">12,496</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">16,826</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">

<TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Other
Debtors &#151; related parties</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,247</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">428</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">481</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Other amounts receivable from third parties:</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,752</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,244</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,041</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Less: Provision for doubtful debts</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,347</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,041</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(826</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>4,652</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>15,127</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>28,171</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">NON-CURRENT</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
<TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Other Debtors &#151; related parties</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,791</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,175</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,010</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Other amounts receivable</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>2,793</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>1,180</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>2,015</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Total amounts receivable</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>7,445</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>16,307</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>30,186</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2"><B>Leases accounted for as a lessor
(included in &#147;other debtors &#151; related parties&#148;).</B>
</FONT>

<P align="left"><FONT size="2">The Company leases earthmoving equipment to the Lakaka Group, a landowner company, under two separate arrangements whereby the
substantial risks and rewards of ownership are transferred to the other party. The term of the leases are 48&nbsp;months and 36&nbsp;months
respectively, with commencement dates of November 2000 and October 2002. The interest rate for both leases is 9% per annum. A
non-guaranteed residual amount of K100,000 is accounted for as a benefit to the Company under the terms of the earlier lease. No
unearned finance income or contingent rents have been recognised as income.
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
    <TD width="70%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$'000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$'000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$'000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Gross investments in finance leases</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Amounts receivable not later than one year</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,006</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">457</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">571</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Amounts receivable &#062; 1&nbsp;year and &#060; than 5&nbsp;years</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,138</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">647</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,379</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Amounts receivable later than five years</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>2,144</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>1,104</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>1,950</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Unearned finance income on finance leases</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(222</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(116</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(277</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net investment in finance leases</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>1,922</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>988</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>1,673</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Amounts receivable not later than one year</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">864</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">383</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">435</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Amounts receivable &#062; 1&nbsp;year and &#060; than 5&nbsp;years</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,058</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">605</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,238</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Amounts receivable later than five years</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>1,922</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>988</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>1,673</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">F-16</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="center"><FONT size="2"><B>LIHIR GOLD LIMITED<BR>
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS</B></FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Loan
(included in &#147;other debtors&nbsp;&#151;&nbsp;related parties&#148;)</B>
</FONT>

<P align="left"><FONT size="2">The Group has extended unsecured loans, repayable in monthly instalments, to landowner companies. The
initial loan to the Lakaka Group for PGK 2.5&nbsp;million, is repayable over a ten year term at an interest rate
of 10%. In 2002 the Group extended an unsecured loan to Kuridala Ltd of US$3.2&nbsp;million at an interest rate
of 8.77%, following the termination of a lease financing facility used to fund mining equipment owned by
Kuridala Ltd.
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
    <TD width="70%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Gross investments in loan
Amounts receivable not later than one year</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,600</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">104</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">130</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Amounts receivable &#062; 1&nbsp;year and &#060; than 5&nbsp;years</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,671</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">417</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">522</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Amounts receivable later than five years</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">268</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">409</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">648</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,539</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">930</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,300</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Unearned finance income on loan</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(423</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(316</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(482</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net investment in loan</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>3,116</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>614</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>818</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Amounts receivable not later than one year</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,383</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">45</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">46</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Amounts receivable &#062; 1&nbsp;year and &#060; than 5&nbsp;years</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,496</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">232</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">258</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Amounts receivable later than five years</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">237</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">337</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">514</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>3,116</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>614</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>818</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P align="left"><FONT size="2"><B>NOTE 11: DEFERRED MINING COSTS</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%">
<TR valign="bottom">
    <TD width="54%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>




<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">CURRENT</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Deferred mining costs</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,185</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,087</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">11,947</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Less: impairment provision</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(225</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,732</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>4,185</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>862</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>9,215</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">NON-CURRENT</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Deferred mining costs</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">17,720</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">17,994</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6,794</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Less: impairment provision</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,554</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,554</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>17,720</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>16,440</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>5,240</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total Deferred Mining Costs</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>21,905</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>17,302</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>14,455</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">The life of mine plan allows for a number of distinct phases, of which phases 1
to 3 have now been completed, with all previously deferred mining costs having
been fully expensed in the accounts as at the end of 2002.
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%">
<TR valign="bottom">
    <TD width="58%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Deferred Waste by Phase</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Phase 3:</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">862</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">9,215</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Phase 4:</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">20,354</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">16,440</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5,240</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Phase 5:</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,551</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>&#151;</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>&#151;</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total Deferred Mining Costs</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>21,905</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>17,302</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>14,455</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">Phase 4 is scheduled for completion by fourth quarter 2005, by which time
deferred mining costs for the phase will be fully expensed in the accounts.
Phase 5 is scheduled for completion in the third quarter of 2008.
</FONT>

<P align="center"><FONT size="2">F-17</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="center"><FONT size="2"><B>LIHIR GOLD LIMITED<BR>
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS</B></FONT>

<P align="left"><FONT size="2"><B>NOTE 12: MINE PROPERTIES</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="53%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$'000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$'000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$'000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">CAPITAL WORKS IN PROGRESS</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cost brought forward</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">21,436</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">9,274</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">14,483</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Acquisitions and disposals</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">25,981</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">36,898</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">53,499</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Transfers to mining properties</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(28,935</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(24,736</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(58,708</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Costs carried forward</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>18,482</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>21,436</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>9,274</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">MINE PROPERTIES</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Plant and equipment</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cost brought forward</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">536,744</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">515,883</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">458,165</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Transfers from capital works in progress</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">27,720</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">23,348</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">58,030</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Disposals</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(3,497</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,487</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(312</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cost carried forward</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>560,967</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>536,744</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>515,883</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Depreciation brought forward</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(288,892</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(267,644</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(179,077</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Charge for the year</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(20,152</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(23,155</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(24,218</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Impairment (charge) / reversal</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">24,157</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(64,494</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Transfer to other mining properties</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Disposals</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,618</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,907</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">145</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Depreciation carried forward</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(282,269</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(288,892</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(267,644</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net book value</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>278,698</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>247,852</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>248,239</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">F-18</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="center"><FONT size="2"><B>LIHIR GOLD LIMITED<BR>
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS</B></FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="53%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$'000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$'000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$'000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Land and Buildings</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cost brought forward</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">77,120</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">77,049</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">76,870</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Transfers from capital works in progress</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">819</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">71</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">179</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cost carried forward</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>77,939</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>77,120</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>77,049</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Depreciation brought forward</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(47,537</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(45,843</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(29,609</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Charge for the year</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,403</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,694</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,341</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Impairment reversal/(charge)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,753</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(13,893</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Depreciation carried forward</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(46,187</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(47,537</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(45,843</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net book value</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>31,752</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>29,583</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>31,206</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Deferred Expenditure</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cost brought forward</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">267,454</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">266,137</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">265,639</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Transfers from capital works in progress</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">396</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,317</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">498</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Transfer from other mining properties</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cost carried forward</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>267,850</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>267,454</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>266,137</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Depreciation brought forward</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(156,778</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(150,075</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(103,860</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Charge for the year</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(5,190</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(6,703</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(8,242</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Impairment reversal/(charge)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">10,050</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(37,972</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Transfers from other mining properties</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Depreciation carried forward</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(151,918</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(156,778</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(150,074</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net book value</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>115,932</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>110,676</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>116,063</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Sub-total</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cost brought forward</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">881,318</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">859,069</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">800,674</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Transfers from capital work in progress</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">28,935</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">24,736</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">58,707</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Disposals</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(3,497</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,487</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(312</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cost carried forward</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>906,756</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>881,318</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>859,069</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Depreciation brought forward</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(493,207</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(463,562</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(312,546</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Charge for the year</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(26,745</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(31,552</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(34,801</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Impairment reversal/(charge)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">36,960</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(116,359</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Disposals</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,618</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,907</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">145</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Depreciation carried forward</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(480,374</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(493,207</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(463,562</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net book value</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>426,382</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>388,111</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>395,508</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">F-19</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="center"><FONT size="2"><B>LIHIR GOLD LIMITED<BR>
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS</B></FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%">
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="50%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Rehabilitation</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cost brought forward</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">9,931</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">8,107</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6,896</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Additions and deductions</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,383</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,824</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,211</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cost carried forward</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>11,314</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>9,931</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>8,107</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Amortisation brought forward</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,650</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,303</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(989</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Charge for the year</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(390</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(347</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(314</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Amortisation carried forward</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(2,040</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(1,650</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(1,303</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net book value</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>9,274</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>8,281</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>6,804</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total mine properties</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>454,138</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>417,830</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>411,586</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P align="left"><FONT size="2"><B>NOTE 13: ACCOUNTS PAYABLE</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%">
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">CURRENT</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Trade creditors and accruals</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">14,204</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">15,334</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">14,915</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Mining levy payable</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">11,257</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">7,721</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Amounts payable to related parties</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">178</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">21</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,187</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>14,382</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>26,612</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>24,823</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P align="left"><FONT size="2"><B>NOTE 14: PROVISIONS</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%">
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="50%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">CURRENT</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Employee provisions</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,218</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,927</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,644</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Other</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">779</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>2,218</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>2,927</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>4,423</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">NON CURRENT</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Employee provisions</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">858</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">756</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">721</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Rehabilitation provision</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
<TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">- opening balance</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">11,533</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">9,466</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">7,975</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">- additional provision</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,383</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,801</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,211</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">- interest charge</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">293</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">266</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">280</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">- closing balance</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>13,209</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>11,533</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>9,466</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Other</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">426</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>14,067</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>12,289</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>10,613</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total provisions</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>16,285</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>15,216</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>15,036</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">F-20</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="center"><FONT size="2"><B>LIHIR GOLD LIMITED<BR>
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS</B></FONT>
<P align="left"><FONT size="2">Current employee provisions relate to the following short-term benefits which
are payable within 12&nbsp;months:
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Annual leave</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">800</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">686</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">678</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Sick leave</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">26</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">20</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Rio Superannuation</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,530</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Service bonus</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,392</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,220</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,436</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>2,218</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>2,927</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>3,644</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">The Rio Superannuation provision contributions are due and payable by the Group
to an independent multi employer superannuation fund. Due to the fund&#146;s
surplus position the Group enjoyed a &#147;contributions holiday&#148; through until
December 2002, with only employee contributions being remitted. Employer
contributions recommenced as of January 2003.
</FONT>

<P align="left"><FONT size="2">The service bonus is a scheme whereby employees contribute 10% of their gross
fortnight / monthly salary to the Group and are entitled to receive back their
contributions plus a further 10% from the Group, to be paid out in the current
period.
</FONT>

<P align="left"><FONT size="2">All non-current employee provisions relate to long-service leave entitlements
and are determined in accordance with the requirements for other long-term
employee benefits.
</FONT>

<P align="left"><FONT size="2"><B>NOTE 15: INCOME TAX</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="95%">
<TR valign="bottom">
    <TD width="67%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="left"></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="left"><FONT size="1"><B>Income tax expense for the year has been calculated as follows:</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD align="left"><FONT size="1"><HR size="1" noshade></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Profit/(Loss) for the year</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>69,673</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>42,750</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(99,355</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Prima facie income tax expense / (benefit)&nbsp;on operating profit
/ (loss)&nbsp;at 30%</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">20,902</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">12,825</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(34,774</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Tax effect of exempt and non-deductible items</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">- Non-deductible entertainment</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">- Non-deductible superannuation</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(459</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">22</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">- Non deductible rehabilitation</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">184</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">121</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">- Exempt interest income</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">- Tax loss / provision against subsidiary not recognised</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">213</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">134</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">228</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">- Foreign exchange (gains) / losses</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">761</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">- Adjustment to tax bases</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(10,749</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">- Deferred tax assets unrecognised / (recognised)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5,298</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(29,111</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">10,020</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">- Income tax rate change (35% to 30%)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">24,380</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Income tax expense / (benefit)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">16,426</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(16,426</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Deferred tax position
</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Depreciation and impairment differences</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">98,458</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">105,160</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">129,057</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Tax loss</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">33,404</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">26,817</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Derivative financial instruments</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,169</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Fair value reserve</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">16,097</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(16,426</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Provisions</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,280</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,982</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,517</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Deferred hedging income</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">15,446</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Prepayments</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(86</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(87</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(84</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Other</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(10,651</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(510</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">112</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Less deferred tax assets not recognised</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(138,333</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(116,936</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(146,048</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net deferred tax</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>


<P align="center"><FONT size="2">F-21</FONT>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>


<P align="center"><FONT size="2"><B>LIHIR GOLD LIMITED<BR>
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS</B>
</FONT>

<P align="left"><FONT size="2">At 31 December 2002 the group had a net deferred tax position of US$ nil (2001:
US$ nil, 2000: US$ nil), a current period tax expense of US$16.4&nbsp;million (2001:
US$16.4&nbsp;million tax benefit, 2000: US$ nil) included in the income statement
and a tax benefit of US$16.4&nbsp;million (2001: US$16.4&nbsp;million tax charge, 2000:
US$ nil) included in equity. At that date the group also had unrecognised tax
losses of US$111.3&nbsp;million (2001: US$89.4&nbsp;million, 2000: US$ nil) and net
deductible temporary differences of US$349.8&nbsp;million (2001: US$300.4&nbsp;million,
2000: US$486.0&nbsp;million). The tax losses can be carried forward for a period
not exceeding 20&nbsp;years.
</FONT>

<P align="left"><FONT size="2">Deferred tax assets have not been recognised beyond deferred tax liabilities
because the group does not consider that the realisation of the tax benefits
through future taxable profits as probable, which implies a high level of
likelihood. The recognition of deferred tax assets to the extent of deferred
tax liabilities is required under IAS 12, as they relate to income taxes levied
by the same taxation authority and the taxable temporary differences are
expected to reverse in the same period as the deductible temporary differences.
</FONT>

<P align="left"><FONT size="2">In accordance with IAS 12 a Deferred
Tax Asset of US$16.4&nbsp;million was
recognised, being to the extent of the Deferred Tax Liability, on the 31
December 2001. This arose as a consequence of the valuation of the effective
portion of the hedgebook being US$54.8&nbsp;million in-the-money. With the
effective portion of the hedgebook valuation being US$73.0&nbsp;million
out-of-the-money at 31 December 2002, the Deferred Tax Liability was
effectively eliminated.
</FONT>

<P align="left"><FONT size="2">As Lihir does not consider the realisation of its tax benefits as probable, no
Deferred Tax Asset has been recognised. On the same basis, the Deferred Tax
Asset previously raised on the 31 December 2001 was removed from the Balance
Sheet, giving rise to a tax charge of US$16.4&nbsp;million. This tax charge is
non-cash and offsets the non-cash tax benefit of US$16.4&nbsp;million recognised in
the prior year.
</FONT>


<P align="left"><FONT size="2"><B>NOTE 16: REMUNERATION AND RETIREMENT BENEFITS</B>
</FONT>

<P align="left"><FONT size="2"><B>(a)&nbsp; Directors&#146; remuneration, including the value of benefits received during the year:</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%">
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$'000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$'000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$'000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Baker, Phillips (resigned 23 January, 2002)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Baylis, Joseph</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Eppler, Randy (resigned 19 April, 2002)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Garnaut, Ross</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">83</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">66</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">72</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Leslie, Jonathan</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Loudon, Geoff</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">19</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">23</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">28</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Merton, Michael (resigned 15 May, 2000)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">162</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">O&#146;Reilly, John (resigned 1 November, 2002)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Roberts, Alan</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">330</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">300</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">303</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Siaguru, Anthony</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">20</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Soipang, Mark</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Swan, Neil</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">298</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">In addition, during the year the Company paid a premium of US$55,000 (2001: US$46,000, 2000: US$34,125) for directors and
officers liability insurance.
</FONT>

<P align="center"><FONT size="2">F-22</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>


<P align="center"><Font size="2"><B>LIHIR GOLD LIMITED<BR>
             NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS</B></FONT>
<P align="left"><FONT size="2"><B>( b) The number of employees, not including directors, whose remuneration and benefits
exceeded K100,000 fall into the following bands:</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
    <TD width="33%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="18%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="19%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Remuneration and benefit band</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="11"><FONT size="1"><B>Number of Employees</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="11"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>US$</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>PGK</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">$24,000 - $26,400</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K100,000 - K110,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">$26,401 - $28,800</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K110,001 - K120,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">12</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">$28,800 - $31,200</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K120,001 - K130,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">$31,201 - $33,600</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K130,001 - K140,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">$33,601 - $36,000</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K140,001 - K150,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">$36,001 - $38,400</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K150,001 - K160,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">$38,401 - $40,800</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K160,001 - K170,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">$40,801 - $43,200</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K170,001 - K180,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">$43,201 - $45,600</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K180,001 - K190,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">$45,601 - $48,000</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">K190,001 - K200,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">$48,001 - $50,400</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K200,001 - K210,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">$50,401 - $52,800</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K210,001 - K220,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">$52,801 - $55,200</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K220,001 - K230,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">$55,201 - $57,600</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K230,001 - K240,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">$57,601 - $60,000</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K240,001 - K250,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">$60,001 - $62,400</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K250,001 - K260,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">$62,401 - $64,800</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K260,001 - K270,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">$64,801 - $67,200</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K270,001 - K280,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">$67,201 - $69,600</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K280,001 - K290,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">$69,601 - $72,000</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K290,001 - K300,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">$72,001 - $74,400</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K300,001 - K310,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">$74,401 - $76,800</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K310,001 - K320,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">$76,801 - $79,200</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K320,001 - K330,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">$79,201 - $81,600</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K330,001 - K340,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">$81,601 - $84,000</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K340,001 - K350,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">$84,001 - $86,400</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K350,001 - K360,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">$86,401 - $88,800</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K360,001 - K370,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">$88,801 - $91,200</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K370,001 - K380,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">$91,201 - $93,600</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K380,001 - K390,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">$93,601 - $96,000</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">K390,001 - K400,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">$96,001 - $98,400</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">K400,001 - K410,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">$98,401 - $100,800</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">K410,001 - K420,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">$100,801 - $103,200</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">K420,001 - K430,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">$103,201 - $105,600</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">K430,001 - K440,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">$105,601 - $108,000</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">K440,001 - K450,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">$108,001 - $110,400</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">K450,001 - K460,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">$112,801 - $115,200</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">K470,001 - K480,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">$115,201 - $117,600</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">K480,001 - K490,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">$117,601 - $120,000</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">K490,001 - K500,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">$124,801 - $127,200</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">K520,001 - K530,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">$127,201 - $129,600</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">K530,001 - K540,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">$136,801 - $139,200</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">K570,001 - K580,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">$145,001 - $147,400</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">K610,001 - K620,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">$168,000 - $170,400</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">K700,001 - K710,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">Note: US$ bands are based on 2002 PGK exchange rates and therefore differ from
those reported in prior years.
</FONT>

<P align="center"><FONT size="2">F-23</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>


<P align="center"><Font size="2"><B>LIHIR GOLD LIMITED<BR>
             NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS</B></FONT>

<P align="left"><FONT size="2"><B>NOTE 17: RETIREMENT BENEFITS</B>
</FONT>

<P align="left"><FONT size="2">Senior employees of the Group participate in a retirement benefit plan, and
contributions are made by the Group to the plan based on 15% of the employee&#146;s
base salary. Due to the Fund&#146;s surplus position the Group enjoyed a
&#147;contributions holiday&#148; through until December 2002, with only employee
contributions being remitted. Employer contributions recommenced as of January
2003. The plan is a multi-employer plan, and employee benefits may be either
defined contribution or defined benefit, depending on elections made at time of
entry.
</FONT>

<P align="left"><FONT size="2">The Group also participates in the National Superannuation Fund of Papua New
Guinea in respect of its Papua New Guinean employees. The Company contributes
to this fund at the statutory rate of 9% (2001: 9%, 2000: 7%) of salary, and
contributions made during the year amounted to US$512,359 (2001: US$535,369,
2000: US$367,000). This is a multi-employer plan, and members&#146; benefits are
defined contribution.
</FONT>


<P align="left"><FONT size="2"><B>NOTE 18: AUDITORS&#146; REMUNERATION</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%">
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="71%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap colspan="2"><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2" align="left">&nbsp;</TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Fees paid/payable to the
Group&#146;s auditors for:</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Auditing the Financial Statements</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">PricewaterhouseCoopers, PNG Firm</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">127</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">167</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">89</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">PricewaterhouseCoopers, Overseas Firms</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">25</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">439</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Other services (Tax)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">73</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">48</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">54</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>225</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>654</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>143</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P align="left"><FONT size="2"><B>NOTE 19: PAID UP CAPITAL</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%">
<TR valign="bottom">
    <TD width="66%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="11"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="11"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="left"><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="left">&nbsp;</TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
<TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>(a) Issued and paid up capital</B>
</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
<TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Ordinary
shares</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Opening balance</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">873,822</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">873,822</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">819,225</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>


<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Shares issued</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">145,157</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Shares reclassified as &#147;B&#148; shares: Treasury shares</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(90,560</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Closing balance</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>873,822</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>873,822</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>873,822</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
    <TD width="58%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="11"><FONT size="1"><B>Number of shares</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="11"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>(b)&nbsp;Issued and paid up capital</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Opening balance</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,142,334</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,142,334</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,083,206</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Shares issued</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">220,655</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Treasury shares: reclassified as &#147;B&#148;shares</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(161,527</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Closing balance</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>1,142,334</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>1,142,334</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>1,142,334</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Consisting of:</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total shares</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,303,861</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,303,861</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,303,861</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Treasury shares</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(161,527</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(161,527</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(161,527</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Closing balance</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>1,142,334</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>1,142,334</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>1,142,334</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">All shares in the Company and the Group are ordinary shares, all being of the same class, (other than
Treasury shares), having equal participation and voting rights. The Treasury shares are classified as &#147;B&#148;
shares and arise from the merger with Niugini Mining Limited. These shares confer no voting rights, no
rights to participation in dividends, are not transferable and are redeemable at the option of Lihir Gold
Limited.
</FONT>

<P align="left"><FONT size="2">In accordance with the Papua New Guinea Companies Act, par values are not attributable to shares and there
is no requirement for disclosure of authorised capital.
</FONT>

<P align="center"><FONT size="2">F-24</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>


<P align="center"><Font size="2"><B>LIHIR GOLD LIMITED<BR>
             NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS</B></FONT>

<P align="left"><FONT size="2"><B>NOTE 20: CAPITAL AND LEASING COMMITMENTS</B>
</FONT>

<P align="left"><FONT size="2"><B>(a)&nbsp; Operating Lease Commitments</B>
</FONT>

<P align="left"><FONT size="2">Non-cancellable operating leases contracted for but
not capitalised in the accounts
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="67%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$'000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$'000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$'000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Payable</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">- not later than one year</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">324</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,322</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,806</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">- later than one year but not later than 2&nbsp;years</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">280</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">706</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">- later than two years but not later than 5&nbsp;years</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>324</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>1,602</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>2,512</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2"><B>(b)&nbsp; Capital Expenditure Commitments</B>
</FONT>

<P align="left"><FONT size="2">Capital expenditure commitments contracted for:
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$'000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$'000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$'000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Payable</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">- not later than one year</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">10,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6,930</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">13,516</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">- later than one year but not later than 2&nbsp;years</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>10,500</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>6,930</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>13,516</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P align="left"><FONT size="2"><B>NOTE 21: CONTINGENT LIABILITIES</B>
</FONT>


<P align="left"><FONT size="2"><I>Environmental</I>
</FONT>

<P align="left"><FONT size="2">The Company&#146;s mining and exploration activities are subject to various laws and
regulations governing the protection of the environment, including the
Environmental Plan agreed with the Government of Papua New Guinea. These laws
and regulations are continually changing and are generally becoming more
restrictive. The Company conducts its operations so as to protect public health
and the environment and believes its operations are in compliance with all
applicable laws and regulations. The Company&#146;s environmental and management
program addresses continual monitoring of any effects on the environment,
together with assessments of the work necessary to rehabilitate areas affected
by mining operations after the eventual closure of operations. The Company has
made, and expects to make in the future, expenditures to comply with such laws
and regulations, but cannot predict the amount of such future expenditures.
Estimated future rehabilitation costs are based principally on the Company&#146;s
estimates of rehabilitation and restoration activities and costs pursuant to
the Environmental Plan. At December&nbsp;31, 2002, 2001 and 2000 $13.2&nbsp;million,
$11.5&nbsp;million and $9.4&nbsp;million, respectively, were accrued for rehabilitation
costs for areas disturbed to date. In addition, the Company has been involved
in several matters concerning environmental obligations associated with former
mining activities. Generally, these matters concerned developing and
implementing remediation plans at the Red Dome mine site in Queensland,
Australia, which was formerly operated by Niugini Mining (Australia) Pty
Limited, a fully owned subsidiary of the Company. This site has subsequently
been sold in 2003, and the purchaser has assumed full responsibility for
environmental remediation.
</FONT>

<P align="left"><FONT size="2">Depending upon the ultimate scope and cost of work undertaken during final
rehabilitation, the Company believes that it is reasonably possible that the
liability for these matters could be as much as 50% greater or 25% lower than
the amount accrued at December&nbsp;31, 2002. The amounts accrued for these matters
are reviewed periodically based upon facts and circumstances available at the
time. Changes in estimates are charged to <I>Costs and expenses, Other </I>in the
period estimates are revised.
</FONT>


<P align="left"><FONT size="2"><I>Guarantees</I>
</FONT>

<P align="left"><FONT size="2">As part of the Group&#146;s support of Lihirian owned businesses, the Group has
provided a number of guarantees to various financiers in favour of Lihirian
companies. These guarantees total approximately US$0.3&nbsp;million (2001: US$0.7
million, 2000: US$1.5&nbsp;million).
</FONT>

<P align="center"><FONT size="2">F-25</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>


<P align="center"><Font size="2"><B>LIHIR GOLD LIMITED<BR>
             NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS</B></FONT>

<P align="left"><FONT size="2"><I>Claims</I>
</FONT>

<P align="left"><FONT size="2">In December 2000 the Company&#146;s wholly owned subsidiary &#151; Niugini Mining
(Australia) Pty Limited &#151; terminated a sales agreement for seven mining leases
located in North Queensland. The purchaser commenced an action against Niugini
Mining (Australia) Pty Limited in the Supreme Court of Queensland, seeking to
have the termination revoked and unspecified damages.
</FONT>

<P align="left"><FONT size="2">The action was struck out by the court in October 2001 because of the
purchaser&#146;s failure to prosecute its action against Niugini Mining (Australia)
Pty Limited. The purchaser is free to lodge a new action and threatened to do
so in mid-2002, however, at the time of publication, has not done so. Niugini
Mining (Australia) Pty Ltd has entered into a sale agreement to sell of its
North Queensland assets, including the seven mining leases to Kagara Zinc
Limited, which is aware of the previous litigation. Completion of the sale of
these mining leases is due in March 2003.
</FONT>

<P align="left"><FONT size="2">In June 2001 Niugini Mining (Australia) Pty Limited became a party to a native
title claim over some of its mining tenements in North Queensland. Even if
this claim is successful it should not impact on the mining tenements held by
Niugini Mining (Australia) Pty Limited, since the <I>Native Title Act </I>1993 (Cth)
has confirmed that rights conferred by valid tenements prevail over any native
title rights which may exist. Niugini Mining (Australia) Pty Limited&#146;s mining
tenements that are covered by this native title claim are being sold to Kagara
Zinc Limited (as discussed above), which is aware of the claim.
</FONT>

<P align="left"><FONT size="2">Niugini Mining Limited received claims for unspecified damages relating to the
decommissioned Mt Victor mine in Papua New Guinea. These claims date back
several years and the Company is seeking to have them removed from the court
list, as they have not been pursued. The Company believes from legal advice
obtained that neither of these claims has substance and, if required, intends
to defend both vigorously.
</FONT>

<P align="center"><FONT size="2">F-26</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>


<P align="center"><Font size="2"><B>LIHIR GOLD LIMITED<BR>
             NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS</B></FONT>

<P align="left"><FONT size="2"><B>NOTE 22: FINANCE FACILITIES</B>
</FONT>

<P align="left"><FONT size="2">The major facilities are summarised as follows:
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(a)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>Project Financing Facility</B></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">The Syndicated Finance Facility, signed on 22 November 2000, is a US$50
million revolving credit facility arranged and underwritten by ABN &#150;AMRO
Australia Limited. Commonwealth Bank of Australia, Deutsche Bank AG,
Macquarie Bank Limited and SG Australia Limited are participating with ABN
AMRO Australia Limited as financiers of the structure. The interest
applicable to the facility, inclusive of political risk insurance, is
2.9% over LIBOR. The facility limit reduces as follows:</FONT></TD>
</TR>
</TABLE>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
    <TD width="45%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="50%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">30 June 2003</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
US$10&nbsp;million</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">30 June 2004</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
US$10&nbsp;million</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">30 June 2005</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
US$30&nbsp;million</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Mandatory prepayments are required under the Finance Facility under
certain conditions. The Company has pledged its assets as collateral and
has provided a range of covenants and warranties in relation to the
facility (Refer to Note 5).</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Events of Default: In addition to the normal default provisions relating
to non payment, financial distress, misrepresentation, cross default and
breach of undertakings, the agreement includes default provisions covering
material adverse change, expropriation, war and political violence and
exchange control.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">The US$50&nbsp;million facility agreement also includes financial covenants
that would trigger default if at December&nbsp;31 and June&nbsp;30 of each year the
debt service cover ratio for the next twelve months is less than 1.0 or
the life of mine debt cover ratio is less than 1.5.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">If an event of default is continuing the lenders, acting on majority
consent, may cancel the revolving credit commitment and accelerate
repayment of the loan.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Review Events: If, without consent of the agent (acting on the
instructions of all the lenders), Rio Tinto sells in whole or in part its
current shareholding in Lihir or the manager of the project ceases to be a
wholly owned subsidiary of Rio Tinto, the Agent may give notice to Lihir,
within 21&nbsp;days of becoming aware or being notified of such an event:</FONT></TD>
</TR>
</TABLE>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">requiring the US$50&nbsp;million revolving credit be immediately
restructured in a manner acceptable to the Agent; or</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">requiring the US$50&nbsp;million revolving credit be repaid and
cancelled within 180&nbsp;days from such notification.</FONT></TD>
</TR>
</TABLE>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(b)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2"><B>Loan Facility European Investment Bank (&#147;EIB&#148;)/ Mineral Resources
Development Company Ltd (&#147;MRDC&#148;)</B></FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">The Company entered into an Agreement with EIB and MRDC whereby the
European Investment Bank has loaned funds to MRDC who then on lent those
funds to the Company. The amount of the loan was US$26.5&nbsp;million when
drawn down. The funds are provided to MRDC at a concessionary rate of
interest. The interest rate payable by the Company is 8.42%. The Loan
Principal is repayable in 16 semi-annual instalments commencing four years
after loan signature. The Loan is unsecured. The balance on Lihir&#146;s
subordinated debt was reduced from US$34&nbsp;million to US$25&nbsp;million as part
of loan restructuring in 2000.</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">F-27</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="center"><Font size="2"><B>LIHIR GOLD LIMITED<BR>
             NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS</B></FONT>




<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">The loan contains Event of Default provisions that, if satisfied, give
EIB/MRDC the right to demand immediate repayment of the loan. These
provisions concern events such as material misrepresentation of fact,
failure to pay obligations under the loan when due, insolvency or
liquidation of the Company, abandonment of a substantial part of the
Company&#146;s business, substantial reduction in the net worth of the Company,
default on other major loan agreements, and any material adverse effect on
the Company&#146;s ability to service the loan.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">The following table details the profile of debt repayments (based on the
outstanding balance of the Syndicated Finance Facility at 31 December 2002 of
US$23.009&nbsp;million):
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%">
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Syndicated</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Syndicated</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center">&nbsp;</TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Finance</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Finance</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>EIB</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>EIB</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>&nbsp;</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Facility</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Facility</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Facility</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Facility</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Total</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Total</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>&nbsp;</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$ 000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$ 000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$ 000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$ 000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$ 000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$ 000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="left"><FONT size="1"><B>Repayment Maturity</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Current</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Less than one Year</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>&#151;</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>&#151;</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>3,510</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>3,775</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>3,510</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>3,775</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Non-current</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Between one and two years</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,510</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,510</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,510</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,510</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Between two and three years</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">23,009</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">10,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,510</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,510</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">26,519</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">13,510</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">In excess of three years</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">13,009</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">7,019</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">10,529</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">7,019</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">23,538</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>23,009</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>23,009</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>14,039</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>17,549</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>37,048</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>40,558</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Total</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>23,009</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>23,009</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>17,549</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>21,324</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>40,558</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>44,333</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">In the current low interest rate environment the fair value of the EIB
facility is US$21.8&nbsp;million.
</FONT>


<P align="left"><FONT size="2"><B>NOTE 23: FINANCIAL RISK MANAGEMENT</B>
</FONT>

<P align="left"><FONT size="2">The group is exposed to a variety of financial risks, including the effects of
changes in debt and equity market prices, foreign exchange and interest rates.
The Groups&#146; overall risk management programme focuses on the unpredictability
of the gold price, seeking to protect the level of income in future years. The
Group uses derivative financial instruments including forward gold sale
agreements and put options to hedge this exposure. It is not Group policy to
engage in speculative transactions.
</FONT>

<P align="left"><FONT size="2">Risk management is carried out under policies approved by the Board of
Directors. The board provides direction with regards to overall risk
management and has endorsed a written policy covering specific areas including
foreign exchange risk, interest rate risk, credit risk, liquidity risk and the
use of financial instruments.
</FONT>

<P align="left"><FONT size="2">(1)&nbsp; Foreign Exchange Risk
</FONT>

<P align="left"><FONT size="2">The Group is exposed to foreign exchange risk arising from various currency
exposures primarily with respect to the Papua New Guinea Kina and Australian
Dollar. As revenue and a large proportion of expenditure is denominated in
US4, the foreign exchange exposure is deemed a residual risk and the Group
therefore does not hedge its foreign exchange exposure.
</FONT>

<P align="left"><FONT size="2">(2)&nbsp; Interest rate risk
</FONT>

<P align="left"><FONT size="2">The Group&#146;s income and operating cashflow are substantially independent to
changes in market interest rates. The Group has no significant interest
income. Of interest bearing liabilities the fixed / floating split is 43%
(2001: 48%, 2000: 23%) and 57% (2001: 52%, 2000: 67%) respectively. A change
in interest rates of 1% will have an approximate income impact of US$0.2
million per annum.
</FONT>

<P align="center"><FONT size="2">F-28</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>


<P align="center"><Font size="2"><B>LIHIR GOLD LIMITED<BR>
             NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS</B></FONT>
<P align="left"><FONT size="2">(3)&nbsp; Credit risk
</FONT>

<P align="left"><FONT size="2">For hedging transactions the maximum credit risk at any point in time will be
the difference between the agreed strike price in the contract, and the
prevailing spot price. At the prevailing spot price on the 31 December 2002 of
US$342.75 / oz (2001: US$276.50, 2000: US$272.25) this would have amounted to
US$4&nbsp;million (2001: US$105.6&nbsp;million, 2000: US$108.4&nbsp;million) on an
undiscounted basis, based on the assumption that all counter-parties failed to
meet their obligations. The transactions are spread between six major bullion
banks, and there is no significant concentration of risks amongst those
parties.
</FONT>

<P align="left"><FONT size="2">All counterparties to these transactions are recognised financial institutions
with a minimum credit rating of Aa3. The Group&#146;s risk in the event of any of
the counterparties defaulting on their contractual obligations is limited to
any revenue that may be foregone in the case where the defaulted contract&#146;s
strike price exceeds the prevailing spot price at the value date. The company
does not expect any counterparty to fail to meet its obligations.
</FONT>

<P align="left"><FONT size="2">(4)&nbsp; Liquidity Risk
</FONT>

<P align="left"><FONT size="2">The Group engages in prudent liquidity risk management by maintaining
sufficient cash and cash equivalents and ensuring the availability of adequate
committed credit facilities.
</FONT>


<P align="left"><FONT size="2"><B>NOTE 24: DERIVATIVE FINANCIAL INSTRUMENTS</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%">
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="64%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$'000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$'000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$'000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Derivative Financial Instruments</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Current Assets</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">- Forward contracts</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,948</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">30,619</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">- Call options bought</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">14</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">- Deferred hedging costs</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,230</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>1,948</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>30,633</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>4,230</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Non-Current Assets</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">- Spot deferred contracts</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">150</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">- Forward contracts</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5,455</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">25,516</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">- Put options bought</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,582</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6,303</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">- Deferred hedging costs</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,115</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>10,037</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>31,969</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>4,115</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Current Liabilities</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">- Deferred hedging income</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6,133</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">32,071</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>&#151;</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>&#151;</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>32,071</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Non-Current Liabilities</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">- Forward contracts</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">59,704</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">- Call options sold</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">11,915</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,846</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">- Deferred hedging income</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>71,619</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>2,846</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>19,417</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Shareholders&#146; Equity &#151; Fair value revaluation reserve</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">- Spot deferred contracts</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">150</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">- Forward contracts</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(46,494</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">51,469</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">- Put options bought</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(578</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,133</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">- Call options sold</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(6,583</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">- Deferred hedging income</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(15,814</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">19,417</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">- Deferred hedging costs</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(4,127</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">- Deferred tax liability</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(16,426</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(69,469</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>53,616</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>&#151;</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>


<P align="center"><FONT size="2">F-29</FONT>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>


<P align="center"><FONT size="2"><B>LIHIR GOLD LIMITED<BR>
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS</B>
</FONT>

<P align="left"><FONT size="2">The estimated net amount of gains contained in the fair value revaluation
reserve which are expected to be reclassified into earnings within the next 12
months is as follows:
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
    <TD width="54%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002<Br>US$'000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001<Br>US$'000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000<br>US$'000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Forward contracts</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(7,849</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">30,619</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Deferred hedging income</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(191</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">15,889</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Deferred hedging costs</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(4,127</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Deferred tax liability</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(9,186</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(8,040</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>33,195</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">The Group has entered into a series of agreements with financial institutions
in relation to future sales of gold. The purpose of these transactions is to
protect the level of income in future years. It is not Group policy to engage
in speculative hedging activities.
</FONT>

<P align="left"><FONT size="2">As at 31 December 2002 Lihir&#146;s hedge book amounted to 2,180,101 ounces as shown
in the following summary:
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%">
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>Forward Sales</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>Put Options Bought</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="7"><FONT size="1"><B>Call Options Sold</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="7"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Committed</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Minimum</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Minimum</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Ounces</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Price</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Ounces</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Price</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Ounces</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Price</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">0-3&nbsp;months</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">75,994</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">329.47</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">3-6&nbsp;months</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">79,494</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">328.05</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">6-9&nbsp;months</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">79,494</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">329.88</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">9-12&nbsp;months</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">76,994</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">331.05</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2004</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">217,977</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">325.38</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">20,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">335.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">20,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">365.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2005</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">178,988</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">335.27</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">95,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">320.39</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">95,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">326.71</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2006</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">222,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">321.90</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">39,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">325.26</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">39,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">336.74</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2007</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">330,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">323.76</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">96,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">319.17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">96,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">319.08</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2008</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">375,475</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">331.96</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">40,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">335.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">20,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">365.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2009</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">243,185</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">350.76</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">2010</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">10,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">327.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>1,890,101</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>330.90</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>290,000</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>323.66</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>270,000</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>$</B></FONT></TD>
    <TD align="right"><FONT size="2"><B>331.12</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">Forward sales are transactions against which the Group will be obliged to
deliver when they fall due. The price therefore represents a fixed and
guaranteed amount of revenue.
</FONT>

<P align="left"><FONT size="2">Bought put options are transactions that will occur at the discretion of the
Group. Should the spot price exceed the strike price of the option at the date
on which the option expires, the Group will allow the option to expire and will
sell the equivalent amount of gold in the spot market. Conversely, if the
strike price is higher than the spot price on that date, the option will be
exercised.
</FONT>

<P align="left"><FONT size="2">Sold call options are transactions that will occur at the discretion of the
purchaser. Should the spot price exceed the strike price of the option at the
date on which the option expires, a rational purchaser would exercise the
option obliging the Group to deliver gold into the contract at the contracted
strike price.
</FONT>

<P align="center"><FONT size="2">F-30</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="center"><FONT size="2"><B>LIHIR GOLD LIMITED<BR>
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS</B></FONT>


<P align="left"><FONT size="2">Spot deferred sales are short term transactions into which the Group has
entered and, while designated against specific future production, do not have a
fixed contracted delivery date, but are rolled forward until the date the sale
occurs. The strike price eventually received will depend on the contango
applied during the intervening period.
</FONT>

<P align="left"><FONT size="2">Gold lease rate swaps entitle the Group to receive a fixed rate allowance, used
in the determination of the forward contract price, in exchange for an
obligation to pay a floating rate, where settlement occurs on a periodic basis.
</FONT>

<P align="left"><FONT size="2">The Group does not enter into hedging transactions that have provisions for
margin calls.
</FONT>

<P align="left"><FONT size="2">The minimum total revenue generated from these programs will be US$719&nbsp;million
(2001: US$737&nbsp;million, 2000: US$640&nbsp;million). Revenue generated from the same
number of ounces at the prevailing spot price at 31 December 2002 of US$342.75
(2001: US$276.50, 2000: US$272.25) per ounce would be US$747&nbsp;million (2001
US$634&nbsp;million, 2000: US$532&nbsp;million).
</FONT>

<P align="left"><FONT size="2">On 31 December 2002, the estimated fair value of the total hedge program as
determined by an independent party, based on the ruling spot price of US$342.75
(2001: US$276.50, 2000: US$272.25), was US$65.8&nbsp;million out-of-the-money (2001:
US$59.8&nbsp;million in-the-money, 2000: US$54.4&nbsp;million in-the-money). At the
spot price plus 10% (US$377.00) the estimated fair value would be approximately
US$150&nbsp;million out of the money. Conversely at the spot price less 10%
(US$308.5) the estimated fair value would be US$ nil. The fair value of
commodity contracts is estimated based on quotes from the market makers of
these instruments and represents the estimated amounts that the Company would
expect to receive or pay to terminate the agreements at the reporting date.
Fair value of options is an estimate based on relevant market information such
as: volatility of similar options, futures prices and the contracted strike
price.
</FONT>

<P align="left"><FONT size="2">Net profit for 2002 included revaluation revenue relating to ineffective hedges
of US$2.3&nbsp;million (2001: US$5.0&nbsp;million, 2000: US$ nil). The hedge
effectiveness provisions of IAS 39 require that the ineffective portion of the
hedge be passed through the income statement. During the latter part of 2000
and early 2001, gold lease rates were historically high. In locking in the
gold price for future production, Lihir elected to retain a floating rate
exposure to lease rates by way of gold lease rate swaps. The US$2.3&nbsp;million
(2001: US$5.0&nbsp;million, 2000: US$ nil) revenue has primarily arisen due to lease
rates falling to historical levels, across the curve.
</FONT>

<P align="left"><FONT size="2">The effective portion of the hedge is retained in equity, to be recycled to
earnings on delivery of designated production. At 31 December 2002,
shareholders equity included a hedging fair value reserve of negative US$69.5
million (2001: positive US$53.6&nbsp;million, 2000: US$ nil).
</FONT>

<P align="left"><FONT size="2">During the latter half of 2002, following an increase in the gold price to over
US$300 / ounce, approval was sought and obtained from the syndicate lenders to
vary the minimum hedge requirements under the syndicated loan facility,
enabling the hedgebook to be restructured to provide shareholders with
additional exposure to the spot price. This was achieved through the rollout
and re-designation of existing hedge positions against longer dated production.
Any gain or loss recognised on the effective portion of the hedge at the time
of rollout was crystallised in equity to be recycled to earnings on the
delivery of the originally designated production. Subsequent movements in
market value of the effective portion of the re-designated hedge are to be
recycled to earnings on maturity.
</FONT>

<P align="left"><FONT size="2">The net amount of gains losses, arising from early closure and redesignation of
hedge structures, retained in equity at 31 December 2002 was a loss of US$11.4
million.
</FONT>

<P align="left"><FONT size="2">The Company does not use financial instruments to hedge future interest rates
or foreign exchange transactions.
</FONT>

<P align="left"><FONT size="2"><B>NOTE 25: SEGMENT REPORTING</B>
</FONT>

<P align="left"><FONT size="2">The Group produces gold in Papua New Guinea.
</FONT>


<P align="center"><FONT size="2">F-31</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="center"><FONT size="2"><B>LIHIR GOLD LIMITED<BR>
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS</B></FONT>




<P align="left"><FONT size="2"><B>NOTE 26: RELATED PARTY TRANSACTIONS</B>
</FONT>

<P align="left"><FONT size="2">Transactions between related parties are on normal commercial terms and
conditions that are no more favourable than those available to other parties.
</FONT>

<P align="left"><FONT size="2">Lihir Management Company Limited (LMC)&nbsp;manages the Company pursuant to a
Management Agreement dated 17 March 1995. LMC is a wholly owned subsidiary of
Rio Tinto plc, which is a significant beneficial owner of equity in the
Company. LMC receives a management fee according to the terms of this
agreement, which is calculated as the greater of:
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">US$250,000 per month set in 1995, and increased annually thereafter
according to application of the Implicit Price Deflator for the US Gross
National Product, and</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">1.5% of the average operating costs (excluding the management fee)
for the preceding 3&nbsp;months.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">There are three directors who are on the Board of the Company and LMC.
</FONT>

<P align="left"><FONT size="2">There is one director who is on the Board of the Company and Lakaka Limited.
</FONT>

<P align="left"><FONT size="2">There is one director who is a consultant to Blake Dawson Waldron, who provide
general legal advice to the Company.
</FONT>

<P align="left"><FONT size="2">Lihir provided debt to the Lakaka group and to Kuridala during the year as
disclosed in note 10. There are no exposure to losses in these companies apart
from the credit risk exposure for amounts owed. All the amounts advanced are
deemed as recoverable.
</FONT>

<P align="left"><FONT size="2">The Lakaka Group provides various services to the Company under long term
contracts for earthmoving and road maintenance. In addition, the Lakaka Group
has interests in other entities that provide services in catering, stevedoring
and various retail enterprises. Kuridala provides, for a fixed rental fee, 6
heavy earthmoving trucks used by the Company in its mining operations.
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%">
<TR valign="bottom">
    <TD width="70%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap><FONT size="1"><B>Related Companies</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002<br>US$'000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001<br>US$'000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000<br>US$'000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><HR size="1" noshade><B></B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><HR size="1" noshade><B></B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><HR size="1" noshade><B></B></FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">The Rio Tinto Group supplies labour on a
secondment basis and bears expenses on
behalf of the Company which are subsequently recharged to the Company</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">709</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,434</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,817</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>


<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">LMC Management fee</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,402</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,341</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,127</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Interest received from related entities
on finance provided (refer note 10)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">281</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">181</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">32</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Lakaka group supplies various services
to the Group on an arms length basis</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,080</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,255</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,045</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Blake Dawson Waldron provide legal
advice to the Group on an arms length
basis</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">23</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">11</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Kuridala, a landowner company, supplies
various services to the group on an arms
length basis</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,710</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,673</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">265</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">F-32</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="center"><FONT size="2"><B>LIHIR GOLD LIMITED<BR>
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS</B></FONT>

<P align="left"><FONT size="2"><B>NOTE 27: EARNINGS PER SHARE</B>
</FONT>

<P align="left"><FONT size="2">The number of ordinary shares has been based on the weighted average number of
ordinary shares on issue during the year. At 31 December 2002 no options were
outstanding.
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="90%">
<TR valign="bottom">
    <TD width="59%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net profit / (loss)&nbsp;attributable to ordinary shareholders</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="center"><FONT size="2">US$'000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">53,247</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">59,176</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(99,355</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Weighted average number of ordinary shares</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">'000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,142,334</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,142,334</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,137,150</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Basic EPS (US$/share)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.047</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.052</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(0.087</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Conversion of options into ordinary shares</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">'000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5,076</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Diluted number of ordinary shares</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">'000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,142,334</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,142,334</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,142,226</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Diluted EPS (US$/share)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.047</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.052</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(0.087</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P align="left"><FONT size="2"><B>NOTE 28: MERGER WITH NIUGINI MINING LIMITED</B>
</FONT>

<P align="left"><FONT size="2">On October&nbsp;6, 1999 the Company announced its agreement with Niugini Mining
Limited, subject to various conditions, to merge by Scheme of Arrangement under
Papua New Guinea Law. The basis of the merger was set out in the notice of
special meeting forwarded to shareholders on November&nbsp;27, 1999. Shareholders
on December&nbsp;15, 1999 approved the required resolutions to progress the merger.
Niugini Mining shareholders also approved the required resolutions in early
January 2000 and final approval from the National Court of Papua New Guinea was
obtained by Niugini Mining on February&nbsp;1, 2000. The merger was effective on
February&nbsp;2, 2000.
</FONT>

<P align="left"><FONT size="2">As a result of the merger, Niugini Mining became a 100 % owned subsidiary of
the Company. Niugini Mining continues to hold 161,527,405 ordinary shares in
the company, which have been reclassified as &#147;B&#148; class shares, refer Note 19.
</FONT>

<P align="left"><FONT size="2">The fair value of net assets and liabilities acquired in Niugini Mining Limited
were as follows:
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%">
<TR valign="bottom">
    <TD width="84%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$000</B></FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Sundry receivables</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,329</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Sundry payables</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,087</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cash and bank</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">54,355</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Investment in Lihir Gold shares</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">90,560</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Fair value of net assets acquired</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">145,157</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Shares issued as consideration</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">145,157</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Less elimination of cross shareholding</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(90,560</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net proceeds of issuing shares on consolidation</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">54,597</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cash effect on acquisition</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">54,355</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cash paid</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,814</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Cash obtained</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">52,541</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">Contingent liabilities relating to Niugini Mining Limited and its subsidiary
Niugini Mining Australia (Pty) Limited are disclosed in Note 21.
</FONT>

<P align="center"><FONT size="2">F-33</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="center"><FONT size="2"><B>LIHIR GOLD LIMITED<BR>
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS</B></FONT>

<P align="left"><FONT size="2"><B>NOTE 29: RECONCILIATION TO US GAAP</B>
</FONT>

<P align="left"><FONT size="2">The basis of preparation of these financial statements is set out in Note 1.
These accounting policies vary in certain important respects from the
accounting principles generally accepted in the United States (&#147;US GAAP&#148;). The
material differences affecting the profit and loss account and shareholders&#146;
equity between generally accepted accounting principles followed by the Company
and those generally accepted in the US are summarised below.
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">(i)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">Rehabilitation, restoration and environmental provisions: Under
IFRS, site closure, removal and rehabilitation costs are accounted for
using the full liability method under which the liability is recognised at
the present value of the expected cash outflows when the obligation is
incurred with a corresponding asset that is capitalised as a mine
property. For the purposes of US GAAP, the total (undiscounted)&nbsp;liability
is accrued incrementally over the life of the mine. Also, under IFRS, the
Company records an asset for these costs under the full liability method.
Under US GAAP, no asset would be recorded under the incremental method. In 2003
this difference will largely be eliminated by the adoption of FAS 143 for
US reporting purposes.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">(ii)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">Project financing: Prior to 1997, certain equity issuance and other
offering costs were capitalized as a part of mine properties for IFRS
purposes. US GAAP requires equity issuance costs to be offset against
shareholders&#146; equity.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">(iii)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">Interest capitalization as part of mine properties: Under IFRS, only
interest directly attributable to acquiring a qualifying asset is
capitalized whereas under US GAAP, the amount of interest capitalized is
based on an available interest concept, which results in additional
interest being capitalized under US GAAP.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">(iv)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">Depreciation of mine properties: Depreciation expense under US GAAP
differs from that under IFRS due to the difference in the basis for mine
properties under the two bases of accounting.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">(v)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">Impairment: Under IAS 36, the impairment test for determining the
recoverable amount of non-current assets is the higher of net selling
price and value in use. At 31 December&nbsp;31 1999 and again at 31 December
2000, the Company determined that an impairment charge was necessary as
the discounted cash flows were less than the carrying value of the asset.
Under US GAAP, the mine property assets were evaluated for impairment on
an undiscounted basis and, because the sum of expected (undiscounted)
future cash flows exceeded the asset&#146;s carrying amount, no impairment loss
was recognised in 1999. During 2000 the undiscounted value of expected
future cash flows were less than the asset&#146;s carrying values which
resulted in an impairment provision calculated on the same basis as for
IFRS. In 2002, having revised critical assumptions, including life of
mine, remaining reserves, a long term gold price assumption of $US305 and
a pre-tax real discount rate of 7.0%, the directors resolved to partially
reverse previously recognised impairments, to the value of $US37.9M. US
GAAP does not allow the reversal of impairment provisions previously
recognised.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">(vi)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">Deferred tax assets: Under US GAAP, changes in the income tax
valuation provision are recognised in the income statement unless they
relate to gains and losses included in comprehensive income but excluded
from net income. During 2001, the valuation provision was reduced with
the recognition of a deferred tax liability related to the fair value of
derivative financial instruments included in other comprehensive income,
and therefore the tax benefit was taken to other comprehensive income
under US GAAP (Refer to note 15).</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">(vii)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">New effective accounting standards for 2003, which will impact on the
Group accounting policies are:</FONT></TD>
</TR>
</TABLE>

<P align="left"><FONT size="2"><I>FAS 143: Accounting for asset retirement obligations</I>
</FONT>

<P align="left"><FONT size="2">FAS 143 adopts the same principles as in IFRS, described in note 1h, with
possible differences arising from the estimate of future costs, the discount
rate and whether a full liability needs to be created. The Group anticipates
that by adopting FAS 143 in 2003, the reconciling difference currently stated
for the restoration and rehabilitation liability will be eliminated.
</FONT>

<P align="center"><FONT size="2">F-34</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="center"><FONT size="2"><B>LIHIR GOLD LIMITED<BR>
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS</B></FONT>
<P align="left"><FONT size="2">The Group does not expect any impact from the adoption of FASB Interpretation
No.&nbsp;45: &#147;Guarantor&#146;s Accounting and Disclosure Requirements for Guarantees,
Including Indirect Guarantees of Indebtedness of Others&#148; or FASB Interpretation
No.&nbsp;46 &#147;Consolidation of Variable Interest Entities&#148;.
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%">
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="61%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Shareholders&#146; Equity in accordance with IAS GAAP</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">426,410</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">496,248</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">383,456</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Adjusted as follows:</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Rehabilitation, restoration and environmental (i)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&#149; Provisions</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">8,874</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">8,255</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">7,198</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&#149; Capitalized rehabilitation costs (See Note 12)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(9,274</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(8,281</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(6,804</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Mine properties &#151; project financing costs (ii)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(11,470</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(11,470</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(11,470</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Mine properties &#151; capitalised interest (iii)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,611</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,611</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,611</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Depreciation of mine properties (iv)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(8,404</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(8,404</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(8,404</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Impairment provision under IAS GAAP (vi)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">319,524</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">357,417</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">357,417</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Impairment provision under US GAAP (vi)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(339,154</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(339,154</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(339,154</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Accumulated adjustments under US GAAP</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(38,293</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(26</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>394</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD colspan="2"><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Shareholders&#146; Equity under US GAAP</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>388,117</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>496,222</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>383,850</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="95%">
<TR valign="bottom">
    <TD width="69%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Net income / (loss)&nbsp;in accordance with IAS GAAP</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">53,247</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">59,176</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(99,355</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Adjusted as follows:</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Rehabilitation, restoration and environmental provisions (i)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(374</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(420</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(316</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Mine properties &#151; capitalised interest (ii)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Depreciation of mine properties (iii)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(9,516</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Impairment charge / (reversal)&nbsp;under IAS GAAP</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(37,893</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">120,645</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Impairment charge under US GAAP</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(339,154</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Deferred tax benefit under IAS GAAP</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">16,426</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(16,426</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Deferred tax benefit under US GAAP</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Net income / (loss)&nbsp;under US GAAP</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>31,406</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>42,330</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(327,696</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>US GAAP earnings per share (US$/share)</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.027</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.038</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(0.288</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
</TABLE>
</CENTER>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%">
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Comprehensive income</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">31,406</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">42,330</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(327,696</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B>Net income / (loss)&nbsp;under US GAAP</B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">31,406</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">42,330</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(327,696</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Other comprehensive income under IAS GAAP</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(123,085</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">53,616</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Release of valuation allowance under US GAAP (vi)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(16,426</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">16,426</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Other comprehensive income under US GAAP</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(139,511</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">70,042</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Comprehensive income / (loss)&nbsp;under US GAAP</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(108,105</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>112,372</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(327,696</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">F-35</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="center"><FONT size="2"><B>LIHIR GOLD LIMITED<BR>
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS</B></FONT>

<P align="left"><FONT size="2"><B>Cash flow statement under US GAAP</B>
</FONT>

<P align="left"><FONT size="2">In terms of US GAAP bank overdrafts are treated as financing activities and not
as cash. The balance and inflow from financing cash flows per the cash flow
statement under US GAAP would therefore increase by US$1.297&nbsp;million.
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
    <TD width="58%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="left"><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="left"><FONT size="1"><B>Statement of changes in equity under US GAAP</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1"><HR size="1" noshade></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Retained earnings / (accumulated Losses)
Balance at January 1</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(377,601</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(489,973</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(163,971</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Comprehensive income / (loss)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(108,105</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">112,372</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(327,696</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">

<TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Dividend &#151; stock options</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,694</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Balance at December 31</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(485,706</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(377,601</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>(489,973</B></FONT></TD>
    <TD nowrap><FONT size="2"><B>)</B></FONT></TD>
</TR>
</TABLE>
</CENTER>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="95%">
<TR valign="bottom">
    <TD width="73%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>US$&#146;000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Paid up capital
</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>


<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Balance at 1 January
</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">873,822</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">873,822</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">820,919</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Shares issued</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">54,597</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">

<TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Additional paid up capital &#151; stock options (expired January&nbsp;31, 2000)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,694</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Balance at 31 December</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>873,822</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>873,822</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>873,822</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>388,116</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>496,222</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2"><B>383,850</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%">
<TR valign="bottom">
    <TD width="69%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="left"><FONT size="1"><B>EPS under US GAAP</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net Earnings &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; US$&#146;000</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">31,406</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">42,330</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(327,695</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom">

<TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net Earnings Per Common Share &#151; Basic (US$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.027</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.038</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(0.288</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">

<TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Net Earnings Per Common Share &#151; Diluted (US$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share)</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.027</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.038</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(0.288</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P align="left"><FONT size="2">Basic earnings per share is computed by dividing income available to common
stockholders (the numerator) by the weighted average number of common shares
(the denominator) for the period. The computation of diluted earnings per
share is similar to basic earnings per share, except that the denominator is
increased to include the number of additional common shares that would have
been outstanding if the potentially dilutive common shares had been issued.
</FONT>

<P align="left"><FONT size="2">In loss making periods basic and diluted earnings per share are identical.
Diluted earnings per share also give effect to the impact common stock options
would have on the average common shares outstanding if converted at the
beginning of the year. Stock options are anti-dilutive and therefore were not
included in the calculation of basic and diluted loss per share in 2000. There
were no outstanding options for 2001 or 2002.
</FONT>

<P align="left"><FONT size="2">The numerator in calculating both basic and diluted earnings per share for each
year is the reported net income determined above for US GAAP purposes. The
denominator is based on the following weighted average number of common shares:
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
    <TD width="20%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="left" colspan="3"><FONT size="1"><B>(in thousands)</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="1"><FONT size="1"><B>2002</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="1"><FONT size="1"><B>2001</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="1"><FONT size="1"><B>2000</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD colspan="1"><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="1"><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="1"><HR size="1" noshade></TD>

</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Basic</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,142,334</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,142,334</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,137,150</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Diluted</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,142,334</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,142,334</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,137,150</FONT></TD>

</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">F-36</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="center"><FONT size="2"><B>LIHIR GOLD LIMITED<BR>
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS</B></FONT>
<P align="left"><FONT size="2"><B>SUBSEQUENT EVENTS (UNAUDITED)</B>
</FONT>

<P align="left"><FONT size="2">The Board of Directors announced at Lihir&#146;s Annual General Meeting on April&nbsp;29
2003 that a dividend of 2 Australian cents per share would be paid to holders
of ordinary shares in the company. The record date, at which time eligibility
to receive the dividend will be determined, has been declared as July 1 2003
and the payment date as July&nbsp;16 2003.
</FONT>

<P align="left"><FONT size="2">A Heads of Agreement was signed on April&nbsp;27 2003 between Lihir Gold, the
Independent State of Papua New Guinea and representatives of Lihirian
landowners which is intended to resolve issues surrounding Lihirian landowners
ownership of equity in the company. Although this agreement is not legally
binding on any party, it is anticipated that the company will,
during the second half of 2003, contribute approximately US$3.5&nbsp;million to a
community grant scheme.
</FONT>

<P align="center"><FONT size="2">F-37</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P align="center"><FONT size="2"><B>LIHIR GOLD LIMITED<BR>
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS</B></FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%">
<TR valign="bottom">
    <TD width="65%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="11"><FONT size="1"><B>US$ thousands</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="11"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="left"><FONT size="1"><B><i>Schedule II -
Movement in Valuation Allowances</i></B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2002</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2001</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>2000</B></FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B><I>Provision for Doubtful Debts</I></B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Balance, beginning of year</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,041</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">826</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">195</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Additions: charges to costs and expenses</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">333</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">215</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">631</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Write-off&#146;s</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">

<TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>


<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Balance, end of year</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,374</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,041</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">826</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B><I>Provision for Stores Stock Obsolescence</I></B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Balance, beginning of year</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,882</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">896</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Additions: charges to costs and expenses</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">692</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">986</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Write-off&#146;s</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(104</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Balance, end of year</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,574</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,882</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">896</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B><I>Provision for Impairment of Mining Properties</I></B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Balance, beginning of year</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">340,111</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">340,111</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">223,752</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Additions: charges to costs and expenses</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">116,359</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Write-off&#146;s</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(36,960</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Balance, end of year</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">303,151</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">340,111</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">340,111</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2"><B><I>Provision for Impairment of Deferred Mining Costs</I></B></FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Balance, beginning of year</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,780</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,286</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">13,020</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Additions: charges to costs and expenses</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,286</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Write-off&#146;s</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(1,780</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(2,506</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">(13,020</FONT></TD>
    <TD nowrap><FONT size="2">)</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Balance, end of year</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,780</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,286</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>


<P align="center"><FONT size="2">F-38</FONT>



</BODY>
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LIHIR GOLD LIMITED
Table of Contents
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 20-F
[  ]
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b)
OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
[X]
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended: December 31, 2002
OR
[  ]
TRANSITION REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission file number: 2-6860
Lihir Gold Limited
Papua New Guinea
7th Floor, Pacific Place,
Cnr Champion Parade, Musgrave Street
Port Moresby, Papua New Guinea
_________
Securities registered pursuant to Section 12(b) of the Act:
None
_________
Securities registered or to be registered pursuant to Section 12(g) of the Act:
Lihir Gold Limited Ordinary Shares of no par value
Nasdaq National Market*
American Depositary Shares, each of which represents twenty
Nasdaq National Market
Lihir Gold Limited Ordinary Shares and which are
evidenced by American Depositary Receipts
_________
* Not for trading but only in connection with the registration of the American Depositary Shares representing such shares, pursuant to the requirements of the Securities and Exchange Commission.
_________
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
None
_________
Indicate the number of outstanding shares of each of the issuer's classes of
capital or common stock as of the close of the period covered by the annual
report (at December 31, 2002).
Lihir Gold Limited Ordinary Shares of no par value:
1,142,334,215 fully paid shares
Lihir Gold Limited Treasury "B' Shares
161,527,405
_______________
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.
Yes
X
No___
Indicate by check mark which financial statement item the registrant has elected to follow.
Item 17 ___
Item 18
X
TABLE OF CONTENTS
Forward Looking Statements
PART 1
Item 1. Identity Of Directors, Senior Management, And Advisors
Item 2. Offer Statistics and Expected Timetable
Item 3. Key Information
A. Selected Financial Data
B. Capitalization and Indebtedness
C. Reasons for the Offer and Use of Proceeds
D. Risk Factors
Item 4. Information on the Company
A. History and Development of the Company
B. Business Overview
C. Organization and Structure
D. Property, Plant and Equipment
Item 5. Operating and Financial Review and Prospects
A. Operating Results
B. Liquidity and Capital Resources
C. Research and Development, Patents and Licenses, etc
D. Trend Information
E Events Subsequent to Signing of the Financial Statements
Item 6. Directors, Senior Management and Employees
A. Directors and Senior Management
B. Compensation
C. Board Practices
D. Employees
E. Share Ownership
Item 7. Major Shareholders and Related Party Transactions
A. Major Shareholders
B. Related Party Transactions
C. Interests of Experts and Counsel
Item 8. Financial Information
A. Consolidated statements and other financial information
B. Significant Changes
Item 9. The Offer and Listing
Item 10. Additional Information
A. Share Capital
B. Memorandum and Articles of Association
C. Material Contracts
D. Exchange Controls
E. Taxation
F. Dividends and Paying Agents
G. Statement by Experts
H. Documents on Display
I. Subsidiary Information
Item 11. Quantitative and Qualitative Disclosure About Market Risk
A. Quantitative Information about Market Risk
B. Qualitative Information about Market Risk
Item 12. Description of Securities Other than Equity Securities
PART II
Item 13. Defaults, Dividend Arrearages and Delinquencies
Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
PART IV
Item 17. Financial Statements
Item 18. Financial Statements
Item 19 — Exhibits
Certification
NOTE 10: RECEIVABLES
SIGNIFICANT SUBSIDIARIES
Table of Contents
Table of Contents
Forward Looking Statements
5
PART 1
6
Item 1. Identity Of Directors, Senior Management, And Advisors
6
Item 2. Offer Statistics and Expected Timetable
6
Item 3. Key Information
6
A. Selected Financial Data
6
B. Capitalization and Indebtedness
9
C. Reasons for the Offer and Use of Proceeds
9
D. Risk Factors
9
Item 4. Information on the Company
19
A. History and Development of the Company
19
B. Business Overview
22
C. Organization and Structure
34
D. Property, Plant and Equipment
34
Item 5. Operating and Financial Review and Prospects
47
A. Operating Results
47
B. Liquidity and Capital Resources
62
C. Research and Development, Patents and Licenses, etc
65
D. Trend Information
65
E Events Subsequent to Signing of the Financial Statements
66
Item 6. Directors, Senior Management and Employees
67
A. Directors and Senior Management
67
B. Compensation
69
C. Board Practices
71
D. Employees
75
E. Share Ownership
77
Item 7. Major Shareholders and Related Party Transactions
79
A. Major Shareholders
79
B. Related Party Transactions
82
C. Interests of Experts and Counsel
83
Item 8. Financial Information
84
A. Consolidated statements and other financial information
84
B. Significant Changes
85
Item 9. The Offer and Listing
85
Item 10. Additional Information
87
A. Share Capital
87
B. Memorandum and Articles of Association
87
C. Material Contracts
91
3
Table of Contents
D. Exchange Controls
101
E. Taxation
102
F. Dividends and Paying Agents
107
G. Statement by Experts
107
H. Documents on Display
107
I. Subsidiary Information
107
Item 11. Quantitative and Qualitative Disclosure About Market Risk
108
A. Quantitative Information about Market Risk
108
B. Qualitative Information about Market Risk
110
Item 12. Description of Securities Other than Equity Securities
111
PART II
111
Item 13. Defaults, Dividend Arrearages and Delinquencies
111
Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
111
PART IV
111
Item 17. Financial Statements
111
Item 18. Financial Statements
111
Item 19 – Exhibits
112
4
Table of Contents
Forward Looking Statements
This annual report contains certain forward-looking statements, including
statements regarding (i) estimated reserves, (ii) certain plans, strategies and
objectives of management, (iii) anticipated production or construction
commencement dates, (iv) expected costs or production output, and (v) the
anticipated productive lives of projects and mines. Such forward-looking
statements are not guarantees of future performance and involve known and
unknown risks, uncertainties and other factors, many of which are beyond the
control of Lihir, which may cause actual results to differ materially from
those expressed in the statements contained in this Annual Report.
For example, future revenues from operations or mines described in this annual
report will be based in part upon the market price of gold produced, which may
vary significantly from current levels. Other factors that may affect the
actual production output and anticipated lives of operations, mines or
facilities include the ability to profitably produce and transport the gold
extracted to the market, the impact of foreign currency exchange rates on cost
inputs and activities of governmental authorities in Papua New Guinea and
elsewhere, including increases in taxes, changes in environmental and other
regulations and political uncertainty. Lihir can give no assurances that the
estimated reserves figures, costs, production output or anticipated lives of
its operations and facilities will not materially differ from the statements
contained in this annual report.
5
Table of Contents
PART 1
Item 1. Identity Of Directors, Senior Management, And Advisors
Not applicable.
Item 2. Offer Statistics and Expected Timetable
Not applicable
Item 3. Key Information
A.     Selected Financial Data
The following selected financial data should be read in conjunction with the
financial statements and the notes thereto, which have been audited by
PricewaterhouseCoopers of Papua New Guinea, independent public accountants,
whose report is included at Item 18 of this annual report, and Item 5 entitled
"Operating and Financial Review and Prospects". The income statement data and
the expenditure and financing data set forth below with respect to the years
ended December 31, 2000, 2001 and 2002 and the balance sheet data at December
31, 2000, 2001 and 2002 are derived from, and are qualified by reference to,
the audited financial statements of Lihir prepared in accordance with
International Financial Reporting Standards ("IFRS" or "IAS") and included
elsewhere in this annual report and should be read in conjunction with those
financial statements and the notes thereto.
The income statement data and the expenditure and financing data set forth
below with respect to the years ended December 31, 1998 and 1999 and the
balance sheet data at December 31, 1998 and 1999 are derived from, and are
qualified by reference to, the audited financial statements of Lihir not
included in this annual report and should be read in conjunction with those
financial statements and notes thereto.
6
Table of Contents
Year ended December 31,
(In US$ millions, except where indicated)
2002
2001
2000
1999
1998
Amounts calculated in accordance with
IFRS:
Income Statement Data:
Sales revenue
(1)
213.2
233.2
226.6
206.0
181.5
Profit/(loss) from ordinary activities
after taxation
(2)
53.2
59.2
(99.4
)
(255.3
)
(8.8
)
Earnings per share, basic and diluted
(3)
0.047
0.052
(0.087
)
(0.262
)
(0.009
)
Number of ordinary shares (millions)
(4)
1,142.3
1,142.3
1,137.1
974.8
924.6
Balance Sheet Data
(5)
:
Total assets
576.7
585.3
547.6
643.9
909.2
Cash and current receivables held
38.5
53.0
69.0
56.7
86.2
Current liabilities
27.5
33.3
64.8
77.4
73.3
Long term obligations
122.7
55.7
99.3
138.4
283.3
Total shareholders' equity
(6)
426.4
496.3
383.5
428.2
552.6
Paid up capital
(7)
873.8
873.8
873.8
819.2
688.3
Cash dividends per ordinary share
(3)
—
—
—
—
—
Expenditure and Financing Data:
Cash flow from operating activities
22.8
62.1
39.1
8.3
23.7
Total expenditure on investing activities
24.4
36.5
2.0
33.4
32.5
Financing activities:
Issuance of ordinary shares
—
—
—
130.9
67.0
Restructure hedgebook
—
—
42.6
20.6
—
Drawdown of loans
—
—
—
—
4.9
Repayment of loans
(3.8
)
(28.4
)
(85.8
)
(162.0
)
(11.3
)
Total financing activities
(3.8
)
(28.4
)
(43.2
)
(10.5
)
60.6
Amounts calculated in accordance with US
GAAP:
Sales revenue
(1)
213.2
233.2
226.6
206.0
181.5
Net income/(loss)
31.4
42.3
(327.7
)
(15.8
)
(8.2
)
Earnings per Share, basic and diluted
(3)
0.027
0.038
(0.288
)
(0.016
)
(0.009
)
Number of ordinary shares (millions)
(4)
1,142.3
1,142.3
1,137.1
974.8
924.6
Total assets
(5)
529.5
577.0
540.8
866.1
892.2
Total shareholders' equity
(5)
388.1
496.2
383.8
656.9
541.8
Long term obligations
(5)
113.9
47.4
92.1
131.9
277.2
7
Table of Contents
(1)
Alternative terminology: "net
sales" or "operating revenues"
For consistent disclosure with 2002, sales have been restated for 1998
– 2000 to include amortization of hedging costs, which had previously
been classified as an operating cost prior to 2001.
(2)
Alternative terminology: "income/(loss) from operations",
"income/(loss) from continuing operations" or "net income/(loss)" since
Lihir has no discontinued operations and no income from non-operational
sources.
(3)
In US$ per share. Lihir has not paid any dividends to date.
(4)
As adjusted to reflect changes in capital
(5)
At period end
(6)
Alternative terminology: "net assets"
(7)
Alternative terminology: "capital stock"
Impairment of Mine Assets
Under IAS 36 "Impairments of Assets", impairments of assets are recognized
whenever the carrying amount of an asset exceeds its recoverable amount. The
recoverable amount is measured as the higher of net selling price and value in
use. Value in use is calculated by discounting future cash flows of the
company's cash generating unit using a risk adjusted pre-tax discount rate.
The cash-generating unit comprises mine properties and deferred mining costs.
In the previous 5 years the following assumptions have been used in
determining 'value in use' of the company's cash generating unit, giving rise
to the following impairment (charges) / reversals.
2002
2001
2000
1999
1998
Long term gold price — US$ / oz
305
280
300
325
350
Discount Rate
7
%
6
%
6
%
7
%
7
%
Impairment (charge) / reversal
- IAS GAAP US$ millions
37.9
0
(120.6
)
(236.8
)
0
- US GAAP US$ millions
0
0
(339.2
)
0
0
The decline in the spot gold price since 1997 is reported to be for reasons
that include declining inflation in many countries and sales by the central
banks of several countries of portions of gold held by them as reserves. The
recent rally in the gold price, to a high of US$382 / oz, has been sustained by
various factors, including growing global uncertainty, conflict in the Middle
East and a weaker US dollar.
There can be no assurance that the assumed per ounce gold price will be
realized in future spot sales or that other factors underlying the estimate of
recoverable amount will not change. Changes in the time value of money and in
the assessment of risks specific to the Lihir project may require changes to
the discount rate assumption. Adverse changes in these assumptions could
materially reduce Lihir's estimate of its recoverable amount, thereby
negatively impacting its reported financial position and results of operations,
and its future cash flows.
8
Table of Contents
B.     Capitalization and Indebtedness
Not applicable.
C.     Reasons for the Offer and Use of Proceeds
Not applicable.
D.     Risk Factors
An investment in Lihir's American Depository Shares (ADSs) and ordinary shares
involves a high degree of risk. The following factors, some of which are not
typically associated with investing in equity securities of companies from the
United States, should be carefully considered by prospective investors in
evaluating an investment in the ADSs and ordinary shares.
Lihir is dependent on a single operation
Lihir has only been in full production from sulfide ore since October 1997 and
accordingly only has a limited operating history. As a result, Lihir is
subject to all of the risks inherent in newer mining operations and business
enterprises. Other than exclusive exploration rights over the rest of Lihir
Island, the company has no assets or operations other than those relating to
the Lihir operation. While the company intends to continue to undertake
exploration elsewhere on Lihir Island, for at least the next few years it is
expected that this exploration activity will be limited and that the company's
principal activity will be owning, further developing and operating the Lihir
operation. Accordingly, Lihir's commercial viability is completely dependent
upon the successful operation of the Lihir operation. No assurances can be
given that the company will be able to sustain successful mining operations or
that the Lihir operation will remain commercially viable.
Lihir's operations may be adversely affected by difficult geological conditions
The success of the Lihir operation depends, in part, upon the success of
Lihir's engineering solutions to difficult hydrological and geothermal
conditions. To Lihir's knowledge, these conditions have never been experienced
before in this combination in a mine of the size of the Lihir operation.
Significant removal of both groundwater and sea water inflow and geothermal
control is required during mining. While Lihir has achieved considerable
success to date in addressing these conditions, no assurance can be given that
future efforts will be adequate or meet expectations. A failure to resolve any
unexpected problems relating to these conditions at a commercially reasonable
cost could adversely affect the economics and/or feasibility of the Lihir
operation. See "Information on the Company – Business Overview – Description
of Operations – Mining – Dewatering and Geothermal Control".
In addition, Lihir Island is a volcanic seamount and the Lihir operation is
located within the caldera of a volcano believed to be inactive. Although it
is located 90 kilometers away from a seismically active area of PNG, based on
seismic investigations conducted for the joint venture and publicly available
information, the company believes that Lihir Island is situated in an area of
moderate seismic activity. Reviews of Seismic Hazard commissioned by
9
Table of Contents
LMC in 2000, and the PNG Geological Survey (Anton & Ripper, 1999) have
supported this position. While earthquakes of moderate magnitude (up to M-5.6)
have occurred from time to time within 50 kilometers of the Lihir operation
site, the level of shaking at the site associated with these events, while
noticeable, has not been severe. The Maximum Credible Earthquake predicted
from the foregoing studies is located at average distance of between 20 and 35
km from Lihir, with a magnitude of 7.5 and an estimated Return Period of
between 1200 and 2000 years. A seismic hazard study commissioned by the joint
venture was used to determine seismic design criteria for the Lihir operation.
Structures, pit slopes and earth embankments are designed to resist without
yielding the degree of earthquake shaking estimated to have a 50% probability
of being exceeded during the Lihir operation's design life and to resist
without causing major damage or injury earthquake shaking estimated to have a
10% probability of being exceeded during the Lihir operation's design life.
These criteria are accepted internationally, and exceed the requirements of the
PNG Earthquake Loading Code for the estimated mine life of 30 years.
Notwithstanding the foregoing, no assurance can be given that the Lihir
operation will not be adversely affected by volcanic or earthquake activity
during the life of the Lihir operation.
Lihir's insurance does not address all operating risks
The mine, processing plant or related facilities may have to be shut down or
operations may otherwise be disrupted by a variety of risks and hazards that
are beyond the control of the company, including environmental hazards,
industrial accidents, technical failures, labor disputes, unusual or unexpected
rock formations, flooding and extended interruptions due to inclement or
hazardous weather conditions, fires, explosions and other accidents at the
mine, processing plant or related facilities. These risks and hazards could
also result in damage to, or destruction of, mineral properties or production
facilities, personal injury, environmental damage, business interruption,
monetary losses and possible legal liability. While Lihir currently intends to
maintain insurance within ranges of coverage the company believes to be
consistent with industry practice, no assurance can be given that Lihir will
continue to be able to obtain insurance coverage at reasonable rates or that
any coverage it arranges will be adequate and available to cover any such
claims. See "Information on the Company – Property, Plant and Equipment -
Insurance."
Lihir is subject to Papua New Guinea political risks
The Lihir operation is located in Papua New Guinea, or PNG, a country subject
to a relatively high degree of political risk. For example, the Export Finance
and Insurance Corporation based in Sydney as of the date of this annual report
graded PNG for political risk in category 4 out of 6 (1 being best). The Lihir
operation is subject to political, economic and other uncertainties, including
the risk of civil rebellion, expropriation, nationalization, renegotiation or
nullification of existing contracts, mining licenses and permits or other
agreements, changes in laws or taxation policies, currency exchange
restrictions, changing political conditions and international monetary
fluctuations. Future PNG Government actions concerning the economy or the
operation and regulation of nationally important facilities such as mines could
have a significant effect on the company. No assurances can be given that the
Lihir operation will not be adversely affected by future developments in PNG.
As part of the syndicated facility agreement signed on November 22, 2000, the
banks have required, and Lihir has obtained for the benefit of the banks,
political risk insurance covering 100% of the borrowings under the facility,
which is a condition precedent to those borrowings and any termination of this
political risk insurance will constitute an event of default under the
facility. No political risk insurance has been, or is currently proposed to
be, arranged for the benefit of the company.
10
Table of Contents
Fiscal and tax policy in Papua New Guinea can be uncertain and subject to
sudden changes. For example, the PNG Government imposed and later replaced a
4% mining levy and 15% interest withholding tax in 1998 and 1999. See "
Operating and Financial Review and Prospects – Operating Results" for a
discussion of these tax issues.
In addition to the national PNG Government, PNG has a system of 19 provincial
level governments which are funded almost entirely by direct grants from the
national PNG Government. In the past, there have been disagreements between
the PNG Government and the provincial level governments of PNG, primarily in
relation to power sharing and revenue arrangements.
The New Ireland provincial government exchanged its equity participation option
in the project for undertakings by the PNG Government to provide an annual
support grant to the New Ireland province of 3,000,000 Kina per year for
expenditure on infrastructure projects. Persistent failure by the PNG
Government to comply with these undertakings could have an adverse effect on
the relationship between the national and provincial government, and this could
result in the New Ireland provincial government taking steps that may have
negative consequences for the Lihir operation.
Lihir is vulnerable to civil unrest
There have been instances of civil unrest within PNG. In 1989, civil unrest on
Bougainville Island (which is one of the New Guinea Islands) developed into an
armed rebellion against the PNG Government by the "Bougainville Revolutionary
Army" and Bougainville Island purported to secede from PNG. This resulted in,
among other things, the closure of the Panguna copper mine, which has not
reopened. Lihir believes there are important historical and cultural
differences between Bougainville and Lihir Island. The company has also
devoted significant time and effort to accommodating the concerns of the
Lihirians, and has entered into an integrated compensation, relocation and
benefits package that covers (in different ways) the affected landowners,
future affected generations and Lihirians generally. See "Information on the
Company – Property Plant and Equipment — Community Affairs". To date there
have been no significant incidents of an extended nature. While the company
believes these cultural and historical differences and its efforts will
significantly reduce the risk of the type of civil unrest experienced in
Bougainville, no assurances can be given that the Lihirians will not disrupt
operations at the Lihir Operation in the future.
Lihir could be exposed to pressure on the level of future PNG Government
participation
Since 1978 the PNG Government has maintained a policy of holding an equity
participation option of up to 30% in mining projects located in PNG. This
equity has been purchased on a historical or sunk cost basis. In 1992, the
previous PNG Government announced a decision to increase the PNG Government's
equity interest in an existing gold project at Porgera and renegotiated that
interest from 10% to 25%. Although this move was resisted by the other joint
venturers in the Porgera project, a price was ultimately negotiated and
accepted by all parties.
Through its wholly owned subsidiary, MRL, the PNG Government acquired a 30%
equity interest in the Lihir operation which was exchanged for a 30% equity
interest in the company immediately prior to the consummation of the global
offering in 1995. One half of this equity interest was committed to the people
of Lihir. As a result of significant restructuring in Lihir's share register,
the PNG Government, as of May 31, 2002, held 6.76% of the project in trust for
the people of Lihir.
11
Table of Contents
Under the State Equity Acquisition Agreement dated March 17, 1995 the PNG
Government expressly waived any rights it might otherwise have to acquire an
equity interest in any additional mineral discoveries made by the company on
Lihir Island pursuant to the Exploration Licence (or any extension or renewal
thereof) in recognition of the fact that it has already been given the
opportunity to participate in such discoveries through its indirect equity
interest in the company. However, while Lihir is not aware of any current
intention on the part of the PNG Government to do so, no assurance can be given
that the PNG Government will not seek to acquire additional equity in the Lihir
operation and/or the company in the future. See "Additional Information –
Material Contracts — PNG Government Participation".
Lihir is vulnerable to landowner identification and compensation issues
Approximately 97% of land in PNG is held under customary land tenure, the
nature and terms of which vary considerably throughout the country. In
general, land held under such tenure cannot be alienated and is almost entirely
communally owned. Title to most land in PNG has not been recorded or
registered and there has been little surveying. As a result, title to land (in
Western legal terms) is often unclear. Disputes over land ownership are
common, especially in the context of resource developments. Identifying all
the affected landowners, and structuring compensation arrangements that are
both fair and acceptable to all of them, is often extremely difficult. Lihir
believes that the satisfactory resolution of local landowner concerns is
essential to the development and operation of a mine in PNG. The failure to
adequately address landowner issues has contributed to the disruption of other
mining projects in PNG. While the company has spent considerable time, effort
and expense in an attempt to resolve landowner issues relating to the Lihir
operation, no assurance can be given that disruptions arising out of landowner
dissatisfaction will not occur. See "Information on the Company – Business
Overview — Description of Operations – Workforce and Community Health".
Lihir's results are dependent upon volatile gold prices
Because substantially all of Lihir's revenues are derived from the sale of
gold, Lihir's earnings are closely related to the price of gold. Gold prices
fluctuate widely and are affected by numerous industry factors beyond the
company's control, such as central bank sales, demand for precious metals,
forward selling by producers and purchases of gold and production cost levels
in major gold producing regions, including South Africa and the various
countries located in the former Soviet Union. Moreover, gold prices are also
affected by macro-economic factors such as expectations regarding inflation,
interest rates, currency exchange rates, and global and regional demand and
political and economic situations. Gold market prices are also affected by
worldwide production levels, which have increased in recent years. While the
current demand for, and supply of, gold affects gold prices, this does not
occur in the same manner as current demand and supply affects the prices of
other commodities. The potential supply of gold consists of new mine
production plus existing stocks of bullion and fabricated gold held by
governments, financial institutions, industrial organizations and individuals.
Since mine production in any single year constitutes a very small portion of
the total supply of gold, normal variations in current production do not
necessarily have a significant effect on the supply of gold or its price. In
addition, the price of gold has on occasion been subject to very rapid
short-term changes because of speculative activities. All these factors are
beyond Lihir's control and accordingly it is impossible for the management of
Lihir to predict future movements in gold prices.
Gold prices declined significantly from the fourth quarter of 1997 and
continued to languish below a level of US$300 / ounce for most of 1998, 1999,
2000 and 2001. In 2002 the gold price rose through $300 per ounce reaching a
high of $US382 per ounce in February 2003. The current spot rate (as of May
2003) of approximately $US 360 per ounce remains below the price levels upon
which the company originally estimated its reserves and
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designed its pit shell (US$365 and US$375 per ounce, respectively). See
"Information on the Company – Property, Plant and Equipment – Reserves
Estimates". If gold were to further decline over an extended period, that
could render certain of Lihir's ore reserves uneconomic and require a
re-evaluation and/or downward adjustment of ore reserves. It could also result
in losses and write-downs of Lihir's assets. If gold were to fall below
Lihir's variable production costs for a sustained period, Lihir might have to
curtail or suspend some or all of its operations.
The following table sets forth the high, low and average afternoon fixing
prices for gold on the London Bullion Market (the "London P.M. Fix") for the
periods indicated
.
Price in US$ Per Ounce of Gold
Year
High
Low
Average
1988
484
395
437
1989
416
356
381
1990
424
346
384
1991
403
344
362
1992
360
330
344
1993
406
326
360
1994
396
370
384
1995
396
372
384
1996
415
367
397
1997
366
283
331
1998
313
273
294
1999
326
253
279
2000
313
264
279
2001
293
256
271
2002
349
278
310
2003 to May 31, 2003
382
321
348
The London P.M. Fix on 31 May 2003 was
US$361 per ounce of gold.
Lihir may seek to mitigate the effect of gold price volatility, in part,
through hedging strategies, which may include periodic purchases or sales of
"put" or "call" options, spot deferred sales and forward sales covering a
portion of its gold production at fixed future prices. Certain hedging
transactions may eliminate or limit additional revenues that Lihir would
otherwise receive from any future rises in the gold price. In addition,
Lihir's profitability could be adversely affected if for any reason its
production of gold is unexpectedly interrupted and as a result it is unable to
produce sufficient gold to cover any forward sales commitments it may have
made.
Lihir's prospects are dependent on reserves estimates and future experience
The reserve estimates presented in this annual report are estimates based on a
gold price of US$305 per ounce for a cut off grade of 1.7 g Au/t using end 2002
mine life cost estimates and within a mine pit designed at US$305 per ounce.
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No assurance can be given that the indicated amount of gold will be recovered
or at the rates estimated. Gold reserve estimates are expressions of judgment
based on knowledge, experience and industry practice, and may require revision
based on actual production experience. Estimates that are valid estimates when
made may change significantly when new information becomes available. Such
estimates are necessarily imprecise and depend to some extent on statistical
inferences, which may prove unreliable. Should Lihir encounter mineralization
or formations different from those predicted by past drilling, sampling and
similar examinations, reserve estimates may have to be adjusted and mining
plans may have to be altered in a way that might adversely affect Lihir's
operations. The reserve estimates contained in this annual report have been
determined based on assumed gold prices, cut-off grades and operating costs
that may prove to be inaccurate. Fluctuations in the market price of gold, or
increased production costs or reduced recovery rates, may render ore reserves
containing relatively lower grades of mineralization uneconomic to recover and
may ultimately result in a restatement of reserves.
Lihir's financing agreements impose limitations on its operations
The syndicated facility agreement signed by Lihir on November 22, 2000 contains
numerous events of default which would entitle the banks to prevent future
draw-downs, declare all outstanding borrowings under the facility to be
immediately due and payable and foreclose on Lihir's assets, almost all of
which have been pledged or otherwise encumbered to secure such borrowings.
Finally, the facility contains a number of covenants by the company which are
likely to restrict its future operations, including but not limited to
agreements not to engage in any business activities other than those relating
to the Lihir operation and the proposed exploration program, to incur any
additional indebtedness or encumbrances or to pay any dividends or make certain
other restricted payments unless certain conditions are met, in each case
without the required consent of the banks. See "Operating and Financial Review
and Prospects – Liquidity and Capital Resources" and "Additional Information –
Material Contracts – Financing Agreements".
Lihir has limited financial resources
Lihir has limited financial resources.
While Lihir currently believes that it
has or will have access to resources sufficient to finance its operations, the
adequacy of Lihir's financial resources will depend upon its ability to
generate sufficient revenues from gold production and to keep its costs and
other expenditures within its current estimates. If Lihir is unable to
generate such revenues, keep its costs and expenditures within such estimates,
or if unexpected conditions or developments occur, Lihir could require more
funds than are currently available to it. In that case, Lihir might not be
able to borrow the necessary additional funds or to do so at reasonable rates
because almost all of its assets have already been pledged or otherwise
encumbered to secure the borrowings under the syndicated facility agreement.
Lihir is vulnerable to environmental risks
The Lihir operation is subject to PNG laws and regulations regarding
environmental matters and the discharge of hazardous wastes and materials. The
Lihir operation has some environmental impacts, including land and habitat
impacts arising from the use of land for mining and related activities and
certain impacts on streams and the marine environment near the project site
resulting from water use, ocean waste rock disposal, construction and drainage
run-off and submarine disposal of tailings by pipeline in deep water. While
the Lihir operation currently complies with the applicable licence conditions
accepted by the PNG Government in granting project approval, the eventual,
cumulative environmental impacts could be greater than the estimates in, or not
contemplated by, the environmental plan approved by the PNG Government, and in
such event the PNG Government could require the
14
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company to remedy such consequences and the costs of such remediation could be
material. In addition, PNG environmental rules and regulations are still
developing and their impact on mining and processing operations could change.
Future environmental laws and regulations could impose increased capital or
operating costs on the company and could restrict the development or operation
of the Lihir mine. The company has been consulted by the PNG Government in its
development of the new Environment Act for Papua New Guinea. However, no
assurance can be given that any changes will not have an adverse impact on the
Lihir operation. The extent to which unanticipated environmental consequences
or future regulations may affect the company cannot be predicted. See
"Information on the Company – Property, Plant & Equipment — Environmental
Considerations".
Lihir's mining rights may be terminated under PNG law
The Lihir operation is also subject to the provisions of the PNG Mining Act
1992 which governs the granting of mining rights and the conditions upon which
those rights may be terminated. In particular, the company is party to a
mining development contract, dated March 17, 1995, with the PNG Government
which sets forth the terms upon which Lihir may exercise its rights under the
special mining lease which governs the Lihir operation. Under certain limited
circumstances, the PNG Government may terminate the mining development contract
and, therefore, the special mining lease. Any such termination would prohibit
the continued operation of the Lihir mine. See "Additional Information –
Material Contracts – PNG Mining Laws and Related Agreements with PNG
Government".
Lihir is vulnerable to a limited market for the Kina and foreign exchange
controls
The PNG national currency, the Kina, is subject to exchange controls. There is
currently a relatively limited and inefficient market for the Kina and no
assurance can be given that Lihir will be able to convert any Kina funds it has
into other currencies at rates comparable to those at which funds were
initially remitted to PNG or at all. In addition, the PNG Central Banking
(Foreign Exchange and Gold) Regulations require the prior approval of the PNG
central bank to convert funds from Kina into other currencies. While these
regulations also generally require PNG companies to transfer all of their
non-Kina revenues to PNG and convert them into Kina, as is ordinarily the case
with large mining and petroleum projects in PNG, under the mining development
contract the PNG Government has agreed to ensure that the PNG central bank will
grant to the company permission to retain certain of its funds in other
currencies in, and to convert and transfer its Kina funds into, offshore
accounts outside PNG. This permission is limited to certain proceeds from bank
loans, insurance policies and the sale of gold in an amount sufficient to cover
certain specified purposes during the following three month period. As a result
of these limitations, Lihir is still exposed to certain exchange rate
fluctuations and convertibility risks. The Kina has depreciated against the
U.S. dollar in recent years. There can be no assurance that the Kina will not
depreciate further against the U.S. dollar. See "Additional Information –
Exchange Controls".
Lihir is subject to dominance by its initial shareholders and their affiliates
Immediately prior to the consummation of Lihir's global offering of shares in
1995, the outstanding ordinary shares were owned 40% by Southern Gold (which
was owned 75% by Rio Tinto and 25% by Vengold), 30% by Niugini Mining and 30%
by MRL (which is indirectly wholly owned by the PNG Government). As of March
31, 2003 and excluding the shares in the company held by Niugini Mining Limited
as a wholly owned subsidiary of Lihir, the remaining former participants in the
joint venture (or their assignees) collectively owned 262,927,557 (23.0%) of
the outstanding ordinary shares of the company. See "Major Shareholders and
Related Party Transactions – Major Shareholders".
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Accordingly, if the initial shareholders elected to vote in the same manner on
any matter requiring approval of a majority of the outstanding ordinary shares,
such matters are likely to be approved or defeated, as the case may be, by
virtue of the percentage of votes cast by the initial shareholders.
Agreements made by Lihir with Rio Tinto and its affiliate were not subject to
arm's length negotiations
The company has entered into certain agreements with Rio Tinto and its
affiliates, including the management agreement and the Technical Support
Agreement. For a description of these agreements, see "Additional Information
– Material Contracts – Lihir Management". While Lihir believes these
agreements contain terms and conditions at least as favorable to it as those
which might reasonably be expected to be negotiated on an arm's length basis
between unaffiliated third parties, these agreements were not the product of
such a negotiation and no assurance can be given the terms and conditions would
meet such a standard.
Lihir is dependent on Rio Tinto
Following the consummation of the global offering in 1995, the initial
shareholders (who were the participants in the joint venture) have had no
continuing obligation to contribute to, or otherwise to fund, the expenses of
the Lihir operation and the company has been responsible for obtaining and
maintaining its own external sources of funding. Lihir, however, continues to
be highly dependent on Rio Tinto as one of the initial shareholders and certain
of its affiliates in several important respects. Pursuant to the management
agreement, the board of directors has delegated management of most aspects of
the corporate affairs, operations and activities of the company to Lihir
Management Company, an affiliate of Rio Tinto, and for this reason Lihir has no
executive officers or senior management personnel other than a managing
director, chief financial officer, company secretary and public officer.
Certain technical services are provided to the company by Rio Tinto and its
affiliates under the Technical Services Agreement. As a result of these
arrangements, Lihir is dependent upon employees of Lihir Management Company and
Rio Tinto and its affiliates to provide the executive and senior technical
services customarily performed by direct employees of a company. In addition,
it constitutes a review event under the syndicated facility agreement signed on
November 22, 2000 if the Rio Tinto Group disposes of any of the ordinary shares
beneficially held by it or the manager of Lihir ceases to be a wholly-owned
subsidiary of the Rio Tinto Group. See "Additional Information – Material
Contracts -– Financing Agreements– Syndicated Facility Agreement"
Rio Tinto is under no obligation to Lihir to ensure that these conditions
continue to be satisfied, and Lihir has no right to require such compliance by
Rio Tinto.
Lihir is exposed to potential conflicts of interest
Under current PNG law directors have fiduciary duties to all shareholders.
However the representatives of the initial shareholders on the company's board
of directors may have actual or potential conflicts of interest between their
responsibilities to Lihir as a director and their employment obligations to the
initial shareholder that appointed them. Although the directors have advised
the company that they understand their fiduciary duties and the company is not
aware of any intention on their part to contravene such duties, it is
nevertheless possible that such directors could resolve such actual or
potential conflicts in the interests of the initial shareholder that nominated
them instead of in the interests of Lihir and its shareholders as a whole. In
addition, the employees of Rio Tinto and its affiliates who provide executive,
managerial, technical and administrative services to the
16
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company pursuant to the management agreement and technical support agreement
may have similar conflicts of interest in performing such services between
their responsibilities to Lihir and employment obligations to Rio Tinto, and
may resolve such conflicts in the interests of Rio Tinto rather than the
company. In the absence of certain events, the company will not be able to
terminate the management agreement or technical support agreement for 20 years
from signing, and under the management agreement the company has waived its
right to bring any action against Lihir Management, Rio Tinto, Rio Tinto's
subsidiaries or any of their employees or representatives for any losses or
liabilities incurred by the company arising out of the performance or
non-performance by Lihir Management Company of its duties under the management
agreement unless they result from a willful omission or willful misconduct by
Lihir Management Company. Finally, while Lihir does not currently intend to
engage in any exploration or other mining activities outside Lihir Island, it
may elect to do so in the future. Neither Rio Tinto nor any of the initial
shareholders has agreed not to compete with the company in such activities and
this could give rise to circumstances in which the interests of the company, on
the one hand, and Rio Tinto or the initial shareholders, on the other, diverge
or conflict.
Lihir's dividends to U.S. shareholders are subject to withholding tax
There is no tax treaty in effect between the United States and PNG. As a
result, under current PNG law U.S. shareholders will be subject to a 10% (17%
prior to December 31, 2000) withholding tax on any dividends or other
distributions made by Lihir on the ordinary shares. See "Additional
Information – Taxation" for a discussion of the effects of this tax.
Lihir's shareholders are subject to different rights under certain
circumstances
Lihir's corporate affairs are currently governed by its constitution and the
laws of PNG. Principles of law applicable to Lihir and its shareholders may
differ from those that would apply if Lihir were incorporated in a jurisdiction
in the United States. For example, while in most cases shareholder votes are
held by ballot in a manner similar to the practice in the United States, in
certain circumstances shareholder votes can be limited to persons actually
present at a shareholder meeting (either shareholders or representatives of
shareholders) and the quorum for such purposes can be as low as two such
persons. The board of directors also has the ability to refuse to register
transfers of ordinary shares that would breach Australian Stock Exchange (ASX)
rules or contravene laws. In addition, Lihir's shareholders may have fewer or
less well-defined rights under PNG corporate law with which to protect their
interests against actions by its board of directors or major shareholders
(including Lihir's initial shareholders) than they might have as shareholders
of a corporation incorporated in a jurisdiction in the United States.
Difficulty may be experienced in the pursuit of litigation against Lihir's
non-US resident executive officers, directors, or experts
None of Lihir's executive officers or executive directors resides in the United
States. Lihir understands that the general rules in respect of service of
process issued out of US courts requires either:
•
the presence of the person to be served within the jurisdiction of the relevant court; or
•
the consent of that person to receiving service outside the jurisdiction.
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Lihir is not aware that any of the individuals concerned have given consent to
service outside the jurisdiction. Therefore, for a claimant in US courts,
there may be a risk that such persons cannot be served with process.
Certain judgments of certain foreign courts are recognized and enforceable in
Papua New Guinea by registration under the Reciprocal Enforcement of Judgments
Act (Chapter 50 of the PNG Revised Laws). This Act is applied generally on the
basis of reciprocity to prescribed countries and designated courts within those
countries. The United States is a prescribed country under the Act. The
designated courts in the United States are the New York State Court of Appeals
and any Supreme Court of the State of New York. If a foreign money judgment is
not obtained from a designated court, it may nonetheless be recognized and
enforced in Papua New Guinea at common law by commencing a separate action in
the National Court of Papua New Guinea to sue on the judgment.
In the company's prospectus issued in connection with the global offering of
shares in 1995, it was stated that the courts of PNG will not permit original
actions for civil liabilities predicated upon the civil liability provisions of
the US federal securities laws. Lihir has no reason to believe that PNG courts
today would take a different attitude, and allow such actions against the
company or any of its non-US resident executive officers, directors, or experts
the company has named in its registration statement. This should only be a
difficulty for US investors to the extent that an action cannot be brought in
the United States or a judgment of a US court cannot be enforced in PNG.
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Item 4. Information on the Company
See "Certain Definitions" and "Glossary of Certain Technical Terms" at the end
of this annual report for the definitions of certain terms used in this annual
report.
A.     History and Development of the Company
Introduction
Lihir Gold Limited (referred to in this annual report as "Lihir" or the
"company") is a corporation incorporated in 1995 under the laws of Papua New
Guinea (PNG) that owns and operates a gold mining project located on Lihir
Island in the New Ireland province of PNG. Production of gold from oxide ore
commenced in May 1997. In September 1997 the company completed construction of
the processing and related facilities for the Lihir operation and commenced
production of gold from sulfide ore. The registered office of the company is
located at Seventh Floor, Pacific Place, Cnr. Champion Parade and Musgrave
Street, Port Moresby, PNG. The telephone number of the registered office is
+675 321 7711. The company's website is www.lihir.com.pg.
At the Annual General Meeting of the company held on April 28, 1998
shareholders approved registration of the company under the PNG Companies Act
1997 and the company was registered effective May 15, 1998, with the PNG
Companies Act 1997 applying to the company from that date. As part of the
registration process, shareholders at the Annual General Meeting of the company
held on April 28, 1998 adopted a new constitution in replacement of the
Articles of Association and Memorandum of Association of the company. The new
constitution was modelled on the company's then Memorandum of Association and
Articles of Association. See "Additional Information – Memorandum and Articles
of Association" for a summary of the terms of Lihir's constitution.
The initial exploration and development work on the Lihir operation was
conducted by a joint venture beginning in 1982. A subsidiary of Rio Tinto plc,
one of the participants in the joint venture, prepared a feasibility report on
the Lihir operation dated March 1992 and amended in September 1993, October
1994 and May 1995, which was reviewed and audited by Micon International
Limited. In October 1995, the company acquired the assets relating to the
Lihir operation from the joint venture and issued and sold ordinary shares in a
global offering. The joint venture, which undertook almost nine years of test
drilling and numerous geological and other studies on the Lihir operation,
spent a total of US$147 million on exploration and pre-development activities
in relation to the Lihir operation. As of March 31, 2003, excluding the shares
in the company held by Niugini Mining Limited (an original joint venture
participant that is now a wholly owned subsidiary of the company), the former
participants in the joint venture (or their assignees) collectively owned
262,927,557 (23.01%) of the outstanding ordinary shares of the company, as
follows:
Shareholding
Rio Tinto Metals Limited
161,527,406
Rio Tinto Lihir Holdings Ltd
24,230,720
Mineral Resources Lihir Pty Ltd
77,169,431
Orogen Minerals Limited *
—
Total
262,927,557
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•     During 2003, Oregen Minerals Ltd divested their shareholding in the company
No options over the company's shares remain outstanding. See "Major
Shareholders and Related Party Transactions – Major Shareholders – Share
Options".
The assets acquired from the joint venture included the Special Mining Lease,
which gives the company exclusive mining rights within the leased area of Lihir
Island for 40 years. The Lihir operation relates to the mineral deposits
located within the area covered by the Special Mining Lease. The company also
holds the Exploration License, which provides the company with the exclusive
right to explore for gold and other minerals on the remainder of Lihir Island
for a renewable two year period, through to March 31, 2004.
The company is managed by Lihir Management Company Limited, a wholly owned
subsidiary of Rio Tinto, pursuant to a management agreement. Rio Tinto
acquired a managing interest in the joint venture in 1989, and the joint
venture has been managed by a wholly owned subsidiary of Rio Tinto since that
time. Since the consummation of the global offering in 1995, Rio Tinto has
indirectly owned at least 15% of Lihir's issued and outstanding ordinary
shares.
For a summary of certain risks relevant to an investment in the company,
including but not limited to those relating to gold prices and reserve
estimates, see "Key Information — Risk Factors".
Merger with Niugini Mining Limited
On October 6, 1999 Lihir announced its agreement with Niugini Mining Limited,
subject to various conditions, to merge by Scheme of Arrangement under PNG law.
The basis of the merger was set out in the notice of special meeting forwarded
to shareholders on November 27, 1999. On December 15, 1999 Lihir's
shareholders approved the required resolutions to progress the merger. Niugini
Mining shareholders also approved the required resolutions in early January
2000 and final approval from the National Court of Papua New Guinea was
obtained by Niugini Mining on February 1, 2000. The merger was effective on
February 2, 2000.
In accordance with the agreement of both sets of shareholders, the total number
of shares issued to Niugini Mining shareholders was one Lihir share for each
share in Lihir held by Niugini Mining, plus shares in Lihir equal in value to
Niugini Mining Limited's net assets (excluding its investment in Lihir).
Niugini Mining's net assets were US$54.6 million, which resulted in 59,128,489
million Lihir shares being issued. With the one for one consideration for
Niugini Mining's holding of 161,527,405 shares in Lihir, the total number of
shares issued to Niugini Mining shareholders was 220,655,894 shares. As
Niugini Mining had no operations, the shares issued to effect the transaction
were valued based on the fair value of the net assets acquired and transaction
costs of US$1,814 thousand were charged as an expense. The shares in Lihir
held by Niugini Mining were valued at the share price current on February 2,
2000, the date of acquisition.
As a result of the merger, Niugini Mining became a 100% owned subsidiary of
Lihir. Niugini Mining continues to hold 161,527,405 ordinary shares in Lihir
which have been reclassified as "B" class shares.
Capital Expenditures
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The feasibility report for the Lihir project originally estimated that a total
of US$673 million (in mid-1995 dollars) in capital expenditures would be
required for pre-production development and construction of the Lihir
operation, excluding the US$147 million in exploration and pre-development
expenditures made by the joint venture participants prior to the global
offering. This was subsequently re-estimated to be US$780 million (in mid-1996
dollars) when the definitive estimate for construction was completed. This
increase represented a number of changes in scope, particularly in the areas of
financing costs, pit and operations development, and working capital, inflation
and the decision to move to the early processing of oxide ore. The actual cost
of construction was US$792 million, which reflected some further changes to
scope, such as a re-design of the tailings disposal system and accommodation
and other infrastructure.
Capital expenditure over the last four financial years, as discussed in note 12
to the financial statements has been as follows:
US$ millions
2002
2001
2000
1999
Projects
2.9
9.3
1.6
15.0
Mine
13.9
10.3
50.5
17.1
Processing
9.2
17.3
1.4
1.3
Total
26.0
36.9
53.5
33.4
During 1999, capital expenditure included the balance of expenditure on the
second oxygen plant US$11.6 million, geothermal wells US$8.4 million and the
flotation plant US$2.5 million.
During 2000, capital expenditure included US$42.3 million spent on purchase of
the mining fleet from the Thiess-Roche Lihir Joint Venture and US$4.0 million
on further geothermal well expenditure. The balance was attributable to a
number of projects each costing less than US$1 million.
During 2001, capital expenditure included US$12.7 million on the autoclave heat
recovery project, US$5.7 million on geothermal wells, US$4.2 million on 3 new
haul trucks and a dozer to supplement the mining fleet, US$3.4 million on a
twelfth generator, $US 1.1 million on preparatory work for the pebble crusher
project and the balance on a number of projects, each costing less than US$1
million.
During 2002, capital expenditure included US$6.1 million on geothermal wells,
US$4.7 million on the pebble crusher project, US$3.4 million on the progressive
replacement of the mining fleet and US$3.0 million on a pilot 6MW geothermal
power station. These expenditures were funded from operations and are located
on the mine site on Lihir Island in PNG.
For 2003 capital expenditure of US$26.2 million is projected. This estimate
includes US$6.8 million on the progressive replacement of the mining fleet,
further expenditure on geothermal wells estimated at US$2.8 million,
geo-technical scoping studies at an estimated cost of $US2.6 million and
modifications to the CIL circuit of US$1.5 million. These expenditures are
expected to be funded from operations.
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B.     Business Overview
Lihir's operations are limited to a single mine company which produces gold
doré as its sole product. The gold is mined and processed on Lihir Island in
PNG. After refining by Rothschild Australia Pty Ltd and Metals Refining
Operations Limited, the gold is delivered into hedge contracts with selected
hedge counter-parties (predominantly ABN-AMRO, Commonwealth Bank of Australia,
Deutsche Bank, Macquarie Bank, SG Australia, Goldman Sachs and Mitsui) or sold
spot loco London through the international gold market. The gold market is not
generally regarded as being influenced by seasonal factors.
Description of Operations
Overview
The following is a summary of Lihir's current operations. Given the size, scope
and estimated 30 year remaining production life of Lihir, changes in operations
may be made in the future, and these changes could be material. See "Key
Information — Risk Factors" for a discussion of possible risks to Lihir's
operations.
The Lihir operation is based on open pit mining of two adjacent overlapping
pits. Most of the ore is refractory sulfide ore that must be oxidized before
the gold can be leached through cyanidation. Pressure oxidation technology
licensed from Dynatech (formerly Sherritt) is used to treat the refractory ore.
During the period of open pit mining (the "Mining Period") which based on the
current preliminary mine plan is expected to continue for the next 18 years of
gold production to and including 2020, the higher grade ore will be fed
directly into the processing plant and the lower grade stockpile ore will be
stockpiled for processing during the period after open pit mining ceases. The
stockpile processing period (the "Stockpile Processing Period") is expected to
last for a further 15 years to and including 2035. Accordingly, the Lihir
operation is currently expected to have a total remaining operating production
life of 33 years, with open pit mining limited to the next 18 years.
Because the higher grade gold will be processed first, annual gold production
is expected to drop significantly after the mining period. Based on the new
reserve estimates and current preliminary mine plan estimates, production is
expected to be approximately 600,000 ounces in 2003, greater than 650,000 in
the years 2004-2008, approximately 600,000 ounces per year through to and
including 2013, greater than 500,000 ounces through to 2016 and approximately
350,000 ounces per year through the end of mining and stockpile rehandle period
out to and including 2035.
The company is managed by Lihir Management Company pursuant to a management
agreement dated March 17, 1995, between Lihir and Lihir Management Company.
Lihir Management Company is responsible for managing substantially all aspects
of the company's operations, including mine planning, ore grade control,
surveying and managing the mining contractor. See "Additional Information –
Material Contracts – Lihir Management."
All mining operations to April 17, 2000 were provided by the Thiess Roche Lihir
Joint Venture pursuant to a mining services contract dated October 1995. This
mining contract was due to continue to mid 2002 subject to Lihir's rights of
early termination. Following a review of the benefits of operating under the
mining contract compared with Lihir operating the mine itself, Lihir determined
to exercise its rights of early termination. In mid March 2000 Lihir signed a
heads of agreement with the mining contractor pursuant to which Lihir cancelled
the
22
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mining contract effective April 17, 2000 and purchased the mining fleet and
equipment from the mining contractor.
The supply of explosives and charging of blast holes will continue to be
performed on a contract basis by Orica Papua New Guinea Limited which was
nominated by Lihir Management Company and appointed as a sub-contractor under
the original mining contract, pursuant to a contract explosives services
agreement, dated March 14, 1996, between Lihir and the blasting contractor.
Following the termination of the mining contract the blasting contractor is now
contracted directly to Lihir.
Mining
General.
The open pit mine is expected to produce an average of approximately
6.3 million tonnes of ore per year for the remainder of the mining period. Ore
production was 3.8 million tonnes in 1997, 6.9 million tonnes in 1998 and 1999,
10.4 million tonnes in 2000, 7.9 million tones in 2001 and 9.3 million tonnes
in 2002. The production rate is expected to average approximately 8.4 million
tonnes per year from 2003 to 2008 and decline thereafter to an average of 7.2
million tonnes per year from 2009 to 2016 inclusive and 2.7 million tonnes per
year from 2017 to 2020 inclusive. Total annual extraction of ore plus waste
from the pit should range from 35 to 45 million tonnes per year from 2002 to
2010 and decrease rapidly thereafter.
The ultimate pit shell contains approximately 470 million tonnes of material,
of which approximately 120 million tonnes are proven and probable reserves and
350 million tonnes are waste, for an overall waste/ore stripping ratio of 2.9.
Most waste material will be disposed of offshore in deep water.
Mining of sulfide ore commenced in the Minifie area because of its higher grade
and shallower depth, and will be extended over time to encompass the Lienetz
and Coastal deposits. During 2000/2001 most of the mining was from Phase 3 of
the Minifie ore body and during 2002/2003 from Phase 4. Production of ore from
the high grade Phase 5 in the Lienetz ore body is scheduled to start in 2005.
Material moved during 2002, 2001 and 2000 is shown in the table below.
2002
2001
2000
K tonnes
g Au/t
K tonnes
g Au/t
K tonnes
g Au/t
High-Grade Sulphide Ore
4,985
5.20
3,225
6.29
4,241
6.39
Low-Grade Sulphide Ore
4,305
2.31
4,626
2.59
6,084
2.73
Oxide Ore
—
—
—
—
95
2.19
Total Ore
9,290
3.86
7,851
4.11
10,419
4.22
Total Waste
30,723
24,082
25,696
Total Material
40,013
31,933
36,115
Pit Design and Planning.
The ultimate pit design was determined using Whittle
Four D pit optimization software. Optimal shells were derived for a range of
gold prices and grouped into pseudo pit phases. Detailed designs were
developed for all phases out to and including the ultimate pit shell. These
detailed designs were then scheduled using a Rio Tinto developed scheduling
package with cut-off grade optimisation and a bench scheduling package in
Medsystem to undertake detailed scheduling. A 7% discount rate was used in the
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schedules. This procedure was repeated using a range of optimized shells as
the final pit, in order to determine which shell realized the highest net
present value for the project. This shell was then used as the basis for
designing the ultimate pit.
Pit optimization used processing and fixed costs projected at the time. A
processing recovery of approximately 90% was used.
Inter-ramp slope angles ranged from 15o to 26o in soil-strength material, 33o
to 35o in weak rock and 50o in hard rock. In areas that are predominantly
waste, mining is carried out on 12-meter benches. In all other areas, 6-meter
benches are used. The primary excavation fleet consists of three 25 cubic
meter capacity hydraulic shovels. Material haulage utilizes 24 rear dump haul
trucks, each with a capacity of 142 tonnes.
Mining Sequence.
The mining sequence was determined by attempting to maximize
the net present value of the deposit using computer techniques. This resulted
in 12 mining phases with a variable mill feed cut-off grade for direct process
ore for each year of the Mining Period. The initial phase was centered on the
Minifie deposit, with the next three mining phases expanding downwards and
outwards, more or less in a series of concentric shells. A cutback to the
north east corner of Minifie follows and the next three phases develop the
Lienetz and Coastal deposits. The final phases are cutbacks on the east and
the west of the Minifie and the Leinetz ore bodies allowing access to deeper
mineralised zones.
Production Scheduling.
Because of the nature of the ore deposits, it is not
possible to mine only higher-grade material during the mining period. In order
to maximize net present value, the mining and production schedule was
structured to deliver the maximum amount of higher-grade ore to the process
plant as soon as possible, consistent with an orderly mining schedule. In
addition to mining higher ore grade blocks first, a variable mill feed cut-off
grade was established for each year. Ore with a grade equal to or greater than
the applicable annual mill feed cut-off grade is sent directly to the process
plant, while ore with a grade below the cut-off grade (but above the regular
waste/stockpile cut-off grade of 1.7g Au/t) is stockpiled for later processing.
The waste/stockpile cut-off was calculated based on a total cash cost of
US$14.29 per tonne of stockpile ore, selling costs of 2.5%, processing recovery
of 87.5% and a gold price of US$305 per ounce.
The annual mill feed grade is expected to lie in the range 2.7 g Au/t to 6.1 g
Au/t during the mining period, with an overall grade of approximately 4.6 g
Au/t for the entire period. At the end of the mining period, the various
stockpiles are expected to contain approximately 70 million tonnes of material
averaging around 2.4 g Au/t, and this material is expected to sustain
processing operations for a further period of 15 years.
Sulfur Content
While the average sulfur content of the reserves is 5.6%, the
sulfur content is variable. Therefore, significant effort is committed to
controlled blending of plant feed to maximize autoclave throughput. The ore
blend and sulfur target varies depending on ore reactivity, the number of
operating autoclaves (target sulfur for complete oxygen utilization is lower
when three autoclaves are on line), ore settling characteristics and gold
grade. In September 2001 two of three autoclave heat recovery units were
commissioned, with the third commissioned in March 2002. The heat recovery
units have succeeded in making the autoclaves less sensitive to the sulfur
content of the process plant feed.
Low Grade Ore Stockpiles.
All ore grading below the applicable annual mill
feed cut-off grade but above the waste/stockpile cut-off grade of 1.7 g Au/t
will be stockpiled for processing after open pit mining ceases. In addition,
at the request of the PNG Government sulfide ore between 1.6 g/t and 1.7 g/t
will also be stockpiled for the first 6.5 years of production, till the end of
2003. There will be three stockpiles, one of which will be built offshore in
Luise Harbor on a platform of waste rock and two of which will be land-based.
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Waste Rock Disposal.
Because of the lack of suitable land, the potential for
seismic activity, high rainfalls and the potential for acidic run-off, the
company and the PNG Government concluded that land-based disposal of waste rock
was not a viable option and that the preferred option, in terms of cost and
environmental acceptability, was to use some of the waste rock to build the
base of the stockpile in Luise Harbor and to dispose of surplus or unsuitable
material offshore. The waste disposal facility comprises four bottom dump
self-propelled barges and two loading docks of three bays each in a single
wharf structure.
Dewatering and Geothermal Control.
The Lihir mine pit poses unique challenges.
The gold resource is associated with a residual geothermal system and is
located adjacent to the sea. The pit must be dewatered to keep the water table
below the operating level of the mine, for which purpose there are 12 operating
dewatering wells with a capacity of about 700 litres per second. Dewatering
operations successfully maintained dry pit operating conditions throughout
2002, with the base of the Minifie pit now reaching 120 m below sea level.
During 2002, the first four dewatering wells were completed in the Lienetz
area, ahead of commissioning during 2003. These wells are the first installment
of the Lienetz pit dewatering system and will lift anticipate pumped production
to 900l/s, after allowing for decommissioning of two wells in Minifie
While the Luise Caldera, where mining operations take place, is no longer an
active volcanic center, the residual geothermal system must be made safe, by
reducing temperatures and pressures in the vicinity of the pit, in order that
high temperature waters and steam generation do not pose a threat to the safety
of operations.
Since 1999, 10 deep wells ( greater than 1000m depth ) and 18 shallow wells
(400-600m) have been completed. Steam discharge has now been continuous since
2000, with wells in the west Minifie and North Lienetz areas operating during
this period. Five newly drilled (2002- Q1 2003) wells in the North West
Lienetz area will be commissioned in early 2003 and will increase steam
discharge levels ahead of the development of the Lienetz pit
Power generation using geothermal steam has been demonstrated to be a viable
option for Lihir.
In early 2002, a 6Mw pilot plant was approved for construction, and was
commissioned in April 2003. This plant is fed on steam from the shallow steam
relief wells already completed as part of the mining development.
Well testing to determine steam production capacity from the larger Ladolam
steam resource indicates an ultimate power generating potential in excess of
30Mw. A feasibility study for the stage 2 development of a larger power
station (nominally 30Mw) is at an advanced stage and is exepcted be completed
in the first half of 2003
Information gathered from the recent programs indicates that less geothermal
drilling will be needed for mining control than was predicted in the
Feasibility Study.
Mine Drainage.
The average annual rainfall at the Lihir Project site is
approximately 3,700 millimeters, with a maximum-recorded one-hour intensity of
65 millimeters. For this reason, considerable attention has been paid to the
design of appropriate facilities for mine drainage. This includes a system of
surface diversion ditches designed to intercept storm water flows before they
enter the open pit. A system of in-pit collection ditches and sumps has also
been incorporated into the design of each of the phases of pit development.
Despite these design provisions, however, mine production has to be suspended
during periods of intense rainfall.
Mining Equipment.
The major mining equipment selected for the Lihir Project
has been sized for the levels of production contemplated by the current life of
mine plan. Most of the mining fleet was purchased from the mining contractor
on April 17, 2000 on termination of contract mining and movement to owner
mining. The transition from operator mining owner mining to owner mining was
smooth with the majority or the contractor equipment and staff transferring to
LMC at this time. In the ensuing period the mining fleet complemented by the
purchase of three additional haul trucks has met the requirements of the
operation.
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Processing
General.
The company's processing plant is on an area known as Putput, at the
mouth of Luise Harbour. Lihir ore is termed refractory, meaning that
conventional extraction of gold by cyanidation is not viable without
pre-treatment. The Lihir process plant incorporates a pressure oxidation
pre-treatment step using autoclaves to release the gold. This in turn is
followed by conventional cyanidation.
The plant's facilities first crush and grind the ore into a slurry suitable for
pressure oxidation. A small flotation plant is used to concentrate a portion
of the slurry as required to optimise the autoclave process. The ore is then
subjected to pressure oxidation, counter-current decantation (CCD),
neutralization, carbon-in-leach (CIL), and tailings disposal. Gold is
recovered from the CIL process through carbon stripping, electrowinning and
smelting.
The processing plant was initially designed to treat 375 tonnes of ore per hour
at a design sulfur grade of 7.2%. A design autoclave operating time of 89% of
total time was used resulting in a plant capacity of 2.9 million tonnes per
year. The processing plant was upgraded in 1999 to include a second oxygen
plant and a small flotation plant. Three autoclave heat recovery vessels,
used to pre-heat autoclave feed were installed in 2001 along with a 12th power
generator. In 2002 a pebble crusher was installed in the grinding circuit to
increase grinding capacity. Over 3.8 million tonnes of ore was processed
through the plant in 2002 to produce 607,088 ounces of gold.
Crushing.
Run-of-mine stockpiling and primary crushing facilities,
incorporating a gyratory crusher, are located at the Ladolam Creek area,
approximately 500 meters east of the ore bodies. All other processing
facilities are located at Putput, approximately one kilometre southeast of the
Ladolam Creek area. Soft ore bypasses the gyratory crusher and is processed
separately through a toothed-roll crusher. A series of conveyors transport the
crushed ore to a stockpile of approximately 36,000 tonnes capacity located at
the Putput processing plant.
Stockpiling and Blending.
Ore is reclaimed from the stockpile via under pile
feeders and conveyed into the semi-autogenous grinding (SAG) mill. Soft ore
that does not flow freely through the under pile feeders is reclaimed by front
end loader and fed through a separate feeder.
Grinding and Thickening.
Water is added and steel balls and the ore itself
grind the ore down to a fine particle size in the SAG mill. Coarse pebbles
rejected from the SAG mill are conveyed and crushed separately in the pebble
crushing circuit before returning to the SAG mill feed stream. SAG mill
discharge slurry is pumped to cyclone classifiers that separate coarse from
fine particles. Coarse material is directed into a ball mill for further
grinding before reclassification, whilst fine material continues on to a
thickener. In the thickener, water is recovered and flocculent is used to
assist the settling of solids. Thickened slurry is pumped to the pressure
oxidation circuit.
Pressure Oxidation.
The Lihir pressure oxidation circuit utilizes Dynatech
(formerly Sherritt) patented technology and is typical of pressure oxidation
autoclave circuits used to treat refractory gold ores elsewhere in the world.
Feed slurry is first pre-heated to 80 deg C in heat recovery vessels before
being pumped under high pressure into three horizontal, six compartment
autoclave vessels. Inside the autoclave, slurry is subjected to an operating
pressure of 2,400 kPa and a temperature of 200 — 210 deg C. Pure oxygen added
into the autoclaves causes rapid oxidation of sulfide minerals, and consequent
release of gold particles, to occur. Autoclave discharge slurry is
depressurized into a flash vessel where temperature and pressure are reduced to
atmospheric conditions. Resultant steam produced in the flash vessels is used
to pre-heat autoclave feed in direct contact heat recovery vessels. Carbon
dioxide, nitrogen and residual oxygen is vented from the autoclaves into the
atmosphere.
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High pressure gaseous oxygen for the pressure oxidization process is provided
via two cryogenic oxygen plants located adjacent to the processing plant.
Liquid oxygen is also produced and stored for backup and emergency
requirements.
CCD Washing and Neutralization.
Oxidised slurry then passes through a
two-stage CCD thickener circuit where it is washed with process water and sea
water. Slurry acidity is then further neutralized by the addition of
milk-of-lime, which is prepared from imported quicklime in a slaking circuit.
In this way, slurry pH level is increased to an appropriate level for cyanide
leaching. Dilution water is added to reduce slurry viscosity in preparation
for CIL processing
CIL Processing.
Gold is recovered from the oxidised and neutralised slurry in
a Carbon-In-Leach (CIL) circuit. The circuit consists of several large,
agitated tanks. In the first tank, sodium cyanide is added to the slurry to
begin leaching gold into solution. Coarse, granular carbon is added to
subsequent tanks to adsorb dissolved gold. Agitation ensures that the slurry,
cyanide and carbon are well mixed and suspended so that all gold containing
particles are leached and adsorbed onto carbon. Slurry flow progresses through
the tanks whilst carbon, retained by screens, is pumped in a counter-current
direction and progressively loads with adsorbed gold
Tailings Disposal.
Plant tailings are first treated to detoxify remaining free
cyanide through the mixing of a portion of the iron-bearing wash solution from
the CCD circuit with CIL circuit tailings. This results in the complexation of
free cyanide with iron. The balance of the CCD wash liquor is combined with
power plant and oxygen plant cooling water streams before combining with the
detoxified tailings stream.
The combined streams are subsequently discharged into the ocean via a pipeline
at a depth of 128 meters, which is below the mixed layer of the ocean. The
surface mixed layer, which is the uppermost layer of the ocean that is
constantly mixed by wind and wave action, varies with location and time, with a
maximum depth of 98 meters being recorded to date at Lihir. Being denser than
the receiving seawater, tailings discharged below the surface mixed layer move
down the steep submarine slope and will not rise to the surface. See
"Environmental Considerations" below for a discussion of this method of
tailings disposal and its possible environmental impacts.
Gold Recovery.
Loaded carbon is recovered from the CIL circuit and stripped of
gold by means of the continuous Anglo-American Research Laboratories elution
system. This involves soaking gold-loaded carbon in a hot caustic / cyanide
solution, causing gold to release from carbon back into solution, and then
rinsing the carbon with hot demineralised water. Stripped carbon is then
regenerated by heating in an atmosphere of steam, before being returned to the
CIL circuit.
Gold bearing solution from the elution process is circulated through
electrowinning cells where gold is recovered from solution through
electro-plating to produce a gold sludge. Finally, the sludge is dried and
smelted in a furnace to produce doré bars. The gold recovery facility has been
designed to treat up to 20 tonnes per day of loaded carbon.
The overall ore treatment process is designed to recover between 88%-94% of
contained gold, depending on ore source. Overall plant recovery for 2002 was
90%.
Lower grade ores from the mine have been stockpiled for future processing.
Weathering and natural oxidation of stockpiled ores has the potential to
inhibit autoclave throughput by reducing the grade of sulfide sulfur in the
ore. To mitigate this effect, a number of measures have been taken:
•
Stockpiles have been covered with plastic to reduce the rate of
oxidation.
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•
The heat recovery circuit commissioned in the third quarter of 2001
enables the pressure oxidation circuit to treat a lower grade of sulfide
sulfur in ore feed.
•
The pilot flotation plant provides the opportunity to increase the
sulfide sulfur grade of stockpile ore if required.
Limestone Deposits.
The original project design incorporated a lime plant
treating local limestone. While tests of the local limestone confirmed its
chemical suitability, it was also indicated that the limestone may prove too
friable for calcining in conventional shaft or rotary lime kilns. As a result
the processing plant utilises commercial quicklime imported in 20 tonne
containers.
Infrastructure
Little or no infrastructure existed on Lihir Island prior to the commencement
of activity by the company and development of the Lihir operation required a
significant program of infrastructure construction. Besides the processing
plant and barge loading facilities for waste rock disposal, infrastructure now
includes a main administration office, an analytical/environmental laboratory,
a training building, a warehouse, a plant maintenance facility and emergency
facilities and a power plant consisting of twelve diesel generators, each of
6.3 megawatts. Infrastructure for the workforce includes housing and related
community facilities such as a school, medical center, supermarkets, an open
market and a police station. A wharf has been constructed at Putput for
general cargo ships and tankers. A new airstrip and terminal facilities have
been constructed on the northern portion of the island. The existing road
connecting the airstrip and the project site has been improved and the ring
road around the island completed.
Fresh water is required in the processing plant and in the grinding circuit to
reduce the chloride content of the ore. Potable water is also required. The
nearest available source of water in sufficient quantity is the Londolovit
River, where a weir and storage area have been constructed. While the company
had sufficient water through six months of drought conditions in 1997, it was
necessary during that time to supplement the water from the Londolovit river
with water from streams closer to the process plant. Construction of a dam on
Lakunbut Creek to provide additional water storage may be required for future
drought conditions or for the additional water demand that would result from
increased throughput of ore in the process plant. Lihir is currently
evaluating the construction of this dam.
Communications at the site, within the island and with the outside world, are
vital and have been improved through the installation of a satellite link
providing public access to the national telephone network. Marine and
aeronautical radio systems are installed.
Workforce
At December 2002, total employment was 978 employees.
Of this number 37% are
Lihirian, 54% other Papua New Guinean nationals and 9% expatriates from various
countries. The company employed and trained 45 apprentices at the end of 2002,
having recruited an additional 15 apprentices throughout the year. Numerous
training programs were conducted over the year for both new and existing
employees ranging from mine equipment operation and licensing to process plant
operation and general and technical skills training.
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Table of Contents
Community Affairs
In 1995 Lihir negotiated a comprehensive set of compensation agreements with
the people of Lihir, known as the Integrated Benefits Package (IBP). A
significant part of Lihir's community affairs efforts is directed towards
ensuring compliance not only with these commitments but also the spirit of the
undertakings in the light of changing circumstances. Additionally, the
community affairs section has an overall focus on maintaining and strengthening
the best possible relationship with the Lihirian community by developing an
understanding of Lihir's operations in the community and engendering trust
through an open, honest and transparent consultation process.
The IBP of agreements is now seven years old and the original concept of a mine
has materialized into a fully functioning operation. In June 2001 the local
community, Lihir, the PNG National, Provincial and Local Level Governments
commenced a full review of the Integrated Benefits Package of agreements to
assess how they might be improved to serve the various parties better in the
future. The review process is expected to be completed by mid 2003.
The Lihir Group is made up of four islands with a total population (as at 27
March 2003) of approximately 12,577 persons, approximately 9,363 of whom live
on Lihir Island.
The Lihir Group is two hours' travel by motorized boat from either New Ireland,
Tanga or Tabar islands. Because of this relative geographic isolation, the
Lihir Group community is fairly self-contained and does not experience any
large immigration, which is common in other parts of PNG and which can make
determination of land ownership extremely difficult. The people of the Lihir
Group share a common language and the same clan structure, factors which
assisted in the conduct of the compensation negotiations.
The Integrated Benefits Package includes a compensation agreement and a
relocation agreement which were signed on April 26, 1995, by Lihir Management
Company (initially on behalf of the joint venture but with an acknowledgment
that they will subsequently be on behalf of the company) and by various groups
of landowners and residents on Lihir Island from areas required by the company
for the mine and associated facilities. The Compensation Agreement and
Relocation Agreement satisfied the requirements of the PNG Mining Act for
compensation arrangements to be in place before mining commences.
The compensation agreement provides for compensation to be paid to the
landowners for cleared, damaged or otherwise affected land, or land possession
of which they will lose as a result of the Lihir operation, for loss of
economic plants, for loss of man-made structures, for loss of marine resources
and wildlife, for discoloration or other adverse effects on creek water and
seawater, for disturbance of burial grounds and sacred sites and for other
miscellaneous effects of the Lihir operation. Additional compensation has been
and as required will continue to be paid to landowners in the Ladolam pit area
for land possession of which they will lose as a result of the Lihir operation.
In addition, the compensation agreement provides that the PNG Government has
assigned to, and the landowners will be paid royalties per cubic meter for
sand, gravel and coronous material excavated from their land.
The relocation agreement provided for the relocation of residents of the mine
pit and plant site areas to other parts of Lihir Island. To facilitate this,
Lihir Management Company agreed to construct or provide materials for 84
relocation homes to relocate approximately 180 people from the proposed site
for the processing plant and to pay allowances to the residents to assist them
to re-establish themselves and their families in the new locations. The
majority of these relocation homes have now been completed, with the remaining
homes to be phased in over the ensuing five years as the present generation of
adolescents come of age. Future generations of the relocatees will be assisted
through a trust fund which was established on March 17, 1995 when the Special
Mining Lease was
29
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granted. Various community facilities have also been constructed or relocated
and several local businesses have been relocated or compensation has been paid.
A further relocation agreement between Lihir Management Company, some residents
of Kapit Village, landowners of that area and the local landowner association
was entered into in July 1995. This is similar to the Relocation Agreement and
provides for 35 relocation houses and the establishment of trusts for the
long-term benefit of landowners, residents and their children. Twenty of the
houses have been constructed and the trust has been established by the company.
Both the compensation agreement and the relocation agreement provide for the
establishment of trusts for the long term benefit of landowners and residents
and their children and contain acknowledgments by the landowners and residents
that these agreements properly and adequately provide for their compensation
(statutory and otherwise) and that they waive any rights to bring action or
suit for further compensation in respect of matters covered by the compensation
and relocation agreements.
In addition, two memoranda of agreement were signed on April 26, 1995 by the
landowners association and the local development authority for the Lihir Group,
one with the PNG Government and the other with the New Ireland Provincial
Government. A third memorandum of agreement was signed on March 17, 1995
between the PNG Government and the New Ireland Provincial Government.
Collectively, they provide for the sharing of the royalties payable by the
company under the Mining Act, the grant of the option to the Lihirian company
to purchase one-half of the ordinary shares owned by the PNG Government (MRL)
immediately prior to the consummation of the global offering, the provision of
government infrastructure and services on Lihir Island, the maintenance of law
and order, the provision and use of special support grants, training of
Lihirians and business development.
The company continues to examine ways of promoting self-help and
self-determination rather than have the community develop into a cycle of
corporate dependence. The company works closely with the Lihir Mining Area
Landowners Association (LMALA) and, through the IBP review is currently
developing a new five-year sustainable development plan to promote community
development through self-help. The Lihirian people are a proud community and
have historically been extremely self-sufficient due to their geographical
isolation. Lihir's community leaders are aware of the impacts large
development can have on traditional lifestyles and are working with the company
to ensure that the many benefits resulting from the mine lead to a long term
social enhancement.
Having addressed the accommodation and compensation aspirations of Lihirians in
those areas directly affected by the mine, attention is focused on the needs of
other Lihirian people.
Under the Integrated Benefits Package, the company has made substantial annual
compensation and other payments to landowners and other Lihirians as shown in
the table below.
2002
2001
2000
1999
1998
Kina millions
26.5
18.1
12.0
8.6
3.3
US$ millions equivalent
6.6
5.0
4.0
3.2
2.1
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Even though the company has put significant effort into addressing landowner
issues, the company cannot guarantee that disputes will not disrupt operations
in the future. See "Risk Factors".
Business Development
- LGL provides direct support for business development to
the local community through its business development office, or BDO. BDO is
supporting the local business community to develop realistic, sustainable
commercial opportunities. BDO assistance to local businesses included the
development of business plans, managerial advice, preparation and lodgment of
VAT, group tax and company returns, secretarial support and business training.
More than 120 small businesses operate on Lihir, most of which have received
some form of assistance from BDO.
BDO continues to provide advice and assistance to local businesses to ensure
compliance with the Companies Act and Business Group Registration Act.
Many local businesses continue to benefit from LGL by providing goods and
services to the Lihir project. During 2002 more than 72 million Kina (US$18
million) worth of contracts and casual work went to local businesses. Local
business development creates employment and generally contributes to the local
economy.
BDO also has an established agriculture section that provides technical
assistance to local farmers in vegetable farming, chicken farming, and
piggeries.
Education Assistance —
In 2003, LMC will continue to assist Lihirian students
through a range of programmes. Funding has already been distributed to 68
individuals and 34 local schools under the Lihirian Education Assistance
Programme. In addition, 34 full scholarships for tertiary study will be
provided, including up to 12 weeks industrial training on site.
Health and Safety
The company is committed to promoting the health and safety of its employees
and the neighbouring community through effective management practices. Health
and safety improvements are sustained by the setting and review of targets,
assessing and reporting of safety performance and adoption of best available
practices for the conditions in which the company operates.
Two important measures of Lihir's safety management efforts are the lost time
injury frequency rate (LTIFR) and the lost time injury severity rate (LTISR).
A "lost time injury" results when an employee or contactor cannot return to
their normal duties the following shift. Between 1998 and 2002 the company
LTIFR was 0.41, 0.34, 0.35, 0.46 and 0.30 respectively, per 200,000 hours
worked. The LTISR has reduced from a peak of 5.27 in December 1999 to 1.30 in
December 2002. In 2000 Lihir recorded and investigated 78 reported incidents,
in 2002 this increased to 293 reported incidents. Lihir believes that this is a
positive indicator that our safety awareness programs are working and both our
employees and contractors understand the importance of reporting an incident
and/or near miss when they see it.
A site safety plan was developed in 2001, to address the high-risk areas
identified through various audits conducted on site. That plan will continue in
2003 with 14 projects being run concurrently with implementation by the end of
the year. Other initiatives have included the introduction of a safety
newsletter, contractor safety meetings, improved training programs and the
expansion of our Job Safety Observation and Take 5 programs. All these
initiatives continue to raise awareness of safety and our safety management
system. Our aim is to
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consolidate and realize the gains from earlier efforts and to change the
behaviour of our workforce and contractors. Lihir was audited by NOSA in 2002,
and achieved a safety effort rating of 78.8%, and awarded another star making
it a 4 star site.
Community Health
- An important benefit provided to the Lihirian community is
better health care. Currently the company provides medical services to
employees, contractors and their dependents as well as to the local people
through the Lihir medical center at Londolovit, which offers outpatient,
inpatient and preventative health care services. The medical center also
provides support through the provision of drugs and services to all the
government and mission run health facilities throughout the Lihir group of
islands.
Through the medical center the company continues to target malaria and other
parasitic infections through the vector control program, or VCP, which is
regularly audited by a consulting entomologist. The VCP has seen admission to
the medical center due to malaria drop in the last three years from 22% of the
population in 1998 to 10% in 2001. The VCP has been largely concentrated
within villages close to the mining development resulting in reductions in the
percentage of persons infected with malaria in those areas from as high as 50%
to less than 10%.
Management
General
Lihir Management Company, a wholly-owned subsidiary of Rio Tinto, manages the
company and the Lihir operation pursuant to the management agreement between
the company and Lihir Management Company, the terms of which are discussed in
detail below. The managing director of Lihir Management Company is also the
managing director of the company and reports directly to the company's board of
directors. As a consequence of the management agreement, Lihir has no
executive officers or senior management personnel who are not also executive
officers or senior management personnel of Lihir Management Company.
Mining Contractor
The feasibility report contemplated that the bulk of mining operations would be
carried out by contractors during the entire mining period but that this would
be reviewed prior to the end of the then current contracts. In October 1995
the company entered into a mining contract under which the mining contractor
(the Thiess-Roche Lihir Joint Venture) was responsible for stripping and
preparing the mine site, drilling, preparing blast holes, extracting, loading
and hauling ore and waste, establishing stockpiles, in-pit dewatering, slope
control and operating the waste rock barge fleet. In June 1999 the mining
contract was varied so that the mining contractor reduced the unit rates for
the works. This provided a yearly saving to the company of approximately 9%,
equivalent to approximately US$6 million per year.
Following a review of the benefits of contract as compared with Lihir operating
the mine itself, Lihir determined to exercise its rights of early termination
under the mining contract and signed a heads of agreement with the mining
contractor on March 17, 2000 whereby the company cancelled the mining contract
effective April 17, 2000 and purchased the mining fleet and equipment from the
mining contractor. The capital cost of the acquisition of the mining fleet and
associated equipment, spares and stock from the mining contractor was US$42.3
million. Under the heads of agreement the final contractual payments to the
mining contractor upon the termination of the mining contract were also agreed.
These payments included a lump sum amount of US$7.7 million which encompassed
both the payment due under the termination formula contained in the mining
contract
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and a sum to settle remaining contractual claims by the mining contractor.
This termination fee was expensed in 2000.
Lihir Management Company is now responsible for managing the work previously
undertaken by the mining contractor. In addition, Lihir Management Company is
responsible for providing mine staff and engineering personnel, mine planning
and slope design, slope erosion protection, definition drilling, ore control
and sampling and groundwater and geothermal control.
Blasting Contractor
On March 14, 1996, the company entered into a Contract Explosives Services
Agreement with Orica Papua New Guinea Ltd to supply explosive services for the
Lihir operation through to June 30, 2002. The Agreement was immediately
assigned as a nominated subcontract to the mining contractor. The awarding of
the contract followed testing by the successful contractor and the contractor
being able to demonstrate to the company that its specially compounded emulsion
explosives are suitable for the high rock temperatures and reactive soils that
characterize the Lihir mine. As a sub-contractor of the mining contractor
nominated by the company, the blasting contractor is required to procure,
transport and store all explosive products; manufacture and deliver explosives
into blast holes; prime, tie-in and initiate the blasting; and provide all
facilities for manufacture and storage, including warehouses, magazines, labour
and supervision. The blasting contractor is provided with fuel, power and
potable water by Lihir.
At times blasting at Lihir is carried out under unusual conditions of high
blast hole temperatures. The sulfide-bearing rock is both wet and reactive
with nitrate based compounds. Special explosives are required to deal with
these conditions and the blasting contractor manufactures these explosives at
the site.
In June 1999 the Contract Explosives Services Agreement was amended providing a
substantial reduction in the explosive pricing due to modifications in the
product and the use of alternative raw material suppliers. The savings to
Lihir amount to US$1.5 million per year. In return the term of this agreement
was extended to the earlier of March 31, 2009 or the completion of mining. The
amended agreement now contains a re-price review on a two yearly basis that
will take into account factors such as technical improvements, site factors,
and genuine competitive options available to Lihir.
Following termination of the mining contract on April 17, 2000, the blasting
contractor is now contracted directly to Lihir.
In December 2002, Lihir renegotiated the purchase price of bulk explosives from
the blasting contractor, taking advantage of Rio Tinto group purchasing and
bulk buying power. The net result was cost neutral with higher operational
flexibility and productivity.
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C.     Organization and Structure
Lihir is classified by Rio Tinto as a principal associate, rather than as a
subsidiary. Rio Tinto holds 16.26% of Lihir's shares.
As a result of the merger effected on February 2, 2000, Niugini Mining Limited
is a 100% owned subsidiary of Lihir. Niugini Mining is registered in Papua New
Guinea. It has no continuing operations. Niugini Mining is the sole
subsidiary of Lihir Gold.
Niugini Mining Australia (Pty) Limited is a 100% owned subsidiary of Niugini
Mining Limited and is registered in Australia. Niugini Mining Australia (Pty)
Limited has no current operations but refer to Note 21 to the financial
statements in regard to contingent liabilities. Niugini Mining Australia (Pty)
Limited is the sole subsidiary of Niugini Mining Limited.
D.     Property, Plant and Equipment
Lihir Island
Lihir Island is the largest of the Lihir Group of four islands. It is located
approximately 700 kilometers northeast of the PNG capital of Port Moresby. The
Lihir Group forms part of the province of New Ireland.
Lihir Island is a volcanic seamount that rises steeply from sea level to about
600 meters above sea level. It is approximately oval in shape, roughly 22
kilometers long from north to south and 14.5 kilometers from east to west at
its widest points. There is a caldera from what is believed to be a no longer
active volcano (the "Luise Caldera") which adjoins a harbor (the "Luise
Harbor") on the east coast of the island. All of the known ore deposits of the
Lihir operation are located in the Luise Caldera. An airport capable of
handling larger aircraft and a port capable of handling 10,000 tonne ships and
40,000 tonne tankers have been constructed as part of the Lihir operation.
Lihir Island experiences a high level of rainfall, averaging about 3,700
millimeters per year, and has an annual mean relative humidity of about 80%.
The temperature generally varies between 20ºC and 30ºC (68ºF and 86ºF). Lihir
Island is north of the area most affected by cyclones. Natural vegetation is
mostly rain forest.
Prior to the development of the Lihir operation, Lihir Island was largely
undeveloped. Subsistence agriculture was the principal occupation of most
Lihirians, supplemented by some cash crops such as copra.
Geology
Lihir Island is made up of five Miocene-Pleistocene volcanic units, of which
three are recognizable volcanic craters (including the Luise Caldera) and two
are sequences of mafic volcanic rock that predate the three volcanoes. The
volcano that formed the Luise Caldera was the youngest major volcanic event on
the island. It was formed in the Pleistocene age, less than one million years
ago. Remnant geothermal activity is present in the Luise Caldera, evidenced by
hot springs and fumaroles. Studies of groundwater circulation suggest there is
no magma present below the Luise Caldera.
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The Luise Caldera is a well-defined, elliptically shaped caldera, which rises
steeply to several peaks over 600 meters above sea level. The caldera is open
to the northeast where it is breached by the sea to form Luise Harbor. Luise
Caldera measures approximately 5.5 kilometers by 3.5 kilometers. Currently
defined gold mineralization occurs within an area of about 2.0 by 1.5
kilometers near the center of the caldera.
Exploration work since 1983 has defined several adjacent and partly overlapping
mineral deposits in the Luise Caldera, the principal ones being Lienetz,
Minifie, Coastal, Borefields and Kapit. Of these, the largest is Minifie,
which is about 1,000 by 600 meters with mineralization extending from the
surface (50 meters above sea level) to 250 meters below sea level. The Lienetz
deposit north of Minifie is about 800 by 400 meters, and extends from the
surface (140 meters above sea level) to 300 meters below sea level. The smaller
Coastal deposit adjoins Lienetz on the northeast, separating it from the sea.
The Borefields zone extends to the north-east along the Minifie structure and
is an extension of the Minifie mineralization. The Kapit deposit, extending
300 to 400 meters north of Lienetz, is about 800 by 500 meters with
mineralisation extending from near surface to 400m below sea level. Drilling in
2002 extended the limits of Lienetz to the North West, confirmed physical
connection between Lienetz and Kapit and extended the current knowledge of the
Kapit deposit. Kapit remains as yet incompletely explored and the extent of
economic extraction could be limited by high temperature and depth.
The bulk of the known gold mineralization is located in Minifie and Lienetz.
All of the deposits are connected by areas of low-grade mineralization. An
analysis of the structural patterns has led to the hypothesis that the Lienetz,
Coastal and Kapit areas are part of a single mineralization system, with a
separate feeder system accounting for the Minifie and Borefields
mineralization. A single final pit will be the ultimate outcome, however.
Based on exploration work to date, gold appears to be the only metal of
economic significance present within the Luise Caldera. Gold occurs primarily
as sub-micron size particles in sulfide minerals. Sulfide content is
relatively high, with the average sulfur grade of the reserves being 6.15%.
The main sulfide material is pyrite, with the marcasite form present as an
accessory mineral. Arsenopyrite is rare. Free gold is rare and located
predominantly at the fringes of the known deposits. Oxidation layers range in
thickness from minimal in low lying areas such as Minifie to a maximum of 70
meters over the higher parts of Lienetz and Coastal and Kapit.
The mineral deposits in the Luise Caldera are hosted by volcanics, intrusives
and breccias, and there has been extensive alteration of these rocks within the
caldera. Two major alteration episodes have been identified, an earlier and
deeper "porphyry style" event resulting in potassic alteration grading
laterally to propylitic alteration and a later and higher level epithermal
event producing argillic, advanced argillic and phyllic alteration. Because
the intensive alteration has destroyed much of the original host rock
lithology, the deposits have been classified into a series of "ore types" based
on alteration, hardness, degree of brecciation and similar factors. While this
is more a metallurgical classification than a geologic one, it has proved
useful in determining many of the mining and processing characteristics of the
orebody and host rocks. The ore types are roughly sub-horizontal and form a
fairly consistent vertical sequence. The general sequence is that of clay-rich
rock, grading into white mica-felspar rock, then felspar-biotite and, at depth,
into felspar-biotite-anhydrite. Within and on the boundaries of the ore types,
geological structure is also a major influence in the localization of higher
grades in the orebody.
Reserves Estimates
The previously reported reserve estimates included in the 2001 Form 20F
included proven and probable gold reserves of 15.1 million contained ounces at
a US$300 per ounce price assumption, based on 120.8 million tonnes of ore with
an average grade per tonne of 3.90 grammes.
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During 2002, an intensive resource definition and extension drilling program
continued at Lihir, with substantial additional drilling and assaying data
becoming available since the completion of the previous resource estimate in
December 2001.
New drill results available to October 2002 included 41000m of diamond drilling
the western sector of Lienetz (69 holes), east Lienetz/ Coastal (33 holes) ,
west Minifie (10 holes ) and in Kapit (10 holes).
Assaying and geology information from these holes was included in a major
review of Lihir's resource model completed in December 2001. The new model
reflects the identified new mineralized extensions to the Lienetz and Kapit ore
zones discovered during 2002, and a comprehensive review of mineralisation
controls in these areas.
Subsequent to the completion of the resource re-estimate, and a full review of
mining and processing costs, a re optimization of the mine design and the life
of mine schedule was completed and a revised reserve estimate prepared in
December 2002.
The ore reserves in the table below are based on the new resource model at a
US$305 per ounce gold price assumption (1.7 g Au/t cutoff) adjusted to take
account of mining depletion and reconciliation changes to December 31, 2002.
Average
Contained
Reserve
Tonnes
grade
Ounces
Category
(In millions)
(g Au/t)
(millions)
Unmined Ore
Proven
6.0
4.01
0.8
Probable
111.2
3.79
13.5
Stockpiled Ore
Proven
25.8
2.86
2.4
Total Reserves
143.0
3.63
16.7
Reserves have been prepared in accordance with Industry Guide 7 under the
United States Securities Act of 1933 and the following definitions:
The term "reserves" means that part of a mineral deposit that can be
economically and legally extracted or produced at the time of the reserves
determination.
The term "economically", as used in the definition of reserves, implies that
profitable extraction or production under defined investment assumptions has
been established or analytically demonstrated. The assumptions made must be
reasonable, including assumptions concerning the prices and costs that will
prevail during the life of the project.
The term "legally", as used in the definition of reserves, does not imply that
all permits needed for mining and processing have been obtained or that other
legal issues have been completely resolved. However, for reserves to exist,
there should not be any significant uncertainty concerning issuance of these
permits or resolution of legal issues.
The term "proven reserves" means reserves for which (a) quantity is computed
from dimensions revealed in outcrops, trenches, workings or drill holes; grade
and/or quality are computed from the results of detailed
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sampling; and (b) the sites for inspection, sampling and measurement are spaced
so closely and the geologic character is so well defined that size, shape,
depth and mineral content of reserves are well established.
The term "probable reserves" means reserves for which quantity and grade and/or
quality are computed from information similar to that used for proven reserves,
but the sites for inspection, sampling and measurement are farther apart or are
otherwise less adequately spaced. The degree of assurance, although lower than
that for proven reserves, is high enough to assume continuity between points of
observation.
Reserve tonnages were depleted during 2002 by mining activity. Reserves quoted
are those remaining below the mining surface at December 31, 2002, within a
revised ultimate pit design, based on the October 2002 revised resource model.
Stockpiled ore comprises mined ore above cut-off grade on the stockpiles, as of
December 31, 2002.
Cutoff grade for reserve calculations is fixed at 1.6g Au/t for the first 6.5
years of mining operations (until end 2003), increasing to 1.7g Au/t for the
remaining mine life. The initial lower cut-off is required under the Mining
Development Contract with the state of PNG.
The reserves reflect an assumed gold price of US$305 per ounce. The number of
ounces of contained gold does not indicate the number of ounces that ultimately
will be recovered. The number of ounces ultimately recovered and available for
sale will depend upon, among other things, mining efficiency and processing
efficiency. The current estimate is for an eventual recovery of 14.9 million
ounces of gold from the 16.7 million contained ounces.
While Lihir believes that US$305 is an appropriate gold price to use to
estimate its reserves, the company has estimated that, if the assumed long-term
gold price was reduced to US$285 per ounce, its proved and probable gold
reserves would reduced to 14.2 million ounces. Conversely, a metal price of
US$325 per ounce would increase the reserve to 17.7m ounces of contained gold.
As of May 31, 2003, the spot price for gold was approximately US$361 per ounce.
At the end of 2002 the company had a total of 2,180,101 ounces of gold hedged
at an average price of US$330 per ounce. If there is a further deterioration
in the long term gold price, net earnings and the carrying value of mine
properties would be adversely impacted.
The PNG Government froze the phasing out of the Mining Levy in the budget in
December 2002. Positive discussions are underway with the Government to review
this decision. Should the Government decide to retain the level proposed in
the budget for the life of the operation, it would reduce reserves by 1.9
million ounces. This reduction is not included in the 2002 reserves update.
Mining Rights
Lihir holds the Special Mining Lease which gives the exclusive right to mine
and produce gold from the area of the Luise Caldera, including the site of the
processing plant on Putput Point. The Special Mining Lease is governed by the
Mining Development Contract. The Special Mining Lease can be terminated only if
the Mining Development Contract is properly terminated. For a discussion of
applicable PNG mining laws and the specific terms and conditions of the Special
Mining Lease, Exploration License and Mining Development Contract, see
"Additional Information – Material Contracts – PNG Mining Laws and Related
Agreements with PNG Government".
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Under the PNG Mining Act 1992, a developer may apply for a lease for mining
purposes, or LMP, to cover ancillary areas required to support a mining
operation. A mining lease is required for any quarrying operations outside the
Special Mining Lease. Lihir has been granted two leases for mining purposes,
one which covers the accommodation and commercial center, the Londolovit
reservoir and the Lakunbut dam and the other which covers the airstrip. The
company has also been granted two mining leases for a hard rock quarry and
limestone quarry. These leases are joined by three mining easements that
provide corridors for road access and power line and water supply.
The Special Mining Lease covers 1,739 hectares and includes the Luise Caldera,
Luise Harbor and part of Putput Point. As such, it covers the ore bodies,
processing plant, stockpiles and marine facilities. The LMP for the
accommodation and commercial center covers 644 hectares in the Londolovit area
and the LMP for the airstrip covers 34 hectares. The mining lease for the
limestone quarry covers 48.2 hectares while the mining lease for the hard rock
quarry covers 23.7 hectares.
Exploration
The area covered by the Special Mining Lease continues to have significant
potential for increasing reserves.
During 2002 drilling within the Luise Caldera was undertaken within the planned
pit and on a number of extension targets. 122 diamond holes for 40,910 metres
were completed. Targets drilled were western Lienetz and Kapit zones, the
western flank of Minifie, and the Lienetz /Coastal area.
Drilling in the Lienetz area was targeted to extend known resources in this
deposit. Step out drilling in NW Lienetz was successful in locating extensions
of 'boiling zone' mineralisation and in the discovery of new feeder zones
outside of the previous resource, which resulted in extensions of the economic
pit on this flank of the deposit.
Drilling results available to end October 2002 were included in a re-estimate
of resources completed in December 2002. In December 2002, a full review of the
mining and processing costs was carried out, which together with the revised
resource estimate was used to re-optimize and design the mine pit and life of
mine schedule, resulting in an increase of remaining reserves by 15% to 16.7
Moz.
The revised mine design has extended the mine design crest in the NW Lienetz
area by 200m. Increases to reserve tonnage also occurred within the previous
reserve pit through the discovery of lateral extensions to the previously known
resource.
Substantial mid depth resource outside of the revised pit (and restated
reserves) was identified in 2001 adjacent to the coastal seawall pillar in
northern Lienetz. Additional holes drilled in 2002 confirmed this
mineralisation, though this resource has yet to be evaluated in engineering
studies. These planned studies will determine what proportion may be
recoverable to reserves through extension of the mine design and construction
of sea retaining structures.
Development drilling of the Lienetz ore body is still progressing in order to
define the limits to the west and north of the deposit, which remain open.
Further significant extensions of mineralisation were located during 2002
linking Lienetz and Kapit, as well as high-grade extensions to the Kapit
mineralisation. These two areas have been targeted for extensive drill
definition and mine feasibility studies during 2003, to determine their
availability for inclusion as additional reserves for the project
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Drilling is also progressing in the West Minifie area, with 10 holes completed
in 2002 around the current pit limits. Results have been moderate only, but
require close out with additional holes scheduled for late 2003.
Five diamond drill rigs are currently active in infill and development drilling
in these areas, with drilling activities scheduled to continue throughout 2003
The area outside the Special Mining Lease, covered by Exploration Licence No
485 (EL485) is considered prospective for gold mineralization. EL 485 is
current until April 2004 when it will be available for renewed for a further 2
year period.
The exploration program on the lease involves mapping, stream sediment sampling
and weathered bedrock sampling using Wacker percussion drilling. Field
exploration during 2002 within EL485 concentrated on the Lamboar area on the
western side of the island. As at this reporting date, assay results for the
2002 program are yet to be received from the Australian based laboratory where
they are being analysed.
A total of 1387 geochemistry samples have been submitted from the program,
including; 774 wacker drill bedrock samples, 390 channel cut samples, 29 BLEG
samples, 4 rock chip samples, 95 panned concentrate samples and 95 stream
sediment samples. Late in 2002, work commenced in the adjacent Samo area,
where efforts will focus in 2003.
Environmental Considerations
Overview
Lihir considers that excellence in managing its environmental responsibilities
is not only inherently worthwhile but also essential to its long-term success.
The company operates in accordance with an environmental plan approved by the
PNG Government and works closely with the government in implementing all
statutory monitoring and reporting as specified in its environmental monitoring
and management program, or EMMP, and all water use permits in operation for the
site. The EMMP details the regular monitoring which is undertaken by Lihir at
over 50 locations around the Lihir island group for over 50 environmental
parameters. All results from environmental monitoring are reported to the
government and landowners on a quarterly basis.
During 2000 the EMMP was thoroughly revised and updated to reflect the current
operating conditions of the mine as well as to take into account all the
monitoring and research activities initiated by the company. The company has
also been consulted by the PNG Government in its development of the new
Environment Act for Papua New Guinea. The Environment Act was passed by
Parliament in December 2000 and combines the three previous acts relating to
environmental legislation into one act. The company are now actively
consulting and cooperating fully with the government in the development of the
new regulations which support the Environment Act which are expected to be
completed in 2002/03.
Lihir has independent environmental consultants report on its environmental
compliance. In addition, the Government carry out their own independent
monitoring for elements contained in the EMMP to confirm LMC's results. The
Statement of Compliance issued by the Government in 2001 states that "The
Department of Environment and Conservation is satisfied with the environmental
performance of the Company and is happy to
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state that Lihir Gold Limited has met, and continues to meet, all conditions of
its environmental monitoring programs, and that the impacts of its operation
are well within what was originally predicted in the Environmental Plan". In
addition to external consultant audits, the company complies with stringent
corporate reporting requirements through Rio Tinto.
In addition to the statutory environmental compliance monitoring and reporting
through the EMMP, the company undertakes studies to improve understanding of
the environmental consequences of the operation. Currently the company is
involved in research projects with CSIRO Division of Marine Science, James Cook
University, Australian Institute of Marine Science, Deakin University and NSR
Environmental Consultants. As part of these ongoing research projects, three
students are working towards Ph.D. degrees. While the company's monitoring and
research projects are continuing, results from the investigations suggest that
the level of contaminants and impacts originating from the company's activities
are less than originally predicted. In line with the predictions made in the
environmental plan, sedimentation on the fringing coral reef system peaked
during the construction phase of the project due to increased disturbance from
pre-mine clearing and road construction. During operations reef sedimentation
has decreased significantly to be much lower than forecast and, at many
locations, is now approaching levels similar to that measured during the
baseline studies before construction commenced.
LMC have completed a pre-certification audit of its Environmental Management
System against ISO14001 standards during 2002 by QAS (Quality Assurance
Services) in Australia and are expecting a full compliance audit in 2003.
Environmental Plan
Kennecott, with the assistance of NSR Environmental Consultants Pty Ltd.,
carried out extensive environmental baseline studies of the Lihir Islands and
the Lihirian community during exploration. These baseline studies were
followed by an environmental impact assessment of the Lihir operation, which
highlighted key environmental issues considered during project planning in an
attempt to minimize project-related environmental impacts. The environmental
impact assessment determined that the sensitive environmental variables most
likely to be impacted by the project included: the loss of nesting habitat for
megapodes (a local fowl valued for its eggs), sago and other economic tree
removal, diversion and alteration of stream habitat, and the effects of
sedimentation on the shallow and deep water marine environment around Luise
Harbor. Each of these impacts are summarized below; however, in summary,
ongoing environmental monitoring performed by the company (and independently by
the PNG Government) reveals that impacts to date are less than that anticipated
in the project's environmental plan.
Following its environmental impact assessment the environmental plan was
prepared by NSR on behalf of the joint venture and submitted to the State in
accordance with Section 4(6) of the PNG Environmental Planning Act. The
environmental plan was subsequently approved by the State. The environmental
plan describes the proposed development, existing environment, anticipated
impacts and proposed safeguards, and EMMP for the construction and operational
phases of the mines development.
In the Mining Development Contract, the company has agreed to comply in all
material respects with its environmental plan. The environmental plan may be
varied either by the company, with State approval, or by the PNG Minister for
Environment and Conservation if there is a material danger to public health and
safety or if the conduct of normal operations in accordance with the
environmental plan poses an environmental impact either not contemplated or
different than contemplated in the environmental plan or if substantially
better environmental control technology becomes available.
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Land and Habitat Impacts
The major land and habitat impacts associated with the Lihir operation are the
alteration of land use in and around the mine and plant site areas from natural
environment to mining lands and the loss of habitat types important to local
inhabitants. However, a compensation package was negotiated and accepted among
the company, the State and landowners that addresses these environmental
impacts, including the loss of megapode nesting habitat and economically
valuable vegetation, diversion and alteration of stream habitat and impacts by
sedimentation on the water quality of the shallow and deep water marine
environment around Luise Harbor, among other land use issues.
Geothermal areas of the Luise Caldera are important nesting grounds for a
sub-species of megapode. This sub-species is not unique to the Lihir Group of
islands and is genetically and morphologically similar to the populations found
on other nearby islands. It is important to Lihir Island primarily because the
local inhabitants use its eggs as a food source. Though significant areas of
nesting habitat in the caldera area have been lost, detailed surveys in 1997
-2001 found that nesting burrow numbers have significantly increased in
undisturbed areas and also that new nesting areas have been colonized. This is
attributed to a reduction in the predation pressure on the megapodes by the
local community in response to increased standard of living with less reliance
on traditional food resources afforded by the mine development.
Similarly, repeat post-baseline surveys of sago resources along the east and
north-east coast of Lihir Island show that while some sago areas have been lost
to road and infrastructure construction, the overall numbers of sago have
increased. As with megapodes, this is believed to be the result of a reduction
in the requirement for traditional food and building resources since the
establishment of the mine.
Waste Rock and Marine Impacts
Given the potential for acid generation from certain waste rock types,
permanent submarine disposal is Lihir's preferred method for long-term
prevention of sulfide oxidation and subsequent acid generation. In addition,
the lack of available land for terrestrial disposal also supports the marine
placement of waste rock. The major impacts of the deep-water waste rock
disposal are increased turbidity in the water column within and beyond Luise
Harbor (which declines along the north and south coast) and smothering of deep
seafloor benthos.
The increased turbidity from the barge dumping and storm-water runoff from
disturbed areas also results in the sedimentation of the narrow fringing reef
along the east coast of Lihir Island. Impact assessments have taken into
account the cumulative effects of turbid storm-water as well as ocean
sedimentation from turbidity created by these sources of sediment. The
diversity of coral species and fish in these areas is likely to be reduced as a
result of this sedimentation.
While near-shore coral reef sedimentation was predicted to be a major impact in
the project's environmental plan, monitoring data to date suggest that habitat
loss for deep marine benthos is the greater impact. While turbidity levels in
within Luise Harbor have increased, monitoring data suggest that there are
natural controls on the amount of the sediment from the turbid harbor plumes
which cause coral reef sedimentation.
In 2002 the company voluntarily commenced a program to further improve its
management of water, sediment and ARD leachate from stockpile drainage entering
the ocean. The 3 year program is expected to cost approximately US$5 million.
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Following the cessation of waste rock disposal, coral and deep-sea benthos
habitat recovery is expected to occur. Deep sea monitoring of tailing and
waste rock deposition zones has already indicated recolonisation of deep sea
benthos into mine impacted areas. The installation of sediment retention dams
and the planned re-engineering of silt curtains are of continuing benefit in
this regard and the company is actively involved in attempting to further
reduce near-shore sedimentation where applicable. The environmental
consultants to the project, NSR, estimated in April 1992 that, based on
experience at other coral reef systems, recovery can be expected after about 25
years. This opinion has been expressed taking into account the good substrate
conditions existing and the predominant presence of fast growing acroporan
corals.
Stream Impacts
Effects relating to pumping of water from the Londolovit River have been
specifically addressed by the preparation of a management plan for the lower
reaches of that river (the Lower Londolovit River Management Plan). This
included the construction of a barrage to maintain river levels and reduce the
intrusion of salt water up the Londolovit River and provision for water release
from the pump weir in order to maintain minimum base flow requirements and
thereby minimize any ecological effects on the lower reaches of the Londolovit
River and its floodplain. To date, the systems in place have adequately
achieved their objectives.
Stockpile Drainage
The environmental plan suggested that drainage from the low grade ore
stockpiles may cause low pH runoff and elevated levels of iron, copper,
arsenic, zinc, aluminum, manganese, cadmium, lead and, possibly, mercury and
chromium. NSR predicted that the chemical effects of mine drainage waters
(including stockpile drainage) on Luise Harbor are expected to be subordinate
to the turbidity (sediment) and thermal effects, although they recognize that
it was not possible to predict the expected water quality with great certainty.
Nevertheless, the company has installed stockpile covers to reduce the
generation of low pH, high dissolved metal leachate from the stockpile area.
The discharge of low pH run-off water from other areas is mitigated prior to
entering the ocean by dilution with large amounts of water from the pit
dewatering bore field which has a high alkalinity and therefore buffers of acid
leachate run-off and the company are currently evaluating further treatment
options to assist in leachate mitigation.
The company monitors the quality of run-off water entering the sea and, to
date, the range in data obtained is not significantly different in terms of
acid compared to baseline values emanating from the geothermal areas through
which the water drains before entering the ocean. If environmental impacts are
greater than currently estimated, the State has the right to impose additional
water quality control measures. The potential costs of implementing such
additional control measures cannot be estimated at the present time, but in the
opinion of both Micon and the company they should not be so large as to impair
the economic viability of the Lihir operation.
Tailings Disposal
The reliance of the Lihirian communities on coastal lands means that a
land-based tailings storage facility would need to be situated in the interior
mountainous area of the island. Given the seismic conditions, the rugged
topography, high rainfall and potential for acid generation, the cost and risks
to the environment and people of constructing a stable land storage facility
there for tailings were considered prohibitive. In addition, due to the net
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rainfall surplus, storage of tailings on Lihir Island was not likely to be
possible without long term treatment of the
effluent run-off water from the land storage facility, the residues from which
could also require land-based storage. For these reasons, the company and the
PNG Government concluded that submarine disposal of tailings was appropriate
for the Lihir operation.
Tailings are discharged underwater at a depth of 128 meters through a 1.2 meter
diameter steel-cased high density polyethylene (HDPE) pipeline. The discharge
depth was chosen following extensive field-work on the structure and currents
of the ocean in the vicinity of the outfall leading to the development of a
predictive model of tailing behavior once discharged. The discharge point at
128 m is below the mix layer depth, the euphotic (biologically active) zone and
where the density of the receiving ocean water precludes the tailings being
resuspended back into the surface water. The tailing is a combined stream of
approximately 5% solids and a mixture of fresh and salt process water and
saltwater used in the cooling of the power and oxygen plants. The water
quality around the area of the outfall is monitored on a regular basis to
ensure that concentrations of metals and cyanide species are not above PNG
water quality criteria for protection of marine ecosystems. Monitoring data to
date show that, at all times, water quality at marine compliance locations have
been below the prescribed standards.
In addition, the company (in consultation with the PNG Government, CSIRO Centre
for Advanced Analytical Chemistry, NSR, Ocean Sciences Institute and Underwater
Video Systems) has carried out extensive validation studies of the behavior of
the tailing once it leaves the end of the pipe and is discharged to the ocean.
These studies have shown that the tailings travel down the steep submarine
slope after discharge from the end of the pipe as a consolidated turbidity
current and settle out on the ocean floor. Only small amounts of the main
turbidity flow break off to form sub-surface plumes below 150 m and no
re-suspension to waters above 128 m was observed.
Submarine disposal of tailings is only appropriate under certain geographical
and physical conditions including suitable ocean currents, absence of
upwelling, steep slopes and deep surrounding ocean, all of which occur at
Lihir. It is or has been practiced at 9 locations around the world and is
being investigated at a further 22 mineral prospects. According to information
published by the U.S. Bureau of Mines in October 1993, there is no known
juxtaposition of potentially economic mineralization and suitable oceanic
conditions within the contiguous mainland states of the United States which
would make submarine disposal of mine tailing a viable consideration. The
international concern regarding marine tailings disposal is based on the
perception that it could lead to major metal contamination. Most mining project
tailings solids are stored in engineered containments, but, as noted above,
land based storage is not deemed feasible on Lihir Island. Marine benthic
species colonizing stabilized waste rock or tailings deposits may be exposed to
elevated metals concentrations in the sediments. Tissue metal enrichment may
then occur and may be transferred to predatory fish. The degree to which this
will occur cannot be predicted with certainty but a monitoring program has been
put into place to evaluate this possibility. Ongoing monitoring by the company
and external consultants of both benthic invertebrates and shallow and deep
water fish show no elevation of metals in test organisms. There is no
exploitation of deep water fisheries for subsistence or commercial purposes in
the area of Lihir Island.
At least 90% of the residual cyanide contained in CIL tailings is detoxified by
reaction with iron prior to disposal. Cyanide detoxification is achieved by
controlled mixing of iron-rich CCD liquor with CIL effluent to complex the free
cyanide. A mixing tank allows sufficient retention time for the reactions to
proceed and the tailings disposal is managed to ensure State water quality
standards are met. No other treatment of tailings prior to disposal takes
place at the Lihir operation.
Risk analyses were performed by Parametrix Inc. in 1993 and 1995 with respect
to residual free cyanide and copper discharge with the tailings and the CCD
wash liquors, and it was found that neither posed a risk to human health or
safety. Copper could be toxic to some marine organisms (assuming similarity to
U.S. species used in laboratory toxicity tests) at depths greater than 150
meters within the mixing zone, and could be toxic to some
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zooplankton and
bivalves beyond the mixing zone, if such organisms were to be resident at these
depths. Even if bioavailable, copper will not biomagnify within the food
chain. It was concluded that fish in the area would be safe to eat by local
people, other fish and wildlife.
Parametrix Inc concluded in a report dated February 1995 that a contaminant
pathway between the people of Lihir Island and the deep ocean benthos is
unlikely based on the available human dietary information, the feeding habits
of the only deep ocean organisms consumed by the islanders, and the absence of
a commercial deep ocean fishery within the vicinity of the disposal site. The
smothering of the sea floor and the benthos that live there could cause fish
(if any) at depth to leave the area of tailings disposal in search of food.
However, fish are expected to avoid this area in any event during the
operations phase due to the increased turbidity of the water. In Micon's view,
these impacts, even in the worst case, will be temporary and limited to the
area of tailings disposal, and only deep-water organisms are expected to be
affected. As a result, compensation or other actions are not anticipated.
Upon completion of tailings disposal, the impact of smothering will be reduced
or cease. It is expected that eventually benthos will return to the area of
tailings disposal and, as the food source returns, so too will its predators.
Upon completion of tailings disposal activities, most impacts to the
environment are expected to cease. There may be the potential for
bioaccumulation of metals within the marine ecosystem over time. The potential
for bioaccumulation of metals (if any) was not assessed in the environmental
plan. The company has initiated a program of monitoring the metal content
benthic sediments, sea-grass, fish and shellfish. This monitoring program is
expected to provide an early indication of increases in metal content in the
upper food chain, and if a significant increase in metal content develops,
mitigation strategies and compensation will be considered.
A spill of untreated and undiluted tailings close to the ocean could have a
severe environmental impact and significant clean up costs. Due to the
sediment load and chemical composition of the pre-diluted tailings and the
waste water streams, any uncontrolled spill is likely to pose a threat to the
aquatic life in the shallow waters in the area of the spill. The magnitude and
extent of the environmental impact of an accidental spill will depend upon the
composition of the waste stream and the total volume released. If an
accidental spill occurs, the major cost involved would be the clean up of
tailings on land or dredging of any tailings which entered the harbor and which
would be amenable to clean up. Equipment and materials are likely to be
available on site for such a clean up and the major cost would be labor.
However, to safeguard against such a hazard the company has adopted Micon's
recommendation of installing secondary containment of the land section of the
tailings discharge line.
Liability for seepage, pollution or contamination from a spill of untreated and
undiluted tailings should be covered by the third party insurance policy
arranged by the company if it is a "sudden, unintended and unexpected
happening"; provided, however
,
that the insured amount under the policy is
limited to US$250 million for any one occurrence. See "Insurance" below.
Rehabilitation and Decommissioning
The approval of the environmental plan required the company to undertake
rehabilitation on a progressive basis. As with all environmental monitoring
reporting requirements, rehabilitation activities are reported to the State on
a quarterly basis.
The company has also prepared a conceptual mine closure plan, or CMCP, which
details the company's options with respect to mine closure as well as assigning
costs associated with various closure options. These costs will be accrued
during the operation of the project to ensure that adequate financial resources
are available for closure and decommissioning at the cessation of mining. The
various closure options identified in the CMCP will be reviewed over a
five-year period to address such issues as a final void study of the pit as
well as allowing for
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comprehensive community consultation. This will be
developed by the end of 2004. The major areas of concern with regard to
rehabilitation at closure are the open pit area, and low-grade ore platform and
stockpiles, which may be acid-generating. Closure costs are estimated at
approximately US$27 million undiscounted for the various options identified.
Seismic Considerations
Lihir Island is located in a region of moderate seismic activity. However,
because regions of intense seismic activity occur approximately 90 and 200
kilometers to the south, a seismic hazard study was undertaken by Dames & Moore
commencing in 1987 in co-operation with Kennecott geotechnical staff. This
study was updated in February 1992 , and a further review undertaken in 2000 .
To evaluate the seismic environment of Lihir Island, an examination was
undertaken of the regional earthquake setting of PNG and the Solomon Islands.
A mathematical model was developed to estimate the probability and
characteristics of earthquakes at Lihir Island. This model has subsequently
been modified and updated to incorporate the more than 1,640 earthquakes of
magnitude 5 or greater which have occurred within 200 km of the site since the
original 1987 study was completed.
The results of the seismic hazard study were used to develop earthquake design
criteria for structural design and earth pressures for retaining wall design,
liquefaction assessments, dynamic slope stability and assessment of tsunami
threat and extreme ocean water levels. These earthquake design criteria were
adopted for design purposes throughout the Lihir operation. The reviewed study
(2000) substantially confirms the suitability of the original criteria, and has
been adopted as the basis of all ongoing structural design at Lihir.
No seismic events causing significant damage or extended disruption to
operations has been experienced to date.
Insurance
Lihir's previous material damage and business interruption and combined
liability insurance policies were replaced effective July 1, 2000 with new
coverage obtained under the Rio Tinto Group Risk Management program.
Substantial savings in premia and improvements in insured terms were achieved.
In addition to these policies, the company has arranged insurance covering
marine terminal operator's liability; charterer's liability; medical
malpractice; employee dishonesty and crime; airport operator liability; and
workers compensation liability.
A submission for exemption from the normal onshore placement rules was approved
by the Papua New Guinea Insurance Commissioner in July 2000.
While the company has obtained, and pays for, political risk insurance in favor
of its lenders covering 100% of the borrowings under the syndicated facility
agreement and is required by that agreement to maintain such insurance policies
as a condition to, and for the full term of, those borrowings, the company does
not receive any benefit from any payments under such policies because in the
event of any such payment the insurers will become subrogated to the rights of
the banks against the company in respect of that payment. No political risk
insurance has been, or is currently proposed to be, arranged for the benefit of
the company. See "Additional Information – Material Contracts — Financing
Agreements".
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Security
Security service contracts were re-tendered and won by Niolam Security and Task
Security. The security of the gold room was taken back under direct LMC
control. Security provision continue to encompass the mine site, commercial
area, camps and housing estate, plant and airport areas.
The company has supported the establishment by the community on Lihir of a
Peace and Good Order Committee. This committee has liaised closely with the
PNG Police Force. Several initiatives on Community Policing such as education
campaigns on illicit drugs, alcohol abuse and domestic violence have been
initiated. Police numbers on Lihir have also increased during the year at
the request of the Committee. A resident magistrate has also been stationed on
Lihir allowing for the hearing of criminal and civil matters without long
delays.
Project security provisions encompass the plant, mine site, commercial area,
housing estate, camps, hospital, airport and infrastructure. Two joint venture
companies, Securimax Islands and Task Security provide fully equipped contract
security personnel. These personnel are managed by Lihir Management Company
security supervisors, who report to the Occupational Health Safety & Security
Superintendent.
A police station and cell block were completed and handed over to the Royal PNG
Constabulary in late 1997. The company also provides government housing and
other support to the Lihir police contingent. External police support can be
mobilised from Kavieng or Rabaul if and when required. A reserve police force
consisting of volunteers has also been established on Lihir Island, under the
control of the local Royal PNG Constabulary on Lihir Island, providing further
assistance as and when required.
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Item 5. Operating and Financial Review and Prospects
A. Operating Results
Introduction
This section provides an analysis of Lihir's business and compares its 2002
financial results with those of the previous two years. It should be read in
conjunction with the audited consolidated financial statements and related
notes at Item 18 of this report.
The basis of preparation of the financial statements is set out in Note 1 of
the financial statements. These accounting policies vary in certain important
respects from the accounting principles generally accepted in the United States
(US GAAP). The material differences affecting the profit and loss account and
shareholders' equity between generally accepted accounting principles followed
by Lihir and those generally accepted in the US are summarized in Note 29 of
the financial statements.
Critical Accounting Policies
The preparation of Lihir's financial statements in accordance with generally
accepted accounting principles, is based on management estimates and
assumptions, which may have a material impact on the carrying values of assets
and liabilities recorded and their impact on the income statement. Some of
the more significant issues requiring the use of management estimates and
assumptions include estimates of proven and probable ore reserves, rate of gold
recovery, future gold price assumptions and environmental, reclamation and
closure costs. Such estimates and assumptions will have an impact on:
•
carrying value of Lihir's non-current assets (IAS 36 "Impairment of
Assets" and IAS 4 "Depreciation Accounting")
Mine properties
Mine properties represent the accumulation of all development expenditures
incurred by or on behalf of the Group in relation to areas of interest in
which mining of a mineral resource has commenced.
When future economic benefits are established by further development
expenditure in respect of a mine property after the commencement of
production, such expenditure is carried forward as part of the cost of that
mine property. Otherwise such expenditure is classified as part of the
cost of production.
Amortisation of costs is provided for using the units-of-production method,
separate calculations being made for each mineral resource. The
units-of-production basis results in an amortisation charge proportional to
the depletion of estimated recoverable gold ounces contained in proved and
probable ore reserves.
Where a change in estimated recoverable gold ounces contained in proved and
probable ore reserves is made, depreciation and amortisation of mine
properties is accounted for prospectively in the period of change and
future periods.
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Mine buildings, plant and equipment:
The cost of each item of buildings, machinery and equipment is depreciated
over its expected useful life. For the majority of assets this is
accomplished using the units-of-production method based on estimated
recoverable gold ounces contained in proved and probable ore reserves,
although some assets are depreciated using a percentage based on time. Each
item's economic life has due regard to both physical life limitations and
to present assessments of economically recoverable reserves of the mine
property (where appropriate) and to possible future variations in those
assessments. Estimates of remaining useful lives are made on a regular
basis for all assets, with annual reassessments for major items.
The total net carrying values of mine building, plant and equipment at each
mine property are reviewed regularly and, to the extent to which these
values exceed their recoverable amounts, that excess is fully provided
against in the financial year in which this is determined.
Remaining mine life
In estimating the remaining life of the mine for the purpose of
amortisation and depreciation calculations, due regard is given, not only
to the amount of remaining recoverable gold ounces contained in proved and
probable ore reserves, but also to limitations which could arise from the
potential for changes in technology, demand, product substitution and other
issues which are inherently difficult to estimate over a lengthy time
frame.
Impairment of assets
Impairments of assets are recognised whenever the carrying amount of an
asset exceeds its recoverable value. The recoverable amount is measured as
the higher of net selling price and value in use. Value in use for
individual assets is calculated by discounting future cash flows using a
risk adjusted pre-tax discount rate.
•
non-current liabilities (IAS 37 "Provisions, Contingent Liabilities and
Contingent Assets")
Restoration, rehabilitation and environmental expenditure
In accordance with IAS 37 "Provisions, Contingent Liabilities and
Contingent Assets", a provision is raised for anticipated expenditure to be
made on restoration and rehabilitation to be undertaken after mine closure.
These costs include the costs of dismantling and demolition of
infrastructure or decommissioning, the removal of residual material and the
remediation of disturbed areas. The provision is only raised in respect of
damage incurred up to balance date. The amount of any provision recognised
is the full amount that has been estimated based on current costs to be
required to settle present obligations, discounted using a pre-tax
risk-free interest rate of 2.5%. Estimates of future costs are reassessed
annually.
A corresponding asset, which represents future economic benefits, is raised
and subsequently amortised using the units of production method.
The Company's restoration, rehabilitation and environmental expenditure
policy identifies the environmental, social and engineering issues to be
considered and the procedures to be followed when providing for costs
associated with the site closure. Site rehabilitation and closure involves
the dismantling
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and demolition of infrastructure not intended for
subsequent community use, the removal of residual materials and the
remediation of disturbed areas. Community requirements and long-term land
use objectives are also taken into account.
•
inventory valuation (IAS 2 "Inventories")
Inventories
Inventories of ore and metal are physically measured or estimated and
valued at the lower of cost and net realisable value.
Cost comprises direct material, direct labour and transportation
expenditure in getting such inventories to their existing location and
condition, together with an appropriate portion of fixed and variable
overhead expenditure and depreciation and amortisation, based on weighted
average costs incurred during the period in which such inventories are
produced. Net realisable value is the amount estimated to be obtained from
sale of the item of inventory in the normal course of business, less any
anticipated costs to be incurred prior to its sale.
Inventories of consumable supplies and spare parts expected to be used in
production are valued at the lower of weighted average cost, which includes
the cost of purchase as well as transportation and statutory charges, and
net realisable value.
•
deferred tax position (IAS 12 "Income Taxes")
Income tax
Tax effect accounting procedures are followed using the liability method
for all temporary differences arising between the tax bases of assets and
liabilities and their carrying values for financial reporting purposes.
Income tax on temporary differences is set aside to the deferred tax
liability and deferred tax asset accounts at current enacted tax rates.
Deferred tax assets relating to deductible temporary differences and tax
losses are only carried forward as an asset to the extent that it is
probable that future taxable profit will be available against which the
deductible temporary differences and tax losses can be utilised.
•
Derivative financial instruments (IAS 39 "Financial Instruments:
Recognition and Measurement")
Accounting for derivative financial instruments and hedging activities
Derivative financial instruments are initially recognised in the balance
sheet at cost and are subsequently remeasured at their fair values. On the
date a derivative contract is entered into, the Group designates the
contract as a hedge against specific future production. The method of
recognising the resulting gain or loss is dependent on the nature of the
item being hedged.
Changes in the fair value of derivatives that are designated against future
production, qualify as cash flow hedges and are deemed highly effective,
are recognised in equity. Amounts deferred in equity are transferred to
the income statement and classified as revenue in the same periods during
which the hedged gold sales affect the income statement.
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Certain derivative instruments do not qualify for hedge accounting under
the specific rules in IAS 39. Changes in the fair value of any derivative
instruments that do not qualify for hedge accounting under IAS 39 are
recognised immediately in the income statement.
When a hedging instrument expires or is sold, or when a hedge no longer
meets the criteria for hedge accounting under IAS 39, any cumulative gain
or loss existing in equity at that time remains in equity and is recognised
when the committed or forecasted production is ultimately recognised in the
income statement.
However, if the committed or forecasted production is no longer expected to
occur, the cumulative gain or loss reported in equity is immediately
transferred to the income statement.
Although management reviews key estimates and assumptions on an ongoing basis,
no assurance can be given that the indicated amount of gold will be recovered
or at the rates estimated. Gold reserve estimates are expressions of judgment
based on knowledge, experience and industry practice, and may require revision
based on actual production experience. Estimates that are valid estimates when
made may change significantly when new information becomes available. Such
estimates are necessarily imprecise and depend to some extent on statistical
inferences, which may prove unreliable.
The following sections provide an overview of Lihir's results, financial
results of operations, impairment provisions, foreign currency fluctuations and
the impact of recently issued accounting standards. For discussion on Lihir's
reserves see "Information on the Company – Property, Plant and Equipment –
Reserves Estimates".
Overview
Lihir made a profit from ordinary activities before tax of US$70 million
compared with a profit of US$43 million and a loss of US$99 million in 2001 and
2000 respectively. Excluding the impairment of mine properties and deferred
mining costs as noted below, Lihir's before tax profit would have been US$32
million compared with US$43 million and US$22 million in 2001 and 2000
respectively. The 2000 impairment loss of US$99 million against mine
properties and deferred mining costs (under IAS 36) was based on a gold price
assumption of US$300 per ounce and a real discount rate of 6%. The subsequent
reversal in 2003 of US$38m was based on a gold price assumption of US$305 per
ounce and a real discount rate of 7%. These transactions were non-cash in
nature.
US$ millions
2002
2001
2000
Sales
          revenue
213
233
227
Profit
          / (loss) from ordinary activities before taxation
70
43
(99
)
Impairment
          of mine properties and deferred mining costs
(38
)
—
121
Earnings
          before impairment
32
43
22
Earnings Before Impairment is profit from ordinary activities before taxation,
less impairments of mining properties and deferred mining costs recognised. We
believe that Earnings Before Impairments provides a meaningful comparative
measure of earnings that many financial analysts and investors find
50
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useful in
making comparisons between reporting periods. It is not to be confused as an
alternative to earnings as determined under US GAAP or International Accounting
Standards.
Financial Results of Operations
Sales
Lihir's revenues are determined primarily by the amount of gold it produces and
the prices it is able to realize upon sale of the gold. The company's realized
gold prices are determined primarily by the market price for gold and the terms
of any hedging transactions into which it enters.
2002
2001
2000
Gold sales
Ounces 000
593
648
612
Average gold price realized*
US$/ounce
356
355
379
*
Excluding the revaluation of financial instruments
Gold Prices
- There are many producers of gold worldwide and gold bullion can
be readily sold in numerous markets throughout the world. It is not difficult
to ascertain a market price for gold at any particular time. The company's
revenues are significantly influenced by the world market price for gold.
Historically, gold prices have fluctuated widely. In 2002 the company's
realized price per ounce was US$356 per ounce compared to US$355 and US$379 per
ounce in 2001 and 2000 respectively. Gold prices are affected by numerous
industry and macro-economic factors beyond the company's control, including
sales by central banks, the worldwide forces of supply and demand, inflation,
currency and interest rates and political and economic conditions. Gold prices
are also affected by worldwide gold production levels, which have increased in
recent years. In addition, the price of gold has on occasion been subject to
very rapid short-term changes because of speculative activities. See "Key
Information — Risk Factors".
The decline in the gold price since 1997 was reported to be for reasons that
include declining inflation in many countries worldwide. Further, in recent
years the central banks of several countries and multilateral organizations
such as the European Monetary Institute and the International Monetary Fund
have sold portions of gold held by them as reserves and may sell additional
amounts of gold in the future, which could result in further declines in the
market price of gold.
In 2002 the gold price rose above $300 per ounce, reaching a high of $US382 per
ounce in February 2003. This was attributed to various factors, including
rising tensions in the Middle East, global economic uncertainty and a falling
US$. Since reaching a high of US$382 / oz, the gold price has since declined
to levels around US$ 360 / oz at 31 May 2003.
If the market price of gold falls below Lihir's production costs and remains at
such a level for any sustained period, the company may experience losses and
determine that it is not economically feasible to continue
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commercial
production with respect to some or all of its mining activities or to continue
development of the Lihir operation. The company will also have to assess the
economic impact of any sustained changes in gold prices on recoverability and,
therefore, cut-off grades and the level of its reserves, and the carrying value
of assets.
Hedging
-
The company seeks to mitigate gold price risk, in part, through
hedging strategies. The policy of the company is to seek where appropriate to
protect operating costs and debt servicing through hedging activities. This may
include periodic purchases or sales of put or call options, spot deferred
sales, and forward sales covering a portion of its gold production at fixed
future prices. The company intends to regularly evaluate the portion of its
production that will be hedged. The company will not engage in speculative
transactions and does not intend to trade hedged positions.
The average realized prices in 2002, 2001 and 2000 represented premiums of 8 %,
33%, and 36%respectively over spot prices. These premiums contributed USS$30
million, US$58 million and US$53 million to pre-tax profits in these years.
2002
2001
2000
Average gold price realized
US$/ounce
356
355
379
Spot price
US$/ounce
310
271
279
Hedging premium
%
8
33
36
Following the adoption of IAS39 in 2001, gains and losses arising from the
early closure of hedge structures prior to 2001 were transferred to equity, to
be recycled to income when the underlying transaction, against which the hedges
were initially designated, take place. In 2002, following an increase in the
gold price to above US$300 / ounce, approval was sought and obtained from the
syndicate lenders to vary the minimum hedge requirements under the syndicated
loan facility, enabling the hedgebook to be restructured to provide
shareholders with additional exposure to the spot price. This was achieved
through the deferral and re-designation of existing hedge positions against
longer dated production.
The net amount of gains losses, arising from early closure and redesignation of
hedge structures, retained in equity at 31 December 2002 was a loss of US$11.4
million, following the recycling of gains totaling US$15.2 million and US$32.1
million into income during 2002 and 2001 respectively. Based on a Hedgebook
valuation of negative US$ 65.8 million as at December 31 2002, a further
US$58.0M of losses remain in equity to be recycled into income when the
underlying transactions, against which the hedges are designated, take place.
As at 31 December 2002, future underlying transactions are scheduled to take
place in the following years:
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Year
Deferred hedging
Costs
Residual Other
Comprehensive
Total OCI to
recycled
        to
/ (Gains)
Income
income
US$ millions
US$ millions
US$ millions
2003
3.4
4.7
8.1
2004
6.3
4.6
10.9
2005
4.2
5.1
9.3
2006
5.8
8.2
14.0
2007
(0.4
)
15.2
14.8
2008
(6.0
)
13.3
7.3
2009
(1.6
)
6.4
4.8
2010
(0.3
)
0.5
0.2
Total
11.4
58.0
69.4
In order to prevent a fall in gold prices from affecting the company's ability
to make loan payments, the syndicated facility agreement requires that Lihir
hedge a portion of its anticipated gold production. The syndicated financing
facility agreement signed in November 2000 stipulated minimum levels of hedging
in each of the years 2001, 2002, 2003, 2004 and 2005, of 505,500, 480,025,
380,000 260,000 and 140,000 ounces, respectively. As part of the hedgebook
restructure in 2002, approval was sought and obtained from the Facility Agent
to vary the minimum hedging requirements, so as to provide shareholders with
greater exposure to the spot price of gold in the near term. The revised
hedgebook profile is reflected in the tabulation at Note 24 to the financial
statements. The maximum level stipulated in the syndicated facility agreement
is 80% of proven and probable reserves. See Item 11 – "Quantitative and
Qualitative Disclosure about Market Risk" and Note 24 to the Financial
Statements for more details.
The intended effect of any future hedging transactions will be to lock in a
minimum sales price at the time of the transactions, thereby reducing the
impact on the company of a future fall in gold prices. However, no assurances
can be given as to whether, when or at what prices or cost the company will be
able to enter into hedging transactions. It should also be noted that the
effect of some hedging transactions will be to eliminate or limit to some
extent revenues the company would otherwise receive as a result of rises in the
price of gold. A forward sale, for example, would mean Lihir would not realize
any additional revenues above the gold price specified in the contract. Other
hedging techniques can be used to enable Lihir to share in some portion of
rises in gold prices. The company's profitability could be adversely affected
if for any reason its production of gold is unexpectedly interrupted and as a
result it is unable to produce sufficient gold to cover any forward sales
commitments it may have made.
Production and Operating
Costs
The following table sets down the gold production, average annual cash
production and cash operating costs during 2002, 2001 and 2000.
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Table of Contents
2002
2001
2000
Ore
          Processed (Tonnes'000)
3,828
3,619
3,414
Gold
          Produced (Ounces)
607,088
647,942
606,310
Operating
          Expenses (US$ millions)
Mining expenses
72,966
65,724
58,850
Processing
          costs
30,446
31,842
32,272
Power
          generation costs
24,103
24,450
23,247
General
          and administrative costs
31,300
21,409
24,062
Refining,
          royalty and management fees
7,933
7,961
8,315
Costs
          deferred and transferred to inventories
(19,556
)
(3,080
)
(6,583
)
147,192
148,306
140,163
Refining
556
604
540
Royalties
3,975
4,016
4,648
Management
          Fee
3,402
3,341
3,127
Refining,
          royalty and management fees
7,933
7,961
8,315
Cash
          Production Costs
2002
2001
2000
(US$ per
          tonne of ore processed)
Mining
19.1
18.2
17.2
Processing
8.0
8.8
9.4
Power
          generation
6.3
6.8
6.8
General
          and Administrative
8.2
5.9
7.0
Total
41.6
39.7
40.6
Lihir processed 3,828 kt of sulphide ore during 2002, producing 607,088 ounces
gold in bullion. Several significant production reliability issues were
overcome during the year, including an autoclave baffle wall failure and failed
lining of the tailings de-aeration tank. Mine grade was in line with
expectations and gold recovery decreased in line with increased throughput
rates.
Autoclave performance improved in the latter half of the year, with all feed
pumps generally operating at maximum speed. Improved planning, equipment and
work practices meant that the Company was able to further extend the time
between scheduled autoclave maintenance shutdowns to 11 months. During these
shutdowns, autoclave linings were inspected and found to be in excellent
condition.
The pebble crushing circuit was successfully completed and commissioned without
incident. The circuit is designed to increase the throughput capacity of the
grinding circuit. Further de-bottlenecking initiatives are now in progress,
designed to fully utilize installed autoclave and oxygen production capacity.
These include:
•
raising the throughput capacity of the autoclave feed pumping system
by the installation of additional pumps; and
•
increasing the capacity/efficiency of the carbon in leach circuit.
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In April 2000 the mining contract with Thiess-Roche Joint Venture was
terminated and Lihir assumed mining operations itself. Changes in the mining
operation since the transfer include an increased flexibility in mine planning,
better utilisation of available resources and a reduction in mine management
personnel.
Mine production rates fluctuate between 35 million tonnes per annum to 45
million tonnes per annum. Production at these rates was previously prohibitive
because of the higher cost of contract mining. This rate allows flexibility in
the ore cut-off grade and brings forward the development of future high-grade
zones.
In 2002 mining was predominantly from Phase 3 and Phase 4 of the Minifie ore
body. Production of ore from the high grade Phase 5 in the Lienetz ore body is
scheduled to start in late 2004 or early 2005.
Material moved during the year is shown in the table below.
2002
2001
2000
K tonnes
g Au/t
K tonnes
g Au/t
K tonnes
g Au/t
High-Grade
          Sulphide Ore
4,985
5.20
3,225
6.29
2,981
7.06
Low-Grade
          Sulphide Ore
4,305
2.31
4,626
2.59
3,682
2.89
Oxide
          Ore
—
—
—
—
187
2.32
Total
          Ore
9,290
3.86
7,851
4.11
6,850
4.69
Total
          Waste
30,723
24,082
29,505
Total
          Material
40,013
31,933
36,355
Based on the new reserve estimates and current preliminary mine plan estimates,
production is expected to be approximately 610,000 ounces in 2003, greater than
650,000 in the years 2004-2008, approximately 600,000 ounces per year through
to and including 2013, greater than 500,000 ounces through to 2016 and
approximately 350,000 ounces per year through the end of mining and stockpile
rehandle period out to and including 2035.
Mining Expenses
–
Mining expenses were US$ 73.0 million in 2002 compared with
US$65.7 million in 2001, US$58.9 million in 2000 and US$ 70.7 million in 1999.
Costs for 2002 were $US7.3 million higher than 2001, resulting from increased
maintenance on the mining fleet and waste barges. The major elements of total
mining costs during the open pit mining phase are hauling, loading, blasting
and dewatering. These elements combined account for an average of
approximately 70% of total direct mining costs.
During the 2002 Mining Period, mining expenses are allocated between the direct
process ore and the stockpile ore on the basis of the amount of contained gold
and only the expenses attributable to direct process ore will be expensed.
Mining expenses attributable to the stockpiled ore will be expensed when the
ore is processed and sold during the Stockpile Processing Period after open pit
mining ceases. This however is dependent on net realizable value tests.
Inventory is valued at the lower of cost and net realizable value. As at
December 31, 2002 non-current stockpiles were fully provided against, based on
their net realizable values. Because of the lower grades that will be
processed during the Stockpile Processing Period, unit cash operating costs
will be significantly higher during this period compared to the Mining Period.
Direct expenditure on mining is brought to account for each phase of the mine's
development based on the estimated ratio of waste to ore for that phase.
During the Mining Period the actual ratio of waste to ore removed for each
phase varies from year to year. In periods where more than the average amount
of waste is removed the surplus is transferred to the deferred mining cost
account. It is subsequently expensed during periods where the
55
Table of Contents
waste to ore
ratio is less than the average. The average amount of waste to be removed is
assessed according to each mining phase, and not over the entire life of the
mine.
Processing Costs
-
Processing costs fell to US$30.4 million in 2002 from
US$31.8 million in 2001, US$32.3 million in 2000 and US$37.6 million in 1999
following further cost efficiencies in processing operations.
Power Generation Costs —
Power generation costs were US$24.1 million in 2002
compared to US$24.5 million in 2001, US$23.3 million in 2000 and US$13.6
million in 1999. In 2002 higher maintenance costs were offset by lower Heavy
Fuel Oil consumption.
General and Administrative Expenses
–
General and administrative costs were
$US$ 31.3 million in 2002 compared to US$21.4 million in 2001, US$24.1 million
in 2000 and US$32.4 million in 1999. Apart from an increase in insurance
premiums of $US2 million and increased travel costs following the
standardization of fly-in fly-out rosters, the primary reason for the increase
in costs for 2002 relates to the de-recognition of liabilities of US$7 million,
resulting from a review of creditor balances in 2001.
Royalty, Refining and Management Fees
-
These totaled US$7.9 million,
US$8.0 million, and US$8.3 million in each of the years 2002, 2001 and 2000
respectively.
Mining royalties payable to the PNG Government are 2% of either the FOB value
of the minerals, if they are exported without smelting or refining in PNG, or
of the net smelter returns from the minerals, if they are smelted or refined in
PNG. Net smelter returns is defined to mean the value of the smelted or
refined product (
e.g.,
doré gold) less the costs, charges and expenses incurred
in connection with the smelting or refining process.
Lihir Management Company's monthly fee for managing the Lihir operation is the
greater of US$250,000 or 1.5% of the average monthly operating costs in the
previous three-month period, subject to an inflation adjustment. See
"Additional Information – Material Contracts – Lihir Management" for a
description of the management agreement between Lihir and Lihir Management
Company.
The agreement with Rothschild Australia Pty Ltd and Metals Refining Operations
Limited in relation to the refining of its gold doré production expired in
2002. Currently, gold refining is being carried out under a short-term
arrangement with AGR Mathey. The refining fee is derived from four components:
•
Pricing charge — A$0.40 per gross doré ounce.
•
Transport from the mine to Port Moresby including transit insurance -
a sliding scale according to quantity and ranging from A$0.20 to
A$0.48 per gross troy ounce.
•
Transport from Port Moresby to Perth including transit insurance — a
sliding scale according to quantity and ranging from A$0.425 to A$0.60
per gross troy ounce.
•
Location London swap charges – US$0.25 per fine gold ounce outturn.
A longer-term arrangement is currently under negotiation with AGR Mathey.
Gross Cash Costs and Total Cash Costs –
These are set down in the table below
prepared in accordance with the Gold Institute Standard:
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Table of Contents
2002
2001
2000
Gross cash cost
US$/ounce
245
216
240
- deferred mining costs
US$/ounce
(6
)
(4
)
26
- low grade stockpile adjustment
US$/ounce
—
—
(13
)
- inventory adjustment
US$/ounce
(12
)
9
(13
)
- corporate expenses
US$/ounce
—
—
(4
)
Total cash cost
US$/ounce
227
221
236
Gross cash costs per ounce were substantially higher in 2002 resulting from
lower production, coupled with increased mine maintenance and general and
administrative costs. The large inventory adjustment in 2002 related to gold
in transit at yearend.
Other Charges
Depreciation and Amortization –
The depreciation charge for 2002 amounted to
US$27 million compared to US$32 million in 2001, and US$35 million in 2000.
The reduction from 2001 to 2002 was attributable to an increase in reserves and
a reduction in the depreciable base due to the impairment in 2000.
Capitalized development costs for mine properties are amortized using the
units-of-production method. The units-of-production method results in an
amortization charge proportional to the depletion of estimated proven and
probable ore reserves. Amortization of the mine properties accounts for the
vast majority of total depreciation and amortization charges.
The cost of buildings, machinery and equipment is written off over the expected
economic life of the item, adopting a method that reflects the consumption of
economic benefits. This may be based on the units-of-use method or a fixed
percentage over time.
Interest Expense –
Net finance costs amounted to US$3 million in 2002 compared
with US$4.0 million in 2001, andUS$14 million in 2000. The reduction in
interest expense for 2002 reflected lower US interest rates and scheduled
principal payments under the EIB facility. Overall, the lower interest expense
since 1999 is attributable to the US$115 million pre-payment under the
syndicated facility agreement in November 1999, a prepayment of US$25 million
in May 2001 and scheduled principal repayments under the EIB facility.
Lihir's interest expense consisted of interest payable in respect of borrowings
under the syndicated facility agreement and the EIB facility. In addition,
premiums paid by the company in respect of certain political risk insurance
policies entered into for the benefit of the banks under the syndicated
facility agreement are included in interest expense. The aggregate political
risk insurance premiums are expected to average approximately 1.0% per annum on
the outstanding principal amount borrowed under the syndicated facility
agreement (compared with 2.9% under the previous loan agreement).
Interest expense reflects the amount drawn down under the syndicated facility
agreement at any point in time and the prevailing rate of interest. The
interest rate under the syndicated facility agreement is a floating rate of
LIBOR plus 1.9% per annum (compared with 1.875% under the previous loan
agreement).
Tax Expense —
While the general rate of taxation for resident PNG corporations
is 25% of taxable income, taxable income derived by such corporations from
Special Mining Lease operations is subject to tax at the higher rate of 30%
since 2001 (35% for 2000, 1999 and 1998). The company is currently subject to
this 30% tax in respect of
57
Table of Contents
income derived from the Lihir operation. In the
case of a Special Mining Lease, mining income derived from the lease is
assessed as if it were the only income of the holder of the lease and
deductions are generally only available for expenditures attributable to the
project to which the lease relates. The company has been given approval to
prepare its tax returns in US dollars.
In previous years the company was eligible to accelerate its tax depreciation
and amortisation. These accelerated depreciation and amortization deductions
eliminated the company's taxable income during the early years of gold
production from the Lihir operation. Tax effect accounting procedures are
followed using the liability method for all temporary differences arising
between the tax bases of assets and liabilities and their carrying values for
financial reporting purposes. Income tax on temporary differences are set
aside to deferred tax liability and deferred tax asset accounts at current
rates. Deferred tax assets relating to deductible temporary differences and tax
losses are only carried forward as an asset to the extent that it is probable
that future taxable profit will be available against which the deductible
temporary differences and tax losses can be utilised. At the end of 2002 Lihir
elected not to recognise US$138 million of deferred tax assets (2001: US$117
million and 2000: US$146 million) on the grounds that, at present gold prices,
the period over which the benefit is likely to be realized extends too far into
the future for realization to be regarded as probable.
In the Budget for Papua New Guinea, passed at the end of 1998, the PNG
Government introduced an interest withholding tax at a rate of 15% effective
January 1, 1999, which would apply to the interest payments under the company's
old loan agreement. The provisions of that loan agreement required the company
to meet the obligation of any such withholding tax. The company made
submissions to the PNG Government and the taxation task force for the abolition
of the interest withholding tax. The interest withholding tax was repealed
from legislation on September 1, 1999.
A 4% mining levy imposed in the 1998 budget was also amended during 1999
following considerable lobbying by industry groups. The 45 mining levy was
replaced by a more revenue neutral structure, designed to ensure that the
government did not lose revenue as a result of the introduction of a Value
Added Tax (VAT) system in 1999. Essentially the mining levy seeks to impose an
additional charge on purchases by the company to compensate for the revenue
forgone by the Government on reducing various import duties on the introduction
of the VAT system. The terms of this arrangement were negotiated between the
government and industry groups. In the 2001 annual budget the PNG Government
announced that the mining levy would be phased out over 4 years from 1 January
2002. This decision was repealed in the 2003 budget and the levy was left at
75% of the original rate introduced. Industry groups are at present lobbying
for the phasing out of the levy.
During 2001 the dividend withholding tax was reduced from 15% to 10%.
At December 31 2002 the group had a net deferred tax position of US$ nil (2001:
US$ nil and 2000: US$ nil), a current period tax expense of US$16.4 million
(2001: US$16.4 million tax benefit and 2000: US$ nil) included in the income
statement and a tax benefit of US$ 16.4 million (2001: US$16.4 million tax
charge and 2000: US$ nil) included in equity. At that date the group also had
unrecognised tax losses of US$111.3 million (2001: US$89.4 million and 2000:
US$ nil) and net deductible temporary differences of US$349.8 million (2001:
US$300.4 million and 2000: US$486.8 million). The tax losses can be carried
forward for a period not exceeding 20 years.
Deferred tax assets have not been recognised beyond deferred tax liabilities
because the group does not consider the realisation of the tax benefits through
future taxable profits as probable, which implies a high level of likelihood.
The recognition of deferred tax assets to the extent of deferred tax
liabilities is required under IAS 12, as they relate to income taxes levied by
the same taxation authority and the taxable temporary differences are expected
to reverse in the same period as the deductible temporary differences.
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Table of Contents
In accordance with IAS 12 a Deferred Tax Asset of US$16.4million was
recognised, being to the extent of the Deferred Tax Liability, on the 31
December 2001. This arose as a consequence of the valuation of the effective
portion of the hedgebook being US$54.8M in-the-money. With the effective
portion of the hedgebook valuation being US73.0 million out-of-the-money at 31
December 2002, the Deferred Tax Liability was effectively eliminated.
As Lihir does not consider the realisation of its tax benefits as probable, no
Deferred Tax Asset has been recognised. On the same basis, the Deferred Tax
Asset previously raised on the 31 December 2001 was removed from the Balance
Sheet, giving rise to a tax charge of US$16.4 million. This tax charge is
non-cash and offsets the non-cash tax benefit of US$16.4 million recognised in
the prior year.
Impairment Provisions
Continued weakness in prevailing prices and the outlook for the gold market
prompted a downward revision in Lihir's long-term gold price assumption as at
December 31, 1999 from US$350/oz to US$325/oz. Lihir restated its 1999
financial accounts to record a US$237 million impairment provision in
compliance with International Accounting Standard IAS 36.
Lihir responded to the deteriorating outlook for gold by further reducing its
long-term gold price assumption from US$325 to US$300/oz as at December 31,
2000. The resulting impairment provision was US$121 million, which was
reflected in Lihir's 2000 accounts. Together with the US$237 million provision
taken in its re-stated 1999 accounts, Lihir has made a cumulative non-cash
impairment charge of US$358 million.
In 2001, after applying the same principles as in 2000, no impairment was
required to be recognized at the gold price used in the reserves statement of
$US300, or at the lower sensitivity price of $US280.
In 2002, after applying the same principles as the previous years and
revisiting critical assumptions, including life of mine, remaining reserves, a
long term gold price assumption of $US305 (2001: US$280) and a pre-tax real
discount rate of 7.0% (2001: 6%), an impairment reversal to the value of
$US37.9M was required in accordance with IAS 36.
Foreign Currency Fluctuations
The company's functional currency is the US dollar and accordingly its IAS
Financial Statements are prepared in US dollars. Virtually all of the
company's revenues are received in US dollars and a substantial portion of its
operating expenses are denominated in US dollars. However, a portion of the
company's total expenditures, principally expenses relating to expatriate
salaries, benefits, consultants, grinding materials, and explosives are
denominated in Australian dollars and certain of its expenses are denominated
in Kina. Accordingly, a depreciation of the US dollar against the Australian
dollar or Kina would adversely affect the company's financial results. In
addition, the company is subject to certain PNG requirements regarding the
maintenance of cash reserves in PNG in a Kina-denominated account. See
"Additional Information – Exchange Controls".
Recently Issued US Financial Accounting Standards
The Financial Accounting Standards Board ("FASB") has issued certain Statements
of Financial Accounting Standards ("FAS"), which are not effective with respect
to the fiscal years presented in the consolidated financial statements.
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Table of Contents
The Group does not expect any impact from the adoption of FASB Interpretation
No. 45: "Indemnification Clauses in Business Transactions" or FASB
Interpretation No. 46 "Consolidation of Variable Interest Entities".
In August 2001, the FASB issued FAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets." This Statement supersedes FAS No. 121 and the
accounting and reporting provisions of APB Opinion No. 30. This Statement will
require one accounting model be used for long-lived assets to be held and used
or disposed of by sale, whether previously held and used or newly acquired, and
will broaden the presentation of discontinued operations to include more
disposal transactions. This Statement was adopted by the company on January 1,
2002, and there was no impact on adoption.
In June 2001, FASB issued FAS No. 143, "Accounting for Asset Retirement
Obligations." With the adoption of this Statement, retirement obligations will
be recognized when they are incurred and displayed as liabilities and the
initial measurement will be at fair value. In addition, the asset retirement
cost will be capitalized as part of the asset's carrying value and subsequently
allocated to expense over the asset's useful life. This Statement is required
to be adopted by the company on January 1, 2003. Lihir is anticipates that the
implementation of this standard will be similar to the current treatment of
restoration provisions in terms of IAS 37 Provisions.
In addition, in June 2001, FASB issued FAS No. 141, "Business Combinations" and
FAS No. 142, "Goodwill and Other Intangible Assets." With the adoption of FAS
Nos. 141 and 142, business combinations initiated after June 30, 2001, will be
required to be accounted for using the purchase method, and goodwill and
intangible assets that have indefinite useful lives will not be amortized but
rather will be tested at least annually for impairment. Intangible assets that
have finite useful lives will continue to be amortized over their useful lives,
but without the constraint of the 40 year ceiling. FAS No. 142 is required to
be adopted by the company on January 1, 2002. These statements were adopted by
the company on January 1, 2002, and there was no impact on adoption.
Recently Issued IFRS Standards
There are expected to be numerous changes in International Financial Reporting
Standards (IFRS) during 2003 but only a few new or revised standards and
interpretations are applicable for the first time to December 31 2002 year
ends. None of these standards have a material affect on Lihir's December 31
2002 financial statements.
The International Accounting Standards Board (IASB) are currently working on a
number of improvement projects to existing IFRS as well as a short-term
convergence project between IFRS and US GAAP. The aims of the improvements
project was to raise the quality and consistency of financial reporting by
drawing on best practice from around the world and removing options in
international standards. The Improvements project is a first step by the IASB
to promote convergence on high quality solutions in its objective to establish
a globally accepted set of accounting standards. As Lihir's financial
statements are prepared in accordance with IFRS, its financial statements in
future periods may be affected by these impending changes. Specific projects
which might be relevant to Lihir's financial statements in future periods if
they are adopted include:
•
Short-term convergence project.
The objective of this project is to
reduce differences between IFRS and US GAAP. The project is a joint
project with the FASB. Key areas being considered include considering
convergence of FAS 128 Earnings per Share to converge with IAS 33,
amendments to IAS 37 Provisions, Contingent Liabilities and Contingent
Assets, improvements to IAS 32 Financial Instruments: Disclosure and
Presentation and IAS 39 Financial Instruments: Recognition and
Measurement and others. As this project is still in progress, other
than the minimization of GAAP differences, the nature of any impact to
Lihir is still indeterminate at the date of this report.
60
Table of Contents
•
Revenue recognition.
The primary objective of this project is to develop a
comprehensive set of principles for revenue recognition that will eliminate the inconsistencies in the existing
authoritative literature and accepted practices.  For its part, the
IASB'S plan is that the project will lead to a
revision of the IASB Framework and IAS 18, for which it expects to publish exposure drafts in 2004.
•
Financial Instruments.
The objective of the proposed amendments is to improve the existing
requirements in IAS 32 and IAS 39. These amendments deal with issues identified by audit firms, national standard-setters, regulators and
others, and issues identified in the IAS 39 implementation guidance process or by IASB staff.  The IASB does not intend to reconsider at
this time the fundamental approach to the accounting for financial instruments established by IAS 32 and IAS 39.
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B. Liquidity and Capital Resources
As at December 31, 1998 Lihir's net debt stood at US$235.8 million. A major
objective for 1999 and 2000 was to reduce Lihir's debt and restructure its main
loan facility with a 26 bank syndicate. In October 1999 the company raised
US$131 million through the placement of 141,287,000 ordinary shares at A$1.45
per share. This enabled Lihir to make a prepayment of US$115 million in
November 1999 under the main loan facility, thereby reducing the balance to
US$127 million. Shares sold in the October 7, 1999 private placement in the
United States were deposited into a new restricted ADR facility for which the
Bank of New York acts as depositary.
Effective February 2, 2000 Lihir agreed to merge with Niugini Mining by issuing
further Lihir shares to Niugini shareholders to acquire US$54 million of cash
at the same price as the placement. The merger, by scheme of arrangement, was
approved by Lihir's shareholders in a special meeting in December 1999, by
Niugini Mining shareholders in January 2000 and by the Papua New Guinea
National Court on February 1, 2000. The cash available from the merger was
used to purchase the mining fleet and equipment from the mining contractor for
US$42.3 million and pay the US$7.7 million termination fee payable for early
termination of the mining contract.
The main loan facility was terminated by agreement on November 22, 2000 and
replaced by a new syndicated facility agreement. The new loan is in the form
of a US$50 million revolving credit facility arranged and underwritten by
ABN-AMRO Australia Limited. Commonwealth Bank of Australia, Deutsche Bank AG,
Macquarie Bank Limited and SG Australia Limited are participating with ABN-AMRO
Australia Limited as financiers of the structure.
The new US$50 million loan, together with US$43 million cash generated by the
restructure of Lihir's hedge book in November 2000, was used to repay the
residual balance of US$90 million on the previous main loan facility. The
overall interest rate spread reduced from 4.8% over LIBOR under the old
facility to 2.9% over LIBOR under the new US$50 million facility. The new loan
extends to June 2005 (instead of June 2003 under the previous facility) and is
expected to carry Lihir through the period prior to accessing the Lienetz
deposit in 2004.
The facility limit reduces in increments as follows:
•
June 30, 2003
US$10 million
•
June 30, 2004
US$10 million
•
June 30, 2005
US$30 million
The US$43 million cash release was achieved by novating 458,035 ounces of
Lihir's main loan structured hedges to ABN-AMRO such that the average strike
price was reduced from US$471 per ounce to US$368 per ounce. Simultaneously
the opportunity was taken to reduce the balance on Lihir's subordinated
financing from the EIB from US$34 million to US$25 million. In 2001 debt was
further reduced by US28.4 million, being a prepayment of US$25.0 million on the
new revolving credit facility and scheduled payments of US$3.4 million on the
subordinated financing from EIB.
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Measured against the objective of reducing Lihir's net debt of US$235.8 million
prevailing at December 31, 1998, substantial progress has been made over the
last three financial years:
Net debt as at December 31
US$ thousands
2002
2001
2000
EIB facility
(17,549
)
(21,324
)
(23,918
)
Loan agreement
—
—
—
Syndicated facility agreement
(23,009
)
(23,009
)
(48,854
)
Bank overdraft
(1,297
)
—
—
Less cash on hand
33,817
37,915
40,823
Net debt
(8,038
)
(6,418
)
(31,949
)
Equity
(426,410
)
(496,248
)
(383,456
)
Net debt to debt plus equity
2
%
1
%
8
%
Gearing (net debt as a percentage of net debt plus equity) increased to 2% as
at December 31, 2002.
Based on present trends, surplus cash will be generated for transfer to the
unsecured distribution account over the next several years. While Lihir
currently believes that it has or will have access to resources sufficient to
finance its operations, the adequacy of the company's financial resources will
depend upon its ability to generate sufficient revenues from gold production
and to keep its costs and other expenditures within its current estimates.
Lihir believes that working capital is sufficient for its present requirements.
Under the syndicated facility agreement, if at calculation dates of December
31 and June 30 each year, the debt service cover ratio for the next 12 months
is greater than 1.25 and the life of mine debt service cover ratio is greater
than 2.5, Lihir has the right to withdraw cash in excess of a US$15 million
minimum liquidity balance from the secured accounts.
Accordingly, based on the cover ratio tests performed for December 31, 2002,
Lihir may at any time prior to the next calculation date (June 30, 2003)
withdraw from the secured accounts an amount equal to the cash on hand of
US$33.8 million plus undrawn borrowings of US$27.0 million on the syndicated
facility agreement, less the US$15 million reserve, for its own purposes
(including a payment into a nominated distribution account which falls outside
the secured assets).
The resulting amount of US$45.8 million constitutes a known cash reserve with
which Lihir can accommodate fluctuations in cash flows and can finance future
capital expenditure requirements.
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The profile of Lihir's obligations to external parties is shown below:
US$ thousands
Total
Less than 1 year
1 to 3 years
3 to 5 years
More than 5 years
Long term debt
40,558
3,510
3,510
26,519
7,019
Capital lease obligations
0
Operating leases
2,512
1,806
706
Purchase Obligations
20,595
20,595
0
0
0
Management Fee Obligation
68,527
3,856
6,898
6,898
50,874
Total
132,192
29,767
11,114
33,417
57,893
At December 31, 2002 Lihir's capital expenditure commitments totaled US$10.5
million (2001: US$6.9 million and 2000 US$13.5 million).
Additional points to note with regards to liquidity are that the company does
not engage in off-balance sheet financing structures. Furthermore the company
is not aware of any information issued by ratings agencies that would influence
the company's ability to raise funds as, and when, required.
For a more complete description of the syndicated facility agreement, the EIB
Facility and certain related agreements, see "Additional Information — Material
Contracts — Financing Agreements". For discussion on hedging policy, see
"Quantitative and Qualitative Disclosure About Market Risk".
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C. Research and Development, Patents and Licenses, etc
Lihir does not have a significant research and development program.
D. Trend Information
Production
Lihir officially commenced production in October 1997, three months ahead of
schedule. It produced its millionth ounce of gold in July 1999, still about
three months ahead of the schedule anticipated in 1995 and described in its
initial public offering prospectus. Similarly it produced its two millionth
ounce in January 2001, about two months ahead of prospectus schedule. Lihir
believes that the potential exists to increase the rate of gold production from
the Lihir operation at certain gold price assumptions.
As specified under the Mining Development Contract, Lihir has commenced a
pre-feasibility study that, if warranted, will lead to a full feasibility
study into the possibility of expanding the project beyond the existing
capacity to a throughput of at least 13,000 tonnes per day. After consulting
with the PNG Government about the terms of the expansion plan, Lihir is free to
choose whether or not to pursue the expansion. At the date of this report this
pre-feasibility study had not been completed.
In the absence of the results of the feasibility studies, the company believes
that production increases are more likely to be implemented gradually over time
through a number of smaller steps, ranging from maximizing the throughput
capability of the initial processing plant equipment to the addition of extra
equipment to discrete parts of the processing operation. The focus through to
the end of 1998 was on optimization of installed capacity, primarily through
the provision of additional oxygen capacity by the installation of the Praxair
oxygen plant. After losing considerable production during work on the
autoclaves in the first half of 1999, priority was given to improving process
plant reliability and, in particular, to finding a robust technical solution to
the autoclave lining damage problem. Recent inspections of the autoclaves
during scheduled shutdowns confirmed that the new brick linings, installed in
the three autoclaves during 1999 and the first half of 2000, are in excellent
condition.
It was always recognised that sulfur grades in Minifie would decline. Sulfur
is required above a threshold level to ensure efficient operation of the
autoclaves. At the end of 1999 a sulfur flotation plant was introduced to
increase sulfur grades to the autoclaves and this initiative has worked well.
The next step to ameliorate declining grades was to recover heat from the tail
end of the autoclaves and recycle it to the feed. This resulted in the heat
recovery plant, engineered by Hatch Associates Pty Ltd, of which two vessels
were commissioned in the last quarter of 2001 and the final vessel commissioned
in the first quarter of 2002. The plant is already performing beyond
expectations.
Power demands have increased as a result of a deeper pit and the plant
operating consistently at higher levels. A 12th power generator was
commissioned during 2001 to relieve this potential constraint. Based on
present information, power generation using geothermal steam is a viable option
for Lihir. Well testing to determine steam production capacity from the
Minifie, Lienetz and Kapit areas were undertaken in 2001, indicating ultimate
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power generating potential in excess of 30Mw. Based on completed feasibility
studies, a 6Mw pilot plant has been approved for construction. Commissioning
of the pilot plant was in April 2003.
It is expected that the autoclaves will require re-bricking in 2005. For three
autoclaves this represents a substantial loss of availability during this
period of time. In 2000, the Board authorised a feasibility study to affirm the
viability of installing a fourth autoclave in advance of 2005. This study will
also assess the benefit of increasing grinding and flotation capacity so that
the use of available oxygen and autoclave capacity can be maximised.
Downward pressure on costs will continue and it is expected that further cost
savings will be achieved in 2003. At a time of relatively high fuel oil costs
the positive results from studies so far on geothermal power generation are of
particular importance. A 6MW plant was commissioned in April 2003 and the
Board is due to consider approval of an investment in a further 30MW of
capacity in the third quarter of 2003. With Lihir Gold's high infrastructure
and overhead costs, increased output is the most effective means of reducing
unit costs. Additional reserves and confidence in the project's potential has
led to the initiation of a pre-feasibility study into expanding production
capacity.
E Events Subsequent to Signing of the Financial Statements
The Board of Directors announced at Lihir's Annual General Meeting on April 29
2003 that a dividend of 2 Australian cents per share would be paid to holders
of ordinary shares in the company. The record date, at which time eligibility
to receive the dividend will be determined, has been declared as July 1 2003
and the payment date as July 16 2003.
A Heads of Agreement was signed on April 27 2003 between Lihir Gold, the
Independent State of Papua New Guinea and representatives of Lihirian
landowners which is intended to resolve issues surrounding Lihirian landowners
ownership of equity in the company. Although this agreement is not legally
binding on any party, it is anticipated that the company will, during the
second half of 2003, contribute approximately US$3.5 million to a community
grant scheme.
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Item 6. Directors, Senior Management and Employees
A. Directors and Senior Management
Directors
The current directors of the company as at the date of this annual report are
as follows.
Ross Garnaut AO, BA. PhD
:
Chairman since 1995. Professor of Economics in the
Research School of Pacific and Asian studies at the Australian National
University; Chairman of Lonely Planet Publications Pty Ltd; Chairman of PNG
Sustainable Development Co Ltd; and Director, OK Tedi Mining Ltd; Former
Chairman of the Bank of Western Australia Ltd and of the Primary Industry Bank
of Australia Ltd.
Neil Swan BE (Hons):
Appointed Managing Director of Lihir Gold Ltd and Lihir
Management Company in October 2002. Former Chief Operating Officer of Lihir
Gold Ltd. General Manager at Rio Tinto Iron Ore; General Manager Operations at
Hammersley Iron; and General Manager Business Improvement at CRA.
Geoff Loudon BSc., MSc.:
Appointed Director in 1995. Chairman L & M Mining
Limited (NZ and Bolivia) and Director Sterilox Technologies Inc (USA). Former
Chief Executive and later Chairman of Niugini Mining Limited which discovered
the Lihir deposit in joint venture with Kennecott.
John O'Reilly MSc., DIC, BSc.:
Alternate director to Jonathan Leslie. Head
of Technology for the Rio Tinto Group; Former Chief Executive Officer of Lihir
Gold Limited and Director of Lihir Gold and Lihir Management Company Limited.
Following his resignation on 1 November 2002, John was reappointed as a
Director of Lihir Gold Limited on 1 March 2003.
Anthony Siaguru KBE LLB:
Appointed Director in 1997 and Deputy Chairman in
2002. Chairman of the Port Moresby Stock Exchange and consultant with Blake
Dawson Waldron Lawyers in Port Moresby; Former Deputy Secretary General of the
Commonwealth of Nations.
Peter Cassidy Ph D. BSc.:
Appointed Director effective 22 January 2003.
Director of Oxiana Resources NL and Sino Gold Limited; Former Director of
Aurion Gold and former Chief Executive Office of Goldfields Limited.
Alan Roberts BSc (Hons):
Appointed Director in 2000 and Corporate Director in
October 2002. Former Chief Executive Officer of Lihir Gold Limited; Managing
Director of Lihir Management Company Limited; and President Director of PT
Kelian Equatorial Mining in Indonesia. Has held several senior management
positions with Rio Tinto. Alan Roberts resigned from the board on 31 March
2003.
Jonathan Leslie MA (Oxon):
Appointed Director in 1995. Chief Executive
Diamonds and Gold Group at Rio Tinto; Director of Rio Tinto PLC and Rio Tinto
Limited. Jonathan Leslie resigned from the board on 7 March 2003.
Marc Soipang:
Appointed Director in 1995. Chairman of the Lihir Mining Area
Landowners Association and Director of Lakaka Limited, a public company owned
by the people of Lihir Island. Marc resigned from the board effective 7 March
2003.
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Lihir Management Company
Lihir Management Company manages the Lihir operation for the company pursuant
to the management agreement with the company. See "Information on the Company —
Business Overview — Management". The managing director of Lihir Management
Company is the chief executive officer of the company and reports directly to
the company's board of directors. As a result of these arrangements, Lihir
does not have its own separate management personnel.
Several of the senior management are transferred on a temporary basis from Rio
Tinto or its subsidiaries for a specified period of time. The chart below
lists the management of Lihir Management Company and the dates they joined
Lihir Management Company and the Rio Tinto.
Year Joined
Lihir Management
Year Joined Rio
Name
Position with Lihir Management Company
Company
Tinto
Neil Swan
Managing Director
2001
1973
Rod Antal
Manager Corporate, Safety and Investor Relations
1997
1997
Ron Brew
Manager Government Liaison
1990
1990
Phil Welten
Manager Mine Operations
2001
2001
Tim Dobson
Manager Process Plant Operations
2002
2002
Joe Daimol
Manager Business Development
1995
1995
Geoff Day
Manager Community and Environment
1998
1998
Steve Hunt
Manager Mine Technical
1997
1994
Nick Lambeth
General Manager Commercial
1997
1982
Stuart Sankey
Manager Mine Maintenance
2000
2000
John Wallace
Manager Human Resources
2001
2001
Borone Isana
Manager Government Liason
2003
2003
Neil Swan:
See "board of directors" above.
Rod Antal:
Joined the company in 1997, initially as the Senior Accountant.
Former Assistant Financial controller at Porgera Joint Venture and Chartered
Accountant at BDO.
Phil Welten:
Joined the
company in 2001. Former Project Manager at Roche
Mining, Operations Manager Pannawonica at Robe River Iron Associates and Mine
Manager at WMC.
Tim Dobson:
Joined the company in 2002. Former Process Manager at OMG Cawse
Nickel Operations, Senior Metallurgist at Placer Dome Asia Pacific and Placer
Dome South America.
Ron Brew:
Joined the company in 1990. Former Manager Government Liason at
Kennecott Explorations and Regional Planning Advisor for the New Guinea Islands
Region.
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Joe Daimol:
Joined the company in 1995, initially as the Business Development
Manager; Former Accountant at Andersons Foodland Limited and Financial
Controller at Arawa Enterprises Limited.
Geoff Day:
Joined the company in 1998. Former Director of Limnos
Environmental Consultants, Senior Environmental Chemist at OK Tedi Mining
Limited and Environmental Chemist at NSR Environmental Consultants.
Steve Hunt:
Joined the company in 1997, initially as Chief Geologist;
Former Superintendent Geology and Grade Control at Rio Tinto's Kelian
operations and Chief Geologist at Placer's Granny Smith operations.
Nick Lambeth:
Joined the company in 1996, initially as the Financial
Controller. Former Administration Manager at Hamersley Iron and Senior
Accountant at Pacific Coal.
Stuart Sankey:
Joined the company in 2000. Former Engineering Manager at
Queensland Magnesia, Construction Manager at MIMS Lead IsaSmelt and Resident
Engineer at Khartoum North Thermal Power Station.
John Wallace:
Joined the company in 2002. Former Senior Consultant at John
Davidson and Associates, HR Manager at Thiess Roche Lihir Joint Venture and
Manager Community and Employee Relations at Gold Ridge Mining.
Barone Isana:
Joined the company in 2003 as Manager Government Liason. Has
held several senior-level positions within the PNG Government.
No family relationships exist between members of the board or senior
management. There were no arrangements or understandings with major
shareholders, customers, suppliers or others, pursuant to which any person
referred to above was selected as a director or member of senior management.
B. Compensation
Directors' Remuneration
Directors' remuneration, including the value of benefits received during the year:
US$'000
2002
2001
2000
Garnaut, Ross
83
66
72
Leslie, Jonathan
—
—
—
Loudon, Geoff
19
23
28
Merton, Michael (Retired)
—
—
162
O'Reilly, John
—
—
—
Roberts, Alan
330
300
303
Siaguru, Anthony
17
17
20
Soipang, Mark (Retired)
—
2
2
Swan, Neil
298
—
—
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In addition, during the year the Company paid a premium of US$55,000 (2001: 46,000; 2000:
US$34,125) for Directors and Officers Liability Insurance.
The schedule below lists the remuneration by band of employees of Lihir Management Company
whose remuneration and benefits exceeded PNG K100,000. These bands include the remuneration
of the senior management individuals listed in the previous section:
Remuneration and benefit band
Number of Employees
US$
PGK
2002
2001
2000
US$24,000 - $26,400
K100,000 - K110,000
1
—
1
US$26,401 - $28,800
K110,001 - K120,000
—
12
—
US$28,801 - $31,200
K120,001 - K130,000
1
9
2
US$31,201 - $33,600
K130,001 - K140,000
2
4
—
US$33,601 - $36,000
K140,001 - K150,000
2
2
—
US$36,001 - $38,400
K150,001 - K160,000
—
3
—
US$38,401 - $40,800
K160,000 - K170,000
4
2
—
US$40,801 - $43,200
K170,000 - K180,000
2
—
—
US$43,201 - $45,600
K180,000 - K190,000
1
1
1
US$45,601 - $48,000
K190,000 - K200,000
1
—
—
US$48,001 - $50,400
K200,001 - K210,000
3
—
2
US$50,401 - $52,800
K210,001 - K220,000
4
—
2
US$52,801 - $55,200
K220,001 - K230,000
3
—
3
US$55,201 - $57,600
K230,001 - K240,000
1
3
5
US$57,601 - $60,000
K240,001 - K250,000
3
3
2
US$60,001 - $62,400
K250,001 - K260,000
1
3
8
US$62,401 - $64,800
K260,001 - K270,000
—
5
6
US$64,801 - $67,200
K270,001 - K280,000
1
1
5
US$67,201 - $69,600
K280,001 - K290,000
1
3
3
US$69,601 - $72,000
K290,001 - K300,000
—
7
5
US$72,001 - $74,400
K300,001 - K310,000
1
5
4
US$74,401 - $76,800
K310,001 - K320,000
—
7
1
US$76,801 - $79,200
K320,001 - K330,000
—
6
2
US$79,201 - $81,600
K330,001 - K340,000
1
3
2
US$81,601 - $84,000
K340,001 - K350,000
2
2
2
US$84,001 - $86,400
K350,001 - K360,000
4
—
—
US$86,401 - $88,800
K360,001 - K370,000
4
—
—
US$88,801 - $91,200
K370,001 - K380,000
9
—
1
US$91,201 - $93,600
K380,001 - K390,000
10
1
1
US$93,601 - $96,000
K390,001 - K400,000
6
6
—
US$96,001 - $98,400
K400,001 - K410,000
4
1
—
US$98,401 - $100,800
K410,001 - K420,000
7
—
1
US$100,801 - $103,200
K420,001 - K430,000
2
1
—
US$103,601 - $105,600
K430,001 - K440,000
1
—
US$105,601 - $108,000
K440,001 - K450,000
—
1
—
US$108,001 - $110,400
K450,000 - K460,000
1
—
1
US$112,801 - $115,200
K470,001 - K480,000
1
—
—
US$115,201 - $117,600
K480,001 - K490,000
2
1
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US$117,601 - $120,000
K490,001 - K500,000
1
US$124,801 - $127,200
K520,001 - K530,000
1
—
—
US$127,201 - $129,600
K530,000 - K540,000
1
—
—
US$136,801 - $139,200
K570,001 - K580,000
—
1
—
US$146,400 - $148,800
K610,001 - K620,000
—
—
1
US$168,000 - $170,400
K700,001 - K710,000
1
—
—
The US$ bands are based on the 2002 PGK exchange rate and will vary for prior
periods.
No profit sharing or stock option scheme is operated by Lihir at present.
C. Board Practices
Board of Directors
At the Annual General Meeting of the company held on April 28, 1998,
shareholders approved registration of the company under the PNG Companies Act
1997 and the company was registered effective May 15, 1998 with the PNG
Companies Act 1997 applying to the company from that date. Prior to that date
the company was subject to the provisions of the Companies Act (Chapter 146)
which had applied in Papua New Guinea since 1964. The PNG Companies Act 1997 is
based on the New Zealand Companies Act 1993. See "Information on the Company -
History and Development of the Company".
Under the PNG Companies Act 1997, the business affairs of any company
incorporated in Papua New Guinea (including Lihir) shall be managed by, or
under the direction or supervision of, the board of directors of the company.
The board of this company has all the powers necessary for managing, and for
directing and supervising the management of, the business and affairs of the
company. This is nonetheless subject to limitations contained in the Companies
Act itself and any modifications, exceptions or limitations contained in the
company's constitution.
Under the Companies Act, a company is not permitted to enter into a major
transaction unless it is approved by a special resolution (requiring a 75%
majority) of shareholders. A major transaction is defined to mean any
transaction involving:
•
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; or
•
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.
There are other formal steps such as changing the company's constitution,
changing the company's name, approving the amalgamation of the company with
another company or putting the company into liquidation, which also require a
special resolution of shareholders.
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The Companies Act also provides that a meeting of shareholders may pass a
resolution relating to the management of a company, but, unless the
constitution of the company provides that the resolution is binding, a
resolution so passed is not binding on the board of directors. There is no
provision in the company's constitution which would make such a resolution
binding.
The company's constitution provides generally that the business and affairs of
the company shall be managed by, or under the direction or supervision of, the
board, to the exclusion of any meeting of shareholders.
The board of directors may appoint a managing director and delegate all or any
of its powers to him. Under the Companies Act, directors are permitted, in the
absence of the Board resolving otherwise, to disclose information obtained as a
director to persons they represent.
At the Annual General Meeting of the company on April 28, 1998 shareholders
approved a new constitution of the company, which provided for an increase in
the maximum number of directors from 11 to 12. The number of directors
appointed at April 20, 2002 was seven.
Under the PNG Companies Act 1997 at least one of the company's directors must
reside within PNG. The directors are not required to own any shares of the
company. Subject to resignations and appointments during the year, the term of
one third of the company's directors must end at each annual general meeting,
but the retiring directors may offer themselves for re-election.
Since January 1, 2002 the following directors have resigned:
John O'Reilly — November 1, 2002.
Jonathan Leslie — March 7, 2003.
Marc Soipang — March 7, 2003.
Since January 1, 2003 the following directors have been appointed:
Peter Cassidy — January 28, 2003
John O'Reilly — March 1, 2003.
Details of the directors at May 1, 2003 are as follows:
Year Appointed
Name
Position
As Director
Term Ends
Ross Garnaut
Chairman of Board
1995
2004
Chairman of Audit Committee
Chairman of Environmental and
Lihir Impact Committee
Chairman of Remuneration
and Nomination Committee
Neil Swan
Managing Director
2002
Geoffrey Loudon
Director
1995
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Year Appointed
Name
Position
As Director
Term Ends
John O'Reilly
Member of Audit Committee
2003
Director
Member of Environmental and
Lihir Impact Committee
Anthony Siaguru
Deputy Chairman of Board
1995
Member of Audit Committee
Member of Environmental and
Lihir Impact Committee
Member of Remuneration and
Nomination Committee
Peter Cassidy
Director
2003
At the Annual General Meeting on April 29, 2003, Ross Garnaut retired by
rotation and offered himself for re-election. He was re-elected by ordinary
resolution at the company's Annual General Meeting on April 29, 2003. Also
John O'Reilly and Peter Cassidy having been appointed since the last Annual
General Meeting retired in accordance the company's constitution and, being
eligible, offered themselves for re-election. They too were re-elected by
ordinary resolution at the company's Annual General Meeting on April 29, 2003.
Directors' Service Contracts Providing for Benefits on Termination of Contract
The services of Ross Garnaut are covered by a letter agreement dated May 19,
1995 that has been extended on two occasions, the latest period being to April
30, 2004.
Service contracts between Lihir and its directors make no provision for
benefits on termination.
Corporate Governance Practices
The board of directors of the company is responsible to shareholders for the
overall management of the company's affairs and the setting of the strategic
business direction of the company. The company has contracted with Lihir
Management Company, a subsidiary of Rio Tinto, to manage the corporate affairs
of the company and all aspects of the Lihir operation, including any future
expansion or exploration on Lihir Island. The management agreement is subject
to the overriding authority of the company's board of directors. Lihir
Management Company operates under a budget approved by the board and is subject
to various monetary limitations and other restrictions on its authority, which
are set out in the management agreement. Certain powers and functions remain
solely with the company's board of directors and are specifically excluded from
the scope of duties of Lihir Management Company, including:
•
determination of the company's treasury policies, including foreign currency and interest rate exposure;
•
determination of the company's risk management policies including insurance, gold price hedging and borrowing limits;
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•
determination of the company's accounting policies; and
•
engagement of auditors to review and report to the Board on the company's internal controls and compliance with statutory and regulatory compliance.
The company's board of directors has a commitment to maintain appropriate
corporate governance and to that end has committees listed below in place
during 2002, which form the basis of the board's risk identification and
management strategy.
Audit Committee
The company has an audit committee consisting of a majority of independent
Directors, which at the date of this annual report had the following members:
Ross Garnaut — Chairman of Committee
Anthony Siaguru
Geoff Louden
The Audit Committee has the following responsibilities:
•
Monitor relationships with both internal and external auditors of the company.
•
Approve the audit plan of the internal auditors.
•
Supervise financial risk management policy such as insurance and hedging.
•
Promote the company's relationship with regulatory bodies of a financial kind,
e.g
. the Bank of Papua New Guinea and the various Papua New Guinea taxation authorities.
•
Review all related party transactions on an ongoing basis, in particular, review of the operation of the management agreement between the company and Lihir Management Company.
The Audit Committee has no executive directors as committee members. However,
the Managing Director of Lihir Management Company, attends all meetings of the
committee as a participating adviser by invitation of the committee.
The internal auditors report directly to the Audit Committee and the Board.
The scope of the internal audit function is determined by the Audit Committee.
Environmental and Lihir Impact Committee
The company has an Environmental and Lihir Impact Committee that monitors the
environmental issues and social and other impacts of the company on Lihir
Island. The members of the Environmental and Lihir Impact Committee at the
date of this annual report are:
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Ross Garnaut  — Chairman of the Committee
Anthony Siaguru
Mark Soipang (resigned March 7, 2003)
John O'Reilly
Remuneration and Nomination Committee
The Remuneration and Nomination Committee of the Board has the following
members at the date of this annual report:
Ross Garnaut  — Chairman of the Committee
Anthony Siaguru
Jonathan Leslie (resigned March, 1 2003)
The terms of reference of the Committee are to:
•
Review remuneration of non-executive directors.
•
Review policies for the reimbursement of expenses of directors.
•
Devise criteria in relation to membership of the Board and its committees.
•
Review the membership of the board and its committees.
•
Nominate representatives of the board and its committees.
•
Devise policies relating to the appointment and retirement of non-executive directors.
The committee reports and recommends to the board on the above issues with the
final determination to be made by the Board.
D. Employees
The number of employees and contractors at the end of each year is summarized
below:
2002
2001
2000
Management
4
4
3
Commercial, human resources, corporate and
towns, site services, business development,
community and environment
249
199
197
Mining operations and mine technical
384
385
379
Plant operations and maintenance
341
374
366
Total Lihir employees
978
962
945
Total contractors
1,100
990
938
Total
2,078
1,952
1,883
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All but two of the employees as at end 2002 were based in Papua New Guinea,
either on Lihir Island or in Port Moresby.
All employees are employed under individual employment contracts rather than
labour awards, and all negotiations of conditions are held directly with the
employees concerned. There are no unions or employee associations active
amongst Lihir's workforce. Management continues to engage in a consultative
process with representatives of the workforce, which takes the form of monthly
meetings focussed on employee issues. These meetings allow employees to raise
for discussion any issues that may be of concern, and for management to provide
any relevant information. The outcomes of these meetings are communicated back
through the workforce through elected representatives. Daily meetings between
supervisors and their crews are also serve as a useful forum for the exchange
of information.
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E. Share Ownership
Pursuant the PNG Companies Act 1997 the directors have disclosed the following
interests in shares in the company and provided general disclosure of
companies, businesses and persons in which they are to be regarded as
interested:
Interest held by
Companies, business and persons in
director in shares
which the Director is to be
of Lihir Gold
Director
Nature of Interest
regarded as interested
Limited
Ross Garnaut
Chairman
Asia Pacific Economics Group Pty Ltd
50,000
(Chairman)
Chairman
Papua New Guinea Sustainable
Development Ltd
Chairman
Lonely Planet Publications Pty Ltd
Director
Maccullochella Pty Ltd
Director
Ok Tedi Mining Pty Ltd
Anthony Siaguru
Chairman
Pacific Re Limited
56,460
(Deputy Chairman)
Chairman
Pacific Rim Plantations Limited
(38,460
Chairman
PNG Water Limited
registered in
Chairman
Port Moresby Stock Exchange Limited
own name.
15,000 in wife
Wilhelmina's
Director
Kula Fund Limited
name, 1,000
Director
Minton Limited
in the name of
Director
Nautilus Minerals Limited
each son -
Director
South Pacific Post Limited
Steven,
Director
Steamship Trading Company Limited
Stanley and
Daniel)
Peter Cassidy
Director
Oxiana Resources NL
Director
Sino Gold Limited
Geoffrey Loudon
Chairman
L and M Mining Limited
143,840
Director
Sterilox Technologies Inc
Neil Swan
Director
Lihir Management Company Limited
John O'Reilly
Director
Lihir Management Company
Director
Rio Tinto Consultants Ltd
Director
Rio Tinto Technical Services Limited
Employee and Officer
Rio Tinto Plc and Rio Tinto Limited
Sir Anthony Siaguru was issued 23,460 shares in Lihir Gold Limited on February
14, 2000 as a Niugini Mining Limited shareholder and in consideration for the
transfer of his Niugini Mining Limited shares to Lihir Gold Limited. He held
12,500 Niugini Mining Limited shares prior to February 14, 2000. The shares
were issued as
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part of the merger of Niugini Mining Limited with Lihir Gold Limited by scheme
of arrangement. On March 31, 2000, he purchased 500 shares for K1.10 each in
name of Stanley Siaguru. On April 14, 2000, he purchased 500 shares for K1.04
each in the name of Stanley Siaguru, 1,000 shares for K1.04 each in the name of
Daniel Siaguru and 1,000 shares for K1.04 each in the name of Steven Siaguru.
No options over shares in the company are held by directors and officers of the
company. No arrangements are in place for providing the employees of Lihir
Management Company with shares or options over shares of Lihir.
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Item 7. Major Shareholders and Related Party Transactions
A. Major Shareholders
The distribution of Lihir's shareholdings as at March 31, 2003 was:
Range of Shares Held
Number of Shareholders
No of Shares Held
1-1,000
7,213
4,652,308
1,001-5,000
11,750
32,850,383
5,001-10,000
3,306
27,183,564
10,001 - 100,000
2,814
75,632,219
100,001 - over
188
1,002,015,741
Total
25,271
1,142,334,215
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The twenty largest registered shareholders at April 30, 2002 were:
Adjusted percentage
excluding shares
Rank
Name
Shares
Percentage
(1)
held by NML
(2)
1
National Nominees Limited
184,193,578
14.13
16.12
2
Rio Tinto Metals Limited
161,527,406
12.39
14.14
3
Niugini Mining Limited ("NML")
(3)
161,527,405
12.39
14.14
4
Westpac Custodian Nominees Limited
147,726,532
11.33
12.93
5
J P Morgan Nominees Limited
125,558,720
10.96
10.99
6
ANZ Nominees Limited
77,593,908
5.95
6.79
7
Mineral Resources Lihir Pty Ltd
77,169,431
5.92
6.76
8
Citicorp Nominees Pty Ltd
48,438,118
3.71
4.24
9
Rio Tinto Lihir Holdings Ltd
24,230,720
1.86
2.12
10
Commonwealth Custodial Services Limited
11,834,314
0.91
1.04
11
AMP Life Limited
11,003,706
0.84
0.96
12
HSBC Custody Nominees (Australia) Limited
10,871,980
0.83
0.95
13
The National Mutual Life Association of
9,787,628
0.75
0.86
Australasia Limited
14
Citicorp Nominees Pty Ltd <CFS Wsle.
9,071,862
0.70
0.79
Aust. Share Fund A/C>
15
Citicorp Nominees Pty Ltd <CFS Wsle.
7,295,370
0.56
0.64
Imputation Fund A/C>
16
Public Officers Super Fund
6,666,333
0.51
0.58
17
Citicorp Nominees Pty Ltd <CFS Wsle.
5,504,744
0.42
0.48
Gbl. Res. Fund A/C>
18
Tower Australia Limited
5,041,962
0.39
0.44
19
Citicorp Nominees Pty Ltd <CFS
3,785,085
0.29
0.33
Imputation Fund A/C>
20
Merrill Lynch (Australia) Nominees Pty Ltd
3,351,187
0.29
0.29
1,092,179,989
83.77
95.59
Note 1.
The percentages in this column reflect a denominator of 1,303,861,620
representing Lihir's total issued shares including the 161,527,405 shares owned
by Niugini Mining Limited.
Note 2.
The percentages in this column reflect a denominator of 1,142,334,215
representing Lihir's total issued shares excluding the 161,527,405 shares owned
by Niugini Mining Limited and subsequently converted to Class B shares.
Note 3.
The following table sets out, as of March 31, 2003, persons notified to the
company pursuant to the PNG Securities Act 1997 as substantial shareholders of
the company. Under the Securities Act 1997 a person is a substantial
shareholder if they have a relevant interest in 5% or more of a class of voting
share in Lihir Gold
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Limited. Changes of greater than 1% in the relevant interest of a substantial
shareholder must also be notified. The definition of "relevant interest" looks
not merely to beneficial ownership of a share but extends to and includes: 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; and possession of the
above powers by virtue of any trust, arrangement, agreement or understanding.
The total notified amount of voting securities owned by directors and officers
of the company as a group was 255,300 ordinary shares representing 0.000196% of
issued ordinary shares.
Name of Substantial Shareholder
Relevant interest
Percentage
(1)
Rio Tinto plc
185,758,126
16.26
Rio Tinto International Holdings Limited
185,758,126
16.26
Rio Tinto Overseas Holdings Limited
185,758,126
16.26
Rio Tinto Lihir Holdings Limited
185,758,126
16.26
Rio Tinto Metals Limited
185,758,126
16.26
Rio Tinto European Holdings Limited
185,758,126
16.26
Each of Rio Tinto plc's subsidiaries
other than Rio Tinto International
Holdings Limited, Rio Tinto Overseas
Holdings Limited, Rio Tinto Lihir
Holdings Limited, Rio Tinto Metals
Limited and Rio Tinto European Holdings
Limited
185,758,126
16.26
Mineral Resources Lihir Limited
77,169,431
6.76
Commonwealth Bank of Australia
57,960,753
5.07
M&G Investment Management Limited
M&G Limited
M&G Group Limited
Prudential plc
55,500,000
4.85
Note 1.
The percentages in this column reflect a denominator of 1,142,334,215
representing Lihir's total issued shares excluding the 161,527,405 shares owned
by Niugini Mining Limited and subsequently converted to Class B shares.
The shares held by Lihir's major shareholders command no different voting
rights to any other shares, other than the Class B shares owned by Niugini
Mining Limited which have no voting rights.
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American Depositary Shares and US Resident Shareholders
A portion of Lihir's ADSs are traded on the Nasdaq National Market. In the
United States, each ADS evidenced by an American Depositary Receipt represents
20 fully paid ordinary shares of the company. The listed ADRs are issued
pursuant to a Deposit Agreement in 1995 between the company and the Listed
Depositary — The Bank of New York.
On February 28, 2003, 1,615,040 ADSs (2002: 725,148) representing 32,300,800
ordinary shares were held by 18 (2002: 13) registered holders under the Nasdaq
- listed ADR program. The company also has a restricted ADR program following
the October 1999 placement of shares under which there are 400,000 ADS at
February 28, 2003 (2002: 470,000) representing 8,000,000 ordinary shares held
by 13 (2002: 14) registered holders. The restricted ADR are issued pursuant to
a Deposit Agreement entered in October 1999 between the company and the
Restricted Depositary — The Bank of New York.
Also on March 31, 2003, there were 61 holders of ordinary shares (2002: 65)
with declared addresses in the United States holding 763,875 (2001: 723,844)
ordinary shares. In addition, there are a number of United States shareholders
who hold beneficial ownership through nominee companies located outside the
United States.
Share Options
No options remained outstanding as at 31 December 2002.
There are no arrangements known to the company, the operation of which may at a
subsequent date result in a change in control of the company.
B. Related Party Transactions
Interests of Directors in Certain transactions
John O'Reilly is a Director of Lihir Management Company which has a management
agreement with the company whereby Lihir Management Company is required to
manage the corporate affairs of the company and all aspects of the Lihir
operation.
The socioeconomic structure of Lihir Island is divided into six major clans
representing the indigenous population of Lihir Island. Mark Soipang is a
senior member of one of those clans, the Tinetalgo clan, which has various
companies including Alia Ltd and Tinetalgo Investments Ltd of which Mark
Soipang is a director. Additionally, Mark Soipang is a senior member of the
Maron Hamlet, which was relocated from its land to make way for the mine. The
Maron Hamlet is represented by a company, Maron Ltd, of which Mark Soipang is a
director. As a leader on Lihir Island, Mark Soipang also is a director and the
Chairman of the Lihir Mining Area Landowners Association Inc. and a Director of
Lakaka Limited, which is one of the main business development companies on
Lihir Island and which is owned by the Lihirian clans and people. The company
has a number of contracts with the above parties. Lakaka Limited and its
subsidiaries have contracts from the company which include earthmoving services
and road maintenance. Lakaka Limited is a 50% owner of a joint venture
company, Aelium Ltd, which constructed the company and government housing at
Londolovit. Mark Soipang is a director of Aelium Ltd. The company has also
issued various sub-leases to Lihir Properties Ltd (receiver and manager
appointed), a subsidiary of Lakaka Limited, and approved the grant of further
sub-sub leases to joint venture companies of Lakaka Limited in the Commercial
Area at Londolovit and a residential block at Londolovit
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Heights. Mark Soipang is a director of Niolam Catering Services Ltd, which
operates the company's camps, including the catering and warehousing functions,
and which is partly owned by Lakaka Limited and by Tinetalgo Investments Ltd.
The company has issued a lease of land in the commercial area of Londolovit and
three residential blocks of land at Londolovit Heights on Lease for Mining
Purposes-34 to Maron Ltd. Those leases were provided as part of the company's
obligations on the relocation of the Maron Hamlet. The company has issued a
lease for a parcel of land in the Londolovit commercial area to Alia Ltd. The
company supplies office accommodation and a vehicle to the Lihir Mining Area
Landowners Association Inc. of which Mark Soipang is the chairman and which was
provided funding by the company during the year for its operating expenses.
Tinetalgo Investments Ltd owns a one-sixth interest in Kuridala Ltd to which
the company contributed funds and holds redeemable preference shares. The
above contracts and transactions involving entities with which Mark Soipang is
associated were in most cases entered into by Lihir Management Company for and
on behalf of the company and were fully disclosed and known to Lihir Management
Company at the time of entering the contract and transactions. Mark Soipang
did not take part in the decision to award the contracts and transactions. The
company is satisfied that the contracts were entered on arms length terms.
Mark Soipang resigned from the Lihir Gold Board on the March 7, 2003.
Lihir provided debt to the Lakaka group and to Kuridala during the year as
disclosed in note 10. There is no exposure to losses in these companies apart
from the credit risk exposure for amounts owed. All the amounts advanced are
deemed to be recoverable.
The company has contracted for the services of Dr Ross Garnaut as Chairman of
the company until April 30, 2004. The contract is with Dr Garnaut's family
company, Maccullochella Pty Limited, which employs him but Dr Garnaut has also
agreed to be bound by its terms.
Sir Anthony Siaguru, Deputy Chairman of the company, is employed in a
consulting capacity by Blake Dawson Waldron, who provide legal services to the
company.
The interests of the directors listed above were disclosed to the company prior
to the company entering into the relevant contracts. Other than in relation to
the management agreement with Lihir Management Company, the directors concerned
did not take part in discussions on or voting in relation to the company's
decision to enter into the contracts and directors are satisfied the contracts
are on arm's length terms.
C. Interests of Experts and Counsel
Not applicable.
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Item 8. Financial Information
A. Consolidated statements and other financial information
These have been incorporated in the financial statements section of this report
at Item 18.
Export Activities
Under the new refining arrangements with AGR Mathey, gold is now refined in
Australia under a toll treating arrangement. On the completion of the refining
process gold is credited to the company's bullion account for ultimate sale.
Legal or arbitration proceedings
In December 2000 the Company's wholly owned subsidiary — Niugini Mining
(Australia) Pty Limited — terminated a sales agreement for seven mining leases
located in North Queensland. The purchaser commenced an action against Niugini
Mining (Australia) Pty Limited in the Supreme Court of Queensland, seeking to
have the termination revoked and unspecified damages.
The action was struck out by the court in October 2001 because of the
purchaser's failure to prosecute its action against Niugini Mining (Australia)
Pty Limited. The purchaser is free to lodge a new action and threatened to do
so in mid-2002, however, at the time of publication, has not done so. In March
2003, Niugini Mining (Australia) Pty Ltd sold its North Queensland assets,
including the seven mining leases, to Kagara Pty Limited, which is aware of the
previous litigation.
In June 2001 Niugini Mining (Australia) Pty Limited became a party to a native
title claim over some of its mining tenements in North Queensland. The company
is currently arranging to withdraw from that native title claim following sale
of its relevant interests to Kagara Zinc Limited.
Niugini Mining Limited received claims for unspecified damages relating to the
decommissioned Mt Victor mine in Papua New Guinea. These claims date back
several years and the Company is seeking to have them removed from the court
list, as they have not been pursued. The Company believes from legal advice
obtained that neither of these claims has substance and, if required, intends
to defend both vigorously
Dividend Distributions
Lihir declared its maiden dividend of 2 Australian cents per ordinary share in
April 2003. The board will regularly consider future dividend distributions
and make returns to shareholders at a time and amount which, in the board's
opinion, the financial circumstances of the company justify.
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B. Significant Changes
No significant change in the state of the business has occurred since the date
of the annual financial statements as at December 31, 2002.
Item 9. The Offer and Listing
Since the global offering in October 1995, the ordinary shares have traded on
the Australian Stock Exchange Limited (ASX) and on SEAQ International, the
London Stock Exchange's system for trading international equity securities that
are not listed on that exchange and the ADSs have traded on the Nasdaq National
Market. The ASX is the national stock exchange in Australia.
The following tables sets forth for the periods indicated the highest and
lowest market quotations for ordinary shares reported on the Daily Official
List of the ASX and the highest and lowest prices for ADSs quoted on Nasdaq.
Each ADS represents 20 fully paid ordinary shares in Lihir.
By Fiscal Year
Ordinary Shares
American Depositary Shares
High
Low
High
Low
A$
A$
US$
US$
1996
2.59
1.46
40 3/4
21 7/8
1997
2.44
1.40
38 1/4
19
1998
2.76
1.46
36 3/8
18 3/4
1999
1.95
0.90
23 1/2
9 1/2
2000
1.12
0.52
13 3/4
5 1/2
2001
1.28
0.54
12 13/14
5 7/16
2002
1.65
1.02
19 1/8
11 1/2
By Quarter
Ordinary Shares
American Depositary Shares
Quarter Ending
High
Low
High
Low
A$
A$
US$
US$
1999
March 31
1.87
1.18
23 1/4
16 1/2
June 30
1.71
0.90
20
13 7/8
September 30
1.95
1.03
17 3/4
12 1/2
December 31
1.82
1.06
23 1/2
9 1/2
2000
March 31
1.12
0.63
13 3/4
7 5/8
June 30
0.71
0.52
7 3/4
6 1/8
September 30
0.78
0.58
9
6 1/4
December 31
0.69
0.53
7 4/9
5 1/2
2001
March 31
0.72
0.54
7 1/4
5 11/14
June 30
1.02
0.59
10 7/8
5 7/16
September 30
1.16
0.79
11 1/2
8 5/8
December 31
1.28
1.00
12 15/16
8 7/8
2002
March 31
1.62
1.18
16 1/2
12 1/8
June 30
1.65
1.15
19 1/8
12 1/2
September 30
1.38
1.02
15 3/4
11 1/2
December 31
1.49
1.06
16 9/16
12
2002
March 31
1.60
1.30
19 1/2
15.1/8
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By Month
Ordinary Shares
American Depositary Shares
High
Low
High
Low
A$
A$
US$
US$
November 2002
1.20
1.04
13 15/16
12 1/8
December 2002
1.49
1.12
16 9/16
12 1/2
January 2003
1.41
1.18
19 1/2
15 7/8
February 2003
1.60
1.34
18 7/16
15 11/16
March 2003
1.47
1.30
18 1/8
15 1/8
April 2003
The last reported sale price of the ordinary shares on the ASX on March 31,
2003 was A$1.35. The last reported sale price of the ADSs on Nasdaq on March
31, 2003 was US$16 5/16.
At March 31, 2003, the total market capitalization of the company (excluding
the shares held by Niugini Mining Limited) was A$1,324 million.
The company is also listed on the Port Moresby Stock Exchange (Market Code
"LHG").
The company's securities consist of ordinary shares. No options remain
outstanding. The shares have no par value. All issued shares are fully paid.
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Item 10. Additional Information
A. Share Capital
Not applicable.
B. Memorandum and Articles of Association
As a result of the promulgation of the PNG Companies Act 1997 the memorandum
and articles of association of Lihir have been replaced by a constitution. A
copy of the latter is lodged with the Registrar of Companies in Port Moresby,
Papua New Guinea and a copy is attached as Exhibit 1 to this annual report.
The constitution is summarized below. The company's objects and purposes are
no longer specifically defined. Companies incorporated in PNG are generally
accorded all the powers of a natural person.
PNG Companies and Securities Law
On March 27, 1997 the Papua New Guinea Parliament passed the Companies Act 1997
which, subject to six-month transitional provisions, replaced the Companies Act
(Chapter 146) that has applied in Papua New Guinea since 1964. The Act
commenced operation on March 2, 1998. At the Annual General Meeting of the
company held on April 28, 1998 shareholders approved registration of the
company under the PNG Companies Act 1997 and the company was registered
effective May 15, 1998, with the PNG Companies Act 1997 applying to the company
from that date. The PNG Companies Act 1997 is based on the New Zealand
Companies Act 1993. As part of the registration process, shareholders at the
Annual General Meeting of the company held on April 28, 1998 adopted a new
constitution in replacement of the articles of association and memorandum of
association of the company. The new constitution was modelled on the company's
then memorandum of association and articles of association. In general, the
changes under the new constitution either:
(i)  reflect changes made under the new Companies Act 1997 (e.g. the abolition
of par value of shares, the increased power for directors to make distributions
of money or property to members and the removal of the requirement that a
company have specific objects and powers); or
(ii)  take advantage of specific provisions of the new Act which allow the
company to take a course of action (e.g. 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 new Companies Act 1997 introduced significant changes to shareholders'
rights and duties and to the duties, liabilities and obligations of directors.
The PNG Securities Act 1997 also commenced operation on March 2, 1998. The
Securities Act 1997 governs the offering of securities to the public in PNG.
The Securities Act also brings key changes to corporate regulation in Papua New
Guinea. The Securities Act deals with the requirements for a prospectus
prepared in connection with the offering of securities. The Securities Act
also contains a range of laws regulating the operation of the securities market
in PNG including; stock market manipulation laws; false trading and market
rigging transactions; false or misleading statements in relation to securities;
fraudulently inducing persons to deal in securities; and disseminating
information about illegal transactions. The Securities Act 1997 contains a
prohibition against insider trading. The Securities Act also contains
provisions dealing with the disclosure of
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substantial shareholdings which require the giving of notice where a
shareholder has a relevant interest in at least five percent of the shares of a
listed company. A substantial shareholder is also required to give notice of
changes in his or her relevant interest of one per cent or more in the relevant
class of shares. There are also provisions to allow a company to require the
disclosure of the beneficial owners of shares in the company. The substantial
shareholder provisions and the provisions dealing with the disclosure of
beneficial interests have been in effect in relation to the company since
September 28, 1998.
A PNG takeovers code, approved under the provision of the Securities Act has
also applied to the company since September 28, 1998. The fundamental rule
under the Takeovers Code prevents any person from having a relevant interest of
more than 20% of the voting rights in a target company, except in a manner
permitted by the Code. There are no controls below the threshold of 20%. The
definition of relevant interest relevant to the Takeovers Code and the
substantial shareholder provisions of the Securities Act 1997 looks not merely
to beneficial ownership of a share but extends to and includes:
•
the power to control the exercise of any right to vote attached to a voting share
•
the power to acquire or dispose of the voting share
•
or having the above powers by virtue of any trust, arrangement, agreement or understanding.
Constitution
The following is a summary of the main points of the company's constitution.
References to clauses refer to clauses in the constitution.
•
The company is incorporated and registered in Papua New Guinea (Number C1-23423) and is a registered foreign
company in Australia (ARBN 069 803 998). Under section 17 of the Companies Act 1997 (PNG) 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 Act, the Official Listing Rules of the Australian Stock Exchange permit
and the Board does not otherwise determine.
•
The constitution contains provisions for the remuneration of directors (including reimbursement of expenses), the
indemnification of directors in respect of certain liability or for costs incurred in defending or settling any claim or
proceedings relating to such liability, and for effecting insurance for directors to the extent permitted under the Act.
These are general powers of the company which may in the normal course be exercised by a resolution of the board. An
interested director who has declared his or her interest would be entitled to vote on any such resolution unless the board
has determined that the director should not exercise any power in relation to the matter. The interested director is not
entitled to vote on a resolution to make that preliminary determination.
•
There are no specific provisions relating to borrowing powers in the constitution. Clause 20.1 provides that the board has
all necessary power for managing, and for directing and supervising the management of, the business and affairs of the
company to the exclusion of the Shareholders and in accordance with clause 21.9 every resolution of the board is decided by
a majority of votes. Therefore, the borrowing by the company is determined by a majority decision of the board.
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•
An exercise of the borrowing power may in certain circumstances be subject to the provisions of the 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 to 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.
•
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.
•
Clause 5.6 provides that where a call in relation to a share is due and payable and not paid the shareholder has
no right to vote.
•
Under clause 15.3, one third of the directors 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. The company does not have any partly paid shares on issue.
•
Clause 10A.2(d) provides that the Class B shares are redeemable at the option of the company for consideration of
K100 per million of those shares.
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•
Clause 2.6(b) provides that the company is authorised to redeem any redeemable shares subject to the provisions of
the Listing Rules and the business rules of securities clearing house of Australia.
•
There are no provisions in the constitution in regard 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 fixed time. The company does not have any partly paid
shares on issue. The constitution does not expose the shareholders to any liability to further capital calls by the
company.
•
There are no provisions discriminating against any existing or prospective holder of such securities as a result
of such shareholder owning a substantial number of shares in the constitution.
•
Under the PNG 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 special meeting as provided by section 102(b) of
the 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 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 a special resolution and, if required by the Australian Stock Exchange
Listing Rules, 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
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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.
•
There are no limitations on rights to own securities, including the
rights of non-resident or foreign shareholders to hold or exercise
voting rights on the securities imposed by foreign law or by the
charter or other constituent document of the company in the
constitution.
•
There are no provisions in the constitution that would have an effect
of delaying, deferring or preventing a change in control of the
company and that would operate only with respect to a merger,
acquisition or corporate restructuring involving the company (or any
of its subsidiaries).
•
There are no provisions in the constitution governing the ownership
threshold above which shareholder ownership must be disclosed.
•
The company is incorporated, and has its principal activities, in
Papua New Guinea. As such it is subject to the Act, the Securities
Act of Papua New Guinea and the Takeovers Code under the Securities
Act. The general effect of this legislation is referred to elsewhere
in this Form 20-F.
•
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. The conditions in this regard
are no more stringent than is required by law. There are no
pre-emptive rights of existing shareholders.
C. Material Contracts
Lihir Management
General.
At December 31, 2002 Lihir Management Company employed 978 full-time
employees for the Lihir operation. Lihir Management Company has entered into
the Technical Support Agreement with Rio Tinto pursuant to which it is able to
periodically supplement its expertise by drawing on experienced engineering,
construction and operations personnel from other Rio Tinto owned or controlled
businesses from around the world. See "Technical Support Agreement" below.
The Lihir Management Company team includes engineering, construction and
operations personnel. The senior members of the management team have extensive
experience in mining operations.
Management Agreement.
While the company's board of directors has ultimate
control and responsibility for all of the company's operations and the exercise
of all the company's powers and rights, pursuant to the management agreement
the board of directors has delegated to Lihir Management Company the authority
and responsibility to manage the corporate affairs of the company, the
construction and operation of the Lihir operation, any exploration activities
undertaken by the company in the Lihir Group of islands and any other
operations and activities of the company. Subject to the restrictions described
below, Lihir Management, in particular, is permitted to enter into contracts on
behalf of the company and to pay, out of the company's funds, all costs and
expenses incurred by it in connection with its role as manager of the Lihir
operation, including, without limitation, the salaries and other compensation
payable to Lihir Management Company personnel and the monthly management fee
referred to below. In addition, Lihir Management Company is permitted to
contract for the performance of its duties under the management agreement;
provided, however, that any contracts with a related
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corporation of the manager must be on ordinary commercial terms and at a cost
no greater than that of obtaining the services from a contractor independent of
the related corporations.
Lihir Management Company's discretion to manage the Lihir operation is limited
in certain respects. Lihir Management Company cannot, without the approval of
the company's board, incur any individual capital expenditure in excess of
US$3,000,000 except in accordance with a budget approved by Lihir's board of
directors or incur any expenditure either in excess of 110% of an approved
budget (except in emergency circumstances) or in excess of US$10,000,000 other
than in accordance with an approved budget. In addition, Lihir Management
Company may not at any time, without the approval of the company's board:
•
approve any contract with a value greater than US$1,000,000 with a corporation related to it or with any other party for a term of more than one year and a value in excess of US$5,000,000
•
approve any financial or operating lease for terms exceeding one year with capitalized values in excess of US$5,000,000
•
settle any litigation or arbitration that would require the company to pay any amount in excess of US$500,000
•
dispose of any of the company's property having an original cost, or being sold at a price, greater than US$5,000,000
•
dispose of the special mining lease or any portion or all of the exploration license
•
suspend operations or resume operations after any suspension except as permitted by the mining development contract
•
make any changes in the approved proposal for development except as permitted thereunder
•
undertake any business or exploration not contemplated in the approved proposal for development
•
make voluntary pre-payments or alter the terms of any debt financing facility of the company.
All dollar amounts referred to in this paragraph are increased as of January 1
of each year (beginning January 1, 1997) by the application of the implicit
price deflator of the U.S. Gross National Product.
The board of directors has delegated all of its responsibilities with respect
to the company other than the responsibility to:
•
nominate directors to the board of directors and to appoint the chairman of the board of directors
•
commit the company to raise equity or to borrow funds and to approve any documents under which securities may be issued
•
determine treasury policies including foreign currency and interest rate exposure as well as to determine risk management policies
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•
approve interim and annual reports, engage auditors and set accounting policies
•
determine dividend policies and approve dividends
•
engage auditors to review and report to the board on the company's internal controls and compliance with statutory and regulatory requirements.
Lihir Management Company is currently paid a monthly management fee equal to
the greater of US$250,000 (adjusted annually by the implicit price deflator for
the US Gross National Product) or 1.5% of the average monthly operating costs
of the Lihir operation during the preceding three months. In addition, Lihir
Management Company is entitled to receive 1% of all costs incurred on any
expansion involving capital expenditures greater than US$50 million. For
purposes of the foregoing, all capital and operating costs are calculated
excluding the management fee paid or payable to Lihir Management. The
company's obligation to pay the management fee will be suspended 12 months
after mining operations have been suspended as a result of certain specified
events of force majeure and one month after mining operations are suspended for
any other reason.
The appointment of Lihir Management Company as the manager of the Lihir
operation shall continue during the term of the mining development contract
unless the management agreement is earlier terminated. The company can
terminate the management agreement for specified reasons, including certain
events of insolvency of Lihir Management, any breach by Lihir Management
Company of the terms of the management agreement or if Rio Tinto (directly or
indirectly) ceases to hold at least 15% of the issued shares of the company or
Lihir Management Company ceases to be a wholly owned subsidiary of Rio Tinto
or, upon six months notice, after the management agreement has been in effect
for 20 years. In addition, Lihir Management Company may terminate the
management agreement upon six months notice after the later of 10 years after
the date of the agreement and the repayment of all loans to the company, the
terms of which require management of the Lihir operation by a related
corporation of Rio Tinto.
The management agreement provides that none of Lihir Management Company, Rio
Tinto, subsidiaries of Rio Tinto, or any of their respective directors,
officers, employees, agents and representatives shall be liable to the company
for, and all such entities and persons are indemnified and held harmless by the
company against any costs, losses, claims, damages or liabilities
(collectively, "Losses") incurred, suffered or done in the course of the
discharge of or arising in any way from, or in connection with the failure by
the manager to discharge its duties under the management agreement, unless they
result from the manager's willful omission or willful misconduct (each as
defined therein). No such liability can result from a breach of the management
agreement if the breach would not have occurred if Lihir Management Company had
not acted upon or omitted to act following the instructions of or in accordance
with any decision or determination by the board of directors. The company is
indemnified by Lihir Management Company for losses that are the result of the
manager's willful omission or willful misconduct.
Lihir's lenders have required as a condition of financing that the Lihir
operation continue to be managed by Rio Tinto or one of its wholly owned and
controlled affiliates. This is a condition to borrowings under both the
previous loan agreement and the current syndicated facility agreement, and any
failure by Rio Tinto to wholly own or control Lihir Management Company will
constitute a review event under the syndicated facility agreement.
Guarantee of Financial Obligations under Management Contract.
Lihir Management
Company is a wholly owned subsidiary of Rio Tinto Western Holdings Limited,
which is wholly owned by Rio Tinto plc. Rio Tinto Western Holdings Limited
issued a guarantee dated May 22, 1995, in favor of Lihir, of the financial
obligations of Lihir Management Company under the management agreement. The
guarantee may not be terminated by the guarantor while Lihir Management Company
has any financial liability to the company under the management
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agreement. The guarantee does not apply to financial obligations arising from
acts or omissions of Lihir Management Company after Lihir Management Company
has ceased to be a subsidiary of the guarantor provided the guarantor has
procured an acceptable replacement guarantee from another guarantor acceptable
to the company. The guarantee is not a guarantee of Lihir Management's
performance under the management agreement.
Technical Support Agreement.
Arising from the technical support agreement, Rio
Tinto has agreed to provide to Lihir Management Company from its own resources,
or the resources of other members of the Rio Tinto Group, upon Lihir
Management's request, all advice and personnel as may be required to enable
Lihir Management Company to discharge its duties as manager under the
management agreement.
In the technical support agreement, Rio Tinto has agreed to provide a variety
of personnel to assist Lihir Management. At a flat rate (subject to increases
for inflation) of US$600 per person per day (plus travel and accommodation
costs), Rio Tinto will provide contract services for such matters as ore
reserves, mine engineering, geothermal issues, metallurgy, general engineering,
infrastructure and financial analysis. In addition to these contract services,
Rio Tinto provides support for Lihir Management's treasury, accounting, legal,
mine planning, environment, financing, risk management and other such matters.
For these services Rio Tinto is reimbursed for out-of-pocket travel and
accommodation expenses. Rio Tinto also, from time to time, transfers for a
specified period personnel to Lihir Management Company to serve as senior
management and to perform certain administrative functions and is entitled to
receive from Lihir Management Company an amount equal to the salary and
statutory social security charges in respect of such personnel. The technical
support agreement will remain in force until the termination of the management
agreement or until Lihir Management Company ceases to be a subsidiary of Rio
Tinto.
PNG Mining Laws
The principal PNG mining laws are the PNG Mining Act, the Mining (Safety) Act
and the Regulations under these acts. The PNG Mining Act provides that "all
minerals existing on, in or below the surface of any land in PNG, including any
materials contained in any water lying on any land in PNG, are the property of"
the PNG Government. The PNG Mining Act also provides for a system of licenses
and leases, pursuant to which persons are permitted to explore for minerals,
develop mines and extract mining products. The Mining (Safety) Act provides for
the regulation and inspection of mines and associated works.
In 1990 and 1991, actions were brought in the PNG National Court challenging
the constitutional validity of the prior Mining Act on the grounds that the PNG
Government's ownership of minerals under privately owned land resulted in an
unjust deprivation of property. The actions were dismissed on procedural
grounds and thus the merits of the challenge were never decided. When the PNG
Mining Act was enacted in June 1992, provisions were included in an attempt to
clarify the constitutional status of any compulsory acquisition of property, or
deprivation of the use or possession of property, which may be effected by or
under the new PNG Mining Act.
The company has received advice from its PNG counsel, Blake Dawson Waldron, to
the effect that even if the Special Mining Lease or Exploration License were
determined to result in an unjust deprivation of property, the landowner's
recourse would be an action for compensation against the PNG Government and
that the validity or legality of the grant of the Special Mining Lease or
Exploration License could not be successfully challenged for this reason.
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The principal mining rights for large-scale operations under the PNG Mining Act
are exploration licenses and special mining leases. An exploration license
confers the exclusive right to carry out exploration for minerals for a
two-year period over a defined area. The holder of an exploration license is
required to conduct certain minimum agreed exploration activities during the
term of the license. Assuming it complies with the terms of the exploration
license and submits an acceptable program for the next period, the holder can
generally expect the license to be renewed for additional two-year periods.
However, the holder has no legal right to require such an extension. A mining
lease with respect to property covered by an exploration license can only be
granted to the holder of the license, although the PNG Government is under no
obligation to issue a mining lease and could simply allow the exploration
license to lapse, in which case a mining lease for the property could be
granted to another person.
A special mining lease gives tenure to carry out construction and operations.
It can be granted for a term not exceeding 40 years, and may be extended for
periods of up to 20 years each. Special mining leases can only be granted
after a mining development contract has been negotiated and entered into with
the PNG Government and the PNG Minister for Mining and Petroleum has approved
the proposal for development. In addition, before the land is occupied for
mining purposes, agreement must be reached with the landowners on appropriate
compensation. The holder of the special mining lease is then entitled to the
exclusive occupancy for mining and mining purposes of the land over which it is
granted and owns all minerals lawfully mined from that land. Ownership of
minerals thus passes from the PNG Government to the holder of the special
mining lease at the point when the minerals, or the mineral bearing ores, are
extracted from the ground.
The holder of a special mining lease is obligated to pay a royalty to the PNG
Government equal to 2.00% of either the FOB value of the minerals, if they are
exported without smelting or refining in PNG, or the net smelter returns from
the minerals, if they are smelted or refined within PNG. See "Operating and
Financial Review and Prospects".
Related Agreements with PNG Government
Exploration License.
The Exploration License, originally issued to the joint
venture, has been renewed on six occasions since its original issue in 1983,
the most recent extension being made from March 31, 2000 and expiring on March
31, 2002. This license is in the process of renewal. The Special Mining Lease
has been carved out of the area previously covered by the Exploration License.
For a discussion of exploration licenses generally, see "PNG Mining Laws"
above.
Special Mining Lease.
The company holds the Special Mining Lease which gives it
the exclusive right to mine and produce gold and other minerals from the area
of the Luise Caldera immediately adjacent to Luise Harbor, including the
proposed site of the processing plant on Putput Point. It also holds subsidiary
mining rights elsewhere on Lihir Island and an Exploration License which gives
it the exclusive right to explore for gold and other minerals over the rest of
Lihir Island, including Luise Harbor.
The Special Mining Lease is governed by the Mining Development Contract. The
Special Mining Lease can be terminated only if the Mining Development Contract
is properly terminated.
The Special Mining Lease was originally issued to the joint venture on March
17, 1995. It has a term of 40 years, and, under the Mining Act, may be renewed
for subsequent periods of 20 years each at the discretion of the PNG
Government. The Lihir operation is currently expected to be completed before
the expiration of the Special Mining Lease.
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Mining Development Contract.
The company and the PNG Government entered into
the Mining Development Contract relating to the Lihir operation on March 17,
1995.
In the Mining Development Contract, the company agreed to use its best efforts
to build and operate the Lihir operation as specified in the Approved Proposal
for Development. The company is permitted to modify the Approved Proposal for
Development without seeking the PNG Government's permission as long as the
modification substantially complies with the Approved Proposal for Development
submitted by the company. In addition, the PNG Government will be deemed to
have approved all modifications which do not substantially comply with the
Approved Proposal for Development if they do not object to such a modification
within fifteen days of receiving notice of such a change. The PNG Government
has agreed it will not unreasonably withhold its approval of any modification,
and all disagreements are subject to international arbitration. The company has
the right to suspend its operations at any time if, after notice to and
consultation with the PNG Government, the company's revenues from the Lihir
operation for the three months immediately preceding the date of the notice are
less than the sum of the royalties and operating costs. However, the company
must immediately (and periodically thereafter until the resumption of
operations) report such suspension to the PNG Government and must maintain the
Lihir operation's assets in good order. After three years of suspended
operations, the PNG Government can compel the company to resume the Lihir
operation unless an independent expert determines that the Lihir operation is
still not economically viable. The PNG Government may raise the issue again 12
months after any such determination by an independent expert.
Under the terms of the Mining Development Contract, between three to five years
after the commencement of commercial production the company must commission and
complete within 12 months a study into the feasibility of an expansion of the
Lihir operation at a capital cost of at least US$100 million (as adjusted by an
inflation factor) and it must discuss the results of this study with the PNG
Government. If the company chooses not to proceed with the expansion, the PNG
Government may at some later date, on 12 months notice, require a second
expansion feasibility study to be conducted by the company. While the company
ultimately has the right to decide whether or not to pursue any such expansion,
if it decides not to pursue such an expansion, it has undertaken to stockpile,
for at least two further years, all ore not immediately processed that has a
grade in excess of 1.6 g Au/t. The PNG Government has indicated that after
this two year stockpile of low grade ore has been created, it will permit the
disposal of all material below a break-even cut-off grade.
The Mining Development Contract governs the ability of the company to finance
the Lihir operation, to retain sales revenues in foreign currency and to make
payments and distributions in foreign currency. See "PNG Foreign Investment
Laws and Exchange Controls".
The PNG Government has agreed to permit the company to import into PNG all
materials necessary to construct and operate the Lihir operation and that any
taxes or duties will be applied to these materials on a non-discriminatory
basis. In addition, it has agreed to expeditiously approve the work permits and
visas of any expatriate worker needed to work at the Lihir operation.
The PNG Government has also agreed to permit the company to export and market
its mine products as it chooses, free of any export duty. Such marketing must
be made on an arm's length basis and must comply with PNG Government notices
prohibiting sales to buyers in certain jurisdictions on the grounds that such
sales may cause PNG to breach international law or may be prejudicial to the
national security or international relations of PNG.
The Mining Development Contract contains several provisions requiring the
company to hire local workers and use local companies. The company must
provide for the training of Papua New Guineans and the replacement of
expatriate employees with Papua New Guineans. In procuring material, equipment
and services for the operations, the company must give certain preferences to
Papua New Guinean contractors and suppliers. The
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company must include Papua New Guinea contractors and suppliers in all requests
for bids where the contractor or supplier has the proven ability to perform
similar work within the required time period. If the company receives a bid
from one of these Papua New Guinean contractors or suppliers, it must accept
the bid, if it meets the specifications, is competitive in cost with
international sources and meets the quality, delivery and service requirements
of the Lihir operation. In addition, the company must encourage the
development of local business which might be derived from the project, by
implementing an approved business development plan. Finally, the company may
be required to have up to one-third of its mine products refined at a refinery
located in PNG, provided that the refineries have the capacity and offer
competitive terms and conditions.
Under the terms of the Mining Development Contract, the PNG Government and the
company can modify the EP only under certain conditions. See "Environment -
Environmental Plan".
The Mining Development Contract also contains provisions permitting the PNG
Government to purchase any of the installations or infrastructure that are to
be built by the company in connection with the Lihir operation, excluding any
facilities directly used in the mining and processing of the ore, any roads
within the mining site and any administrative buildings or housing. The PNG
Government may elect to either finance the construction of these facilities or
purchase these facilities after their construction by the company. If the PNG
Government decides to finance the building of these facilities, Lihir
Management Company will be responsible for hiring the contractors and
supervising the work to its standards but the PNG Government will pay for and
own the facilities and it may impose a fee on the company for the use of the
facilities, the amount of which is subject to arbitration before a designated
expert if no value can be agreed. If the PNG Government decides to purchase
these facilities after their construction by the company, the sales price will
be equal to residual value after depreciation. If this occurs, the PNG
Government will pay the purchase price in an annual installment equal to the
amount of depreciation the company could have claimed if it still owned the
property. The PNG Government has agreed that this annual payment will be
treated as a capital receipt for PNG income tax purposes. After any such
purchase, the company will be obligated to make an identical payment to the PNG
Government as a usage fee for the property, which the PNG Government has agreed
will be treated as a deductible outgoing for PNG income tax purposes.
The Mining Development Contract may be terminated by the PNG Government only if
the Special Mining Lease expires and is not renewed, the company surrenders the
Special Mining Lease (other than for the renewal or extension thereof or for
the issuance of a new Special Mining Lease), the company abandons the Lihir
operation, or if the company materially defaults in the performance of its
significant obligations under the Mining Development Contract. These
significant obligations include the company's obligations:
•
to construct the mine and commence operations in accordance with the Approved Proposal for Development (including the
environmental plan)
•
not to incur debt in violation of certain coverage tests
•
to convert its foreign currency revenues into Kina, subject to certain exceptions
•
not to keep gold in inventory for a period greater than three months without placing in its Kina bank account an amount
equivalent to the cash value of such gold
•
to comply with PNG Government notices forbidding certain sales of gold
•
to comply with its various obligations to hire PNG employees or suppliers or contractors
•
not to suspend its operations other than as permitted by the Mining Development Contract
•
to comply in all material respects with the EP.
The PNG Government must begin any termination of the Mining Development
Contract by giving the company a default notice. If the default described in
the notice is not cured within 180 days, the PNG Government has the right to
deliver a termination notice which will terminate the agreement and the Special
Mining Lease 30 days
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later. If the company contests the grounds for the issue of a default notice,
or there is a dispute as to whether a default has been cured, the matter shall
be submitted to arbitration under the United Nations Commission on
International Trade Law Rules. The PNG Government may not deliver a
termination notice to the company while the grounds for the issue of a default
notice are in the arbitration process and any previously delivered termination
notice shall be suspended once an arbitration proceeding commences. If prior
to the date set for termination, a receiver, manager or other administrator is
appointed to act on behalf of any banks in connection with permitted debt
finance, termination cannot occur for at least two years as long as the
administrator complies with the Lihir operation agreements and prevents
deterioration in the Lihir operation facilities.
Except for those required to be referred to a special expert, all disputes
under the Mining Development Contract must be arbitrated under the Arbitration
Rules of the United Nations Commission on International Trade Law. The PNG
Government has waived its immunity with respect to enforcement of arbitration
awards. The Mining Development Contract is governed by PNG law.
PNG Government Participation
The PNG Government has a policy of obtaining an option to acquire, at cost,

equity participation of up to 30% in all mining projects located in PNG. The
PNG Government acquired a 30% interest in the joint venture on March 17, 1995
through Mineral Resources Lihir (MRL). MRL is a wholly owned subsidiary of
Mineral Resources Development Company Limited, or MRDC, a PNG company wholly
owned by the PNG Government. MRL exchanged its interest in the joint venture
for an indirect interest in 30% of the ordinary shares of the company
outstanding immediately prior to the consummation of the global offering.
Following the offering MRL held a total of 154,338,862 ordinary shares. At
April 30, 2000 MRL held 77,169,431 ordinary shares, all held as trustee for the
Lihirian Equity Trust. MRL must remain as trustee of the Lihirian Equity Trust
until such time that the total cost to and indebtedness incurred by MRL for the
purchase of the Lihirian ordinary shares together with interest and costs (the
"Lihirian Share Purchase Debt") is fully repaid and discharged. After that
time, the Lihirian Equity Trust requires that the Lihirian ordinary shares or
any dividends from such shares must not be sold, charged, mortgaged or
encumbered in any way whatsoever and are maintained for the purposes set out in
the Lihirian Equity Trust.
Under the State Equity Acquisition Agreement dated March 17, 1995 the PNG
Government expressly waived any rights it might otherwise have to acquire an
equity interest in any additional mineral discoveries made by the company on
Lihir Island pursuant to the Exploration License (or any extension or renewal
thereof) in recognition of the fact that it has already been given the
opportunity to participate in such discoveries through its indirect equity
interest in the company. In connection with an equity offering to institutions
on October 7, 1999, Lihir granted an option to MRL (as trustee on behalf of
the Lihirian people) to purchase up to 12,531,170 ordinary shares in the
company. MRL did not exercise the option prior to its expiry date on January
31, 2000. The option has therefore lapsed.
Financing Agreements
The company funded a portion of the construction of the Lihir operation
pursuant to a loan agreement, dated August 18, 1995, between the company and
the 26 banks named therein. The banks agreed to a loan of up to US$300
million, which was drawn down in installments to finance the costs of
developing the Lihir operation,
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initial working capital and operating costs and certain other expenses,
including interest on the loan, certain insurance premia and certain financing
costs.
This loan agreement and supporting bank financing agreements were terminated by
agreement on November 22, 2000 and replaced by a new syndicated facility
agreement. The new loan is in the form of a US$50 million revolving credit
facility arranged and underwritten by ABN-AMRO Australia Limited. Commonwealth
Bank of Australia, Deutsche Bank AG, Macquarie Bank Limited and SG Australia
Limited are participating with ABN-AMRO Australia Limited in this facility.
The following is a summary of certain provisions of the transaction documents
for the syndicated facility agreement.
Lihir has only one other financing arrangement, which was originally a US$26.5
million facility from the European Investment Bank, dated February 15, 1996.
This EIB financing is also summarized below.
The following summaries do not purport to be complete and are qualified in
their entirety by reference to all of the provisions of the respective
agreement documents, including the definitions used in those agreements.
Syndicated Facility Agreement  — overview
The US$50 million loan together with US$43 million cash generated by the
restructure of Lihir's hedgebook was used to repay the residual balance of
US$90 million on the previous loan agreement. The overall interest rate
reduced from 4.8% over LIBOR in the previous loan agreement to 2.9% over LIBOR
under the new syndicated facility. The new loan expires in June 2005.
The facility limit reduces in increments as follows:
June 30, 2003
US$10 million
June 30, 2004
US$10 million
June 30, 2005
US$30 million
Syndicated Facility Agreement — Documentation, Terms and Conditions
• Purpose: The available finance must first be used to repay all sums owing
under the existing senior debt facility. The US$50 million revolving credit
would then be available for general corporate purposes, including the
repayment of indebtedness and payment of dividends or return of capital to
shareholders.
• Pricing:
Interest margin
1.90
%
Political risk insurance margin
1.00
%
In certain limited circumstances changes in law and official regulations
could increase the interest margin.
• Prepayment: The facility can be repaid on any interest payment date
without penalty or at any other time on payment of interest period break
costs, subject to two day's notice. The undrawn commitment may be cancelled
without penalty on ten day's notice.
• Security: The lenders and hedge providers have the benefit of a fixed and
floating charge over the assets of
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Lihir. Lihir will require the consent of Mineral Resources Development
Corporation (MRDC), EIB and any surviving secured parties (including hedge
providers) to renegotiate or increase its secured debt. The amount of
secured gold hedging can be increased to 80% of proven and probable reserves
and additional hedge providers can be introduced without the consent of the
secured parties.
• Conditions Precedent: In addition to the consent of MRDC and EIB to
refinance its existing senior project debt facility, the lenders needed to
be satisfied with the results of normal technical and legal due diligence.
Political risk insurance satisfactory to the facility agent needed to be
available for drawings under the facility.
• Representations and Warranties: Lihir was required to make customary
representations and warranties, including confirmation of compliance in all
material respects with the 1998 World Bank Environmental, Health and Safety
Guidelines, on the day of signing the US$50 million syndicated facility
agreement. Certain of these representations and warranties need to be
repeated every six months.
• Undertakings: Undertakings given by Lihir included:
•
compliance with the 1998 World Bank Environmental, Health and Safety Guidelines;
•
restrictions on Lihir's ability to incur additional financial
indebtedness and to create additional security interests over its
assets;
•
maintaining gold price hedging between a minimum agreed
profile and 80% of proven and probable reserves; and
•
providing to the facility agent and independent engineer each
year the mine plan and cash flow projections used to calculate debt
service cover ratios for financial covenants.
• Distributions to subordinated lenders and shareholders: If at December 31
and June 30 each year, the debt service cover ratio for the following 12
months is greater than 1.25 and the life of mine debt service cover ratio is
greater than 2.5, Lihir would have the right to withdraw cash in excess of a
US$15 million minimum liquidity balance from the secured accounts.
• Events of Default: In addition to the normal default provisions relating
to non payment, financial distress, misrepresentation, cross default and
breach of undertakings, the agreement includes default provisions covering
material adverse change, expropriation, war and political violence and
exchange control.
The US$50 million facility agreement also includes financial covenants that
would trigger default if at December 31 and June 30 of each year the debt
service cover ratio for the next twelve months is less than 1.0 or the life
of mine debt cover ratio is less than 1.5.
If an event of default is continuing the lenders, acting on majority
consent, may cancel the revolving credit commitment and accelerate repayment
of the loan.
• Review Events: If, without consent of the agent (acting on the
instructions of all the lenders), Rio Tinto sells in whole or in part its
current shareholding in Lihir or the manager of the project ceases to be a
wholly owned subsidiary of Rio Tinto, the Agent may give notice to Lihir,
within 21 days of becoming aware or being notified of such an event:
•
requiring the US$ 50 million revolving credit be immediately
restructured in a manner acceptable to the Agent; or
•
requiring the US$ 50 million revolving credit be repaid and
canceled within 180 days from such notification.
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EIB Financing — Own Resources Finance Contract
Pursuant to finance documents entered into among EIB, MRDC and the company on
February 15, 1996, EIB agreed to lend funds in an amount of 25 million ECUs to
MRDC, such funds to be on-lent to Lihir for the financing of the Lihir
operation pursuant to an on-lending agreement between Lihir and MRDC. Under
these finance documents, the credit was required to be linked to past or
planned expenditures in connection with the metallurgical plant or the oxygen
plant described in the technical description attached thereto. Lihir drew the
entire funds during the 1997 year which were used to fund the purchase of the
oxygen plant and processing equipment. Although the funds are lent to MRDC,
the credit was disbursed directly to Lihir in US Dollars in the amount of
approximately US$26.5 million.
Interest on funds lent to MRDC under the EIB finance documents accrues at a
rate equal to the average of the rates applicable to comparable loans made by
the EIB on the date of the relevant disbursement notice of 3%. The interest
rate accruing on amounts on-lent by MRDC to Lihir under the on-lending
agreement accrues at an annual rate equal to 8.42% which is the sum of the
interest rate payable by MRDC to EIB, the annual rate subsidy of 3.42%, and a
margin of 2%. The portion of interest payable under the on-lending agreement
which corresponds to the interest rate subsidy will be paid by or on behalf of
MRDC to the New Ireland Trust Fund in order to fund the development or
maintenance of physical or social infrastructure projects for the benefit of
the population of New Ireland province.
The finance documents contain, among others, undertakings from the company with
respect to use of proceeds, completion of the Lihir operation, financing of
cost overruns without recourse to the EIB, insurance, maintenance of the Lihir
operations facilities, operation of the mine, shareholding and lending, future
operations, regular reporting and environmental reporting.
The on-lending agreement was signed on December 19, 1997 which set forth the
rights and obligations of MRDC and Lihir with respect to amounts on-lent to
Lihir by MRDC. In order to comply with the terms of the loan agreement, the
payment by Lihir of any amounts under the on-lending agreement was
subordinated in right of payment and upon liquidation to the syndicated
facility agreement.
The loan contains Event of Default provisions that, if satisfied, give
EIB/MRDC the right to demand immediate repayment of the loan. These
provisions concern events such as material misrepresentation of fact, failure
to pay obligations under the loan when due, insolvency or liquidation of the
Company, abandonment of a substantial part of the Company's business,
substantial reduction in the net worth of the Company, default on other major
loan agreements, and any material adverse effect on the Company's ability to
service the loan. To date, no Event of Default has been triggered.
As part of the refinancing agreement signed on November 22, 2000, MRDC
consented to revised terms of subordination and security in the on-lending
agreement. The subordination of the on-lending agreement in terms of debt
service payments will fall away on the termination of the syndicated facility
agreement at maturity or earlier if the loan is pre-paid.
D. Exchange Controls
Since achieving self-government in 1973 and independence in 1975, PNG has
maintained a consistent policy of welcoming direct foreign investment in most
activities and foreign investment in the mining sector in particular. The
Investment Promotion Act assures investors that they will have the right to
remit after-tax profits and to make
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external debt-service and supplier payments and that there will be no
expropriation without adequate compensation.
The PNG Central Banking (Foreign Exchange and Gold) Regulations generally
require PNG companies to transfer all of their non-Kina revenues to PNG and
convert them into Kina and require the prior approval of the PNG Central Bank
to convert funds from Kina into other currencies. However, as is ordinarily
the case with large mining and petroleum projects in PNG, under the Mining
Development Contract the PNG Government has agreed to ensure that the PNG
Central Bank will grant to the company permission to retain certain of its
funds in other currencies in, and to convert and transfer its Kina funds into,
offshore accounts. Prior to the completion of the development of the Lihir
operation, this permission was limited to certain proceeds from bank loans,
insurance policies and the sale of its securities (including all of the
non-Kina proceeds of the Loan and the global offering). The company is
currently permitted to retain in the offshore accounts proceeds from the sale
of mining products and the proceeds of bank loans and insurance policies in an
aggregate amount sufficient to pay three months anticipated loan servicing
obligations, payments for goods and services to persons resident outside of
PNG, dividends to non-PNG shareholders and payments for certain approved
reductions in share capital. To the extent the foregoing permissions are
insufficient for such purposes, the company would require the approval of the
PNG Central Bank to pay cash dividends to shareholders resident outside PNG or
to invest or purchase goods or property outside PNG.
The Kina is subject to exchange controls. There is a limited and inefficient
market for the Kina and no assurance can be given that the company will be able
to convert any Kina funds it has into other currencies at rates comparable to
those at which funds were initially remitted to PNG or at all.
Foreign workers employed by the company, if they are resident in Papua New
Guinea, will be subject to exchange control administered by the Bank of Papua
New Guinea (the Central Bank) under the Central Banking (Foreign Exchange and
Gold) Regulation. A taxation clearance certificate is generally required where
cumulative remittances of foreign currency exceed K50,000 in a calendar year,
and formal exchange control approval is generally required where total
cumulative foreign currency remittances exceed K500,000 in a calendar year
(approximately US$130,000), including for the purposes of buying securities. A
person in this position will be able to purchase the company's ordinary shares
or American Depositary Shares on exchanges outside Papua New Guinea on which
they are listed for quotation.
A foreign worker employed by the company who is resident in Papua New Guinea
will be permitted to purchase the company's ordinary shares on the Port Moresby
Stock Exchange in Papua New Guinea without any restriction. A person who is
not resident in Papua New Guinea will be able to purchase the company's
ordinary shares or American Depositary Shares on the exchanges on which they
are listed for quotation without any restriction.
Any person who has purchased the company's ordinary shares would be permitted
to hold them, and exercise the votes attached to them, without any limitations,
subject to the provisions of the PNG Companies Act.
E. Taxation
The following discussion is a summary of United States federal income,
Australian and PNG tax consequences to U.S. holders of ordinary shares or of
ADSs evidenced by ADRs. The discussion does not purport to be a comprehensive
discussion and is based on the United States Internal Revenue Code of 1986, as
amended (the
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"Code") and the tax laws of PNG as in effect on the date hereof, which are
subject to change. This discussion is also based in part upon the
representations of the Depositary and assumes that each obligation in the
Deposit Agreement and any related agreement will be performed in accordance
with its terms. The discussion does not consider any specific facts or
circumstances that may apply to a particular investor, some of which (for
example, tax-exempt entities, banks, broker-dealers, traders in securities that
elect to mark to market, investors liable for alternative minimum tax,
investors who hold ordinary shares or ADRs as part of straddles or hedging or
conversion transactions and investors whose functional currency is not the U.S.
dollar) may be subject to special rules. Accordingly, prospective purchasers of
ordinary shares or ADSs are urged to consult their tax advisors concerning the
U.S. federal, state, local and foreign tax consequences including the PNG
consequences of their ownership of ordinary shares or ADSs.
United States Federal Income Taxation
For purposes of this discussion, a "U.S. Holder" is any beneficial owner who or
that owns the ordinary shares or ADSs as a capital asset and is (i) a citizen
or resident of the United States, (ii) a domestic corporation, (iii) an estate
subject to United States federal income taxation on a net income basis or (iv)
a trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United States
persons have the authority to control all substantial decisions of the trust.
The discussion does not address aspects of United States taxation other than
federal income taxation and of PNG taxation other than income taxation.
Prospective investors are urged to consult their tax advisors regarding the
United States federal, state, local, PNG, and other jurisdictions tax
consequences of owning and disposing of ordinary shares and ADSs.
In general, taking into account the earlier assumptions, for United States
federal income purposes, holders of ADRs evidencing ADSs will be treated as the
owners of the ordinary shares represented by those ADSs.
Taxation of Dividends
Subject to the discussion under "Passive Foreign Investment Company
Considerations" below, under United States federal income tax law, U.S. Holders
will include in gross income as a dividend the gross amount of any distribution
paid (before reduction for PNG withholding taxes) by the company to the extent
of its current or accumulated earnings and profits (as determined for United
States federal income tax purposes) as ordinary income when the dividend is
received, actually or constructively, by the U.S. Holder, in the case of
ordinary shares, or by the Depositary, in the case of ADSs. The dividend will
not be eligible for the dividends-received deduction generally allowed to U.S.
corporations. The amount of the distribution will be the U.S. dollar value of
the PNG Kina payments made, determined at the spot PNG Kina/U.S. dollar rate on
the date such dividend distribution is includible in the income of the U.S.
Holder, regardless of whether the payment is in fact converted into U.S.
dollars. Generally, any gain or loss resulting from currency exchange
fluctuations during the period from the date the dividend is paid to the date
such payment is converted into U.S. dollars will be treated as ordinary U.S.
sourced income or loss. Distributions in excess of current and accumulated
earnings and profits, as determined for United States federal income tax
purposes, will be treated as a non-taxable return of capital to the extent of
the US Holders basis in the ordinary shares or ADSs and thereafter as capital
gain.
Subject to certain conditions and limitations, the PNG tax withheld and paid
over to PNG will be eligible for credit against the U.S. Holder's United States
federal income tax liability.
For foreign tax credit purposes, the dividend will be income from sources
without the United States, but generally will be "passive income" (or, in the
case of certain holders, "financial services income") which is treated
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separately from other types of income for purposes of computing the foreign tax
credit allowable to the U.S. Holder.
Distributions of additional ordinary shares to U.S. Holders with respect to
their ordinary shares or ADSs that are made as part of a pro rata distribution
to all shareholders of the company generally will not be subject to United
States federal income tax.
Taxation of Capital Gains
Subject to the discussion under "Passive Foreign Investment Company
Considerations" below, upon a sale or other disposition of ordinary shares or
ADSs, a U.S. Holder will recognize U.S. sourced gain or loss for United States
federal income tax purposes in an amount equal to the difference between the
U.S. dollar value of the amount realized and the U.S. Holder's tax basis
(determined in U.S. dollars) in such ordinary shares or ADSs. Such gain or
loss will be a capital gain or loss and, if the U.S. Holder's holding period
for such ordinary shares or ADSs exceeds one year, will be a long-term capital
gain or loss. Long-term capital gains of a non-corporate U.S. Holder are
generally subject to a maximum tax rate of 20%.
Passive Foreign Investment Company Considerations
The company believes that for its 1995, 1996 and 1997 taxable years, the
company was a passive foreign investment company, or PFIC, for United States
federal income tax purposes because the company had earned passive income from
investments while it had not yet earned any income from mining operations.
While in certain circumstances, a company will not be treated as a PFIC during
the first taxable year in which such company has gross income, because the
company had passive income for more than one taxable year before earning income
from mining operations, the exception would not be applicable. Consequently,
U.S. Holders of the company's ordinary shares or ADSs whose holding period
includes all or part of the 1995, 1996 or 1997 taxable years of the company
will be subject to the special rules described below.
The company believes that it will not be treated as a PFIC for its 1998, 1999,
2000, 2001 and 2002 taxable years. However, the classification of the company
as a PFIC will depend on a factual determination made annually and thus may be
subject to change, depending upon the character of the company's income and
assets in future years. The Code treats gains from transactions in
commodities, such as gold, as passive income unless "substantially all" of a
company's business is as an active producer of the commodity. The Regulations
define "substantially all" to mean that 85% or more of a producer's gross
receipts must be gross receipts from sales in the active conduct of a
commodities business or certain related activities. Under these rules, there
can be no assurance that the company would not be treated as a PFIC in future
taxable years even though it is earning income from its mining operations.
A U.S. Holder of ordinary shares or ADSs whose holding period includes a
taxable year of the company in which the company was a PFIC and who does not
make a "QEF election" (as described below) will be subject to the following
rules:
(a)  Distributions made by the company during a taxable year to a U.S. Holder
with respect to the ordinary shares or ADSs that are an "excess distribution"
(defined generally as the excess of the amount received with respect to the
ordinary shares or ADSs in any taxable year in excess of 125 percent of the
average received in the shorter of either the three previous years or the U.S.
Holder's holding period before the taxable year) must be allocated ratably to
each day of the U.S. Holder's holding period. The amount allocated to the
current taxable year
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is included as ordinary income in the U.S. Holder's gross income for that year.
The amount allocated to each prior taxable year is taxed as ordinary income at
the highest rate in effect for the U.S. Holder in that prior year and the tax
is subject to an interest charge at the rate applicable to deficiencies in
income taxes.
(b)  The entire amount of any gain realized upon the sale or other disposition
of ordinary shares or ADSs will be treated as an excess distribution made in
the year of sale or other disposition and as a consequence will be treated as
ordinary income and, to the extent allocated to years prior to the year of sale
or disposition, will be subject to the interest charge described above.
The special PFIC tax rules described above will not apply to a U.S. Holder if
the U.S. Holder elects to have the company treated as a "qualified electing
fund" (a "QEF election") in the first taxable year in which the U.S. Holder
owns the ordinary shares or ADSs and for which the company is treated as a
PFIC, and the company complies with certain reporting requirements. The
company intends to comply with all reporting requirements necessary for a U.S.
Holder to make a QEF election and will provide to U.S. Holders such information
as may be required to make such a QEF election effective.
A U.S. Holder that makes a QEF election will be currently taxable on its pro
rata share of the company's ordinary earnings and net capital gain (at ordinary
income and capital gains rates, respectively) for each taxable year of the
company in which the company is a PFIC (which, as discussed above, may be a
significant number of taxable years), regardless of whether or not
distributions were received. The U.S. Holder's basis in the ordinary shares or
ADSs will be increased to reflect taxed but undistributed income.
Distributions of income that had previously been taxed will result in a
corresponding reduction of basis in the ordinary shares or ADSs and will not be
taxed again as a distribution to the U.S. Holder.
For taxable years beginning after 1997, a U.S. Holder of ordinary shares or
ADSs in a PFIC that are treated as "marketable stock" may also make a
mark-to-market election. An electing shareholder will not be subject to the
PFIC rules described above. Instead, in general, an electing shareholder will
include in each taxable year as ordinary income the excess, if any, of the fair
market value of the ordinary shares or ADSs at the end of the taxable year over
their adjusted basis and will be permitted an ordinary loss in respect of the
excess, if any, of the adjusted basis of the ordinary shares or ADSs over their
fair market value at the end of the taxable year (but only to the extent of the
net amount of previously included income as a result of the mark-to-market
election). The electing U.S. Holder's basis in the ordinary shares or ADSs
will be adjusted to reflect any such income or loss amounts.
A U.S Holder who makes the mark-to-market election (described above) but who
did not make a QEF election for any holding periods prior to December 31, 1997,
in which the company was a PFIC, will be subject to the PFIC rules in the first
taxable year of making the mark-to-market election, with respect to any
distribution on or disposition of such ordinary shares or ADSs or with respect
to any amount includable as a result of making the mark-to-market election.
Special rules apply with respect to the calculation of the amount of the
foreign tax credit with respect to excess distributions by a PFIC or inclusions
under a QEF.
A U.S. Holder who owns ordinary shares or ADSs during any year that the company
is a PFIC must file Internal Revenue Service Form 8621.
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Australian Taxation
Australian stamp duty is not payable on transfers made on or after 1 July 2001
of marketable securities that are quoted on the Australian Stock Exchange and
registered in Australia. No Australian stamp duty is payable on the issue or
transfer in the United States of an ADR for Lihir Gold shares.
Papua New Guinea Taxation
The application of PNG taxation to U.S. Holders in relation to income derived
from their ADRs or ordinary shares will depend upon whether they are resident
in PNG or not. A person, other than a company, will normally be a resident of
PNG if that person:
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.
A company will normally be a resident of PNG if it is incorporated in PNG or if
it carries on business in PNG and has either its central management and control
in PNG or its voting power is controlled by shareholders who are residents of
PNG.
A superannuation fund will be a resident of PNG if it is established or managed
in PNG.
Dividends paid by the company after January 1, 2001, including those paid to
residents of PNG, will generally be subject to 10% (17% previously) dividend
withholding tax. Dividends paid to resident and non-resident superannuation
funds are exempt from the withholding tax.
If a US Holder is not a resident of PNG, the dividend (withholding) tax on the
Holder's ordinary shares will be a final PNG tax on that income provided that
the U.S. Holder does not carry on business through a permanent establishment in
PNG. Assuming that the US Depositary for the ADRs never becomes a resident of
PNG, this will apply to the ordinary shares held by the Depositary on behalf of
the ADR holders and further distributions of the dividend income by the
Depositary to the ADR holders who are themselves not resident in PNG will not
be liable to any further PNG tax.
If a US Holder is a resident of PNG, dividends paid by the company on the
ordinary shares held by that person and income received from the ADRs held by
that person will be assessable income in PNG and, after any allowable
deductions are made, will be subject to income tax at the normal rates
applicable to individuals and companies. A credit may be claimed for the
dividend (withholding) tax which has already been paid.
The sale of ordinary shares or ADRs may generate assessable income to certain
U.S. Holders, such as banks, insurance companies and other persons or
institutions in the business of investment, if such sale is carried out in PNG
or if the business is carried on in PNG through a permanent establishment and
the income earned is effectively connected with that permanent establishment.
Any such income would be assessable (after any allowable deductions are made)
at the ordinary rates applicable to individuals or companies.
In addition, although PNG does not have a capital gains tax as such, any person
deriving in PNG a profit arising from the sale of any property acquired for the
purpose of profit-making by sale, or from the carrying on or carrying out of
any profit making undertaking or scheme, will be liable to tax in PNG on that
profit. Such profit will be included in that person's assessable income and,
after any allowable deductions are made, will be subject to income tax at the
normal rates applicable to individuals and companies.
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Transfers of marketable securities which are registered in PNG will be liable
to PNG stamp duty as follows:
•
if transferred through a stock broker registered to operate on the
Port Moresby Stock Exchange, the transfer is exempt from stamp duty;
•
if transferred through a recognized broker or broker's agent, at the
rate of 0.2% payable by the vendor and 0.2% payable by the purchaser of
the sale/purchase price for the securities; and
•
otherwise at the rate of 1% of the value of the securities, payable
by the purchaser or transferee.
No PNG stamp duty will be payable on the issue or stock market transfer of an
ADR, provided that the ADR is registered on a register located outside PNG and
the transfer is effected on that register.
F. Dividends and Paying Agents
Not applicable
G. Statement by Experts
Not applicable
H. Documents on Display
All company documents are in English and may be inspected at the registered
office in Port Moresby, PNG with the benefit of advance notice.
It is also possible to read and copy documents referred to in this annual
report on Form 20-F that have been filed with the SEC at the SEC's public
reference room located at 450 Fifth Street, NW, Washington, D.C. 20549. Please
call the SEC at 1-800-SEC-0330 for further information on the public reference
rooms and their copy charges.
I. Subsidiary Information
Not applicable.
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Item 11. Quantitative and Qualitative Disclosure About Market Risk
A. Quantitative Information about Market Risk
Gold Commodity Price Risk
Market risks relating to the company's operations result primarily from changes
in the market price for gold.
The following tables summarizes Lihir's gold price hedging program as at
December 31, 2002:
Put Options Bought
Year
Ounces
Average
Revenue
Strike price
(US$ millions)
(US$/Oz)
2004
20,000
335.00
6.7
2005
95,000
320.39
30.4
2006
39,000
325.26
12.7
2007
96,000
319.17
30.6
2008
40,000
335.00
13.4
Total
290,000
323.66
93.8
Call Options Sold
Year
Ounces
Average
Strike price
(US$/Oz)
2004
20,000
365.00
2005
95,000
326.71
2006
39,000
336.74
2007
96,000
319.08
2008
20,000
365.00
Total
270,000
331.12
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Forwards
Year
Ounces
Average
Revenue
Strike price
(US$ millions)
(US$/Oz)
2003
311,977
329.60
102.8
2004
217,977
325.38
70.9
2005
178,988
335.27
60.0
2006
222,500
321.90
71.6
2007
330,000
323.76
106.8
2008
375,475
331.96
124.6
2009
243,185
350.76
85.3
2010
10,000
327.00
3.3
Total
1,890,101
330.90
625.3
The revenue figures shown in the above tables are those that will be received
if, in the case of options, those options are exercised. For put options
bought by Lihir, this will be the case when the prevailing spot price at the
exercise date is below the put option strike price. For call options bought by
Lihir, the option would be exercised and the resulting ounces sold at the
prevailing spot price only if the spot price were to be greater than the call
strike price. For call options sold by Lihir, Lihir will be obliged to deliver
gold at the strike price if required to do so by the counter-party. This is
only likely to occur if the spot price is greater than the call strike price.
In the case of Fixed Rate Forwards, Lihir is obliged to sell the relevant
number of ounces at the specified strike price on the value date, and the
revenue shown above is that which will actually be received.
The minimum total revenue generated from these programs will be US$719 million
(2001: US$737 million and 2000: US$640 million). Revenue generated from the
same number of ounces at the prevailing spot price at December 31, 2002 of
US$342.75 per ounce would be US$747 million (2001: US$634 million at US$276.50
per ounce and 2000: US$532 million at US$272.25 per ounce).
On December 31, 2002, the estimated fair value of the total hedge program as
determined by independent party based on the ruling spot price of US$342.75
(2001: US$276.5 and 2000: US$272.25) was negative US$65.8 million (2001:
positive US$59.8 million and 2000: positive US$54.4). At the spot price plus
10% (US$377.0) the estimated fair value would be approximately US$150 million
out-of-the-money. Conversely at the spot price less 10% (US$308.5) the
estimated fair value would be US$0 million. The fair value of commodity
contracts is estimated based on quotes from the market makers of these
instruments and represents the estimated amounts that Lihir would expect to
receive or pay to terminate the agreements at the reporting date. Fair value
of put options is an estimate based on relevant market information such as:
volatility of similar options, futures prices and the contracted strike price.
Net profit for 2002 included revaluation revenue relating to ineffective hedges
of US$2.3 million (2001: 5.0 million). The hedge effectiveness provisions of
IAS 39 require that the ineffective portion of the hedge be passed through the
income statement. During the latter part of 2000 and early 2001, gold lease
rates were historically high. In locking in the gold price for future
production, Lihir elected to retain a floating rate exposure to lease
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rates by way of gold lease rate swaps. The US$2.3 million (2001: $US5.0
million, 2000: US$ nil) revenue has primarily arisen due to lease rates falling
to historical levels, across the curve.
The effective portion of the hedge is retained in equity, to be recycled to
earnings on delivery of designated production. At 31 December 2002,
shareholders equity included a hedging fair value reserve of negative US$69.5
million (2001: positive US$53.6 million).
Interest Rate and Exchange Rate Risk
The company does not use financial instruments to hedge interest rate or
exchange rate exposure.
The company's interest expenses are most sensitive to changes in the London
Inter-Bank Offered Rate (LIBOR) as its borrowings under the syndicated facility
agreement bear a LIBOR based interest rate. At December 31, 2002, the group
had US$23.0 million outstanding on its variable rate loans. In addition it had
US$17.5 million outstanding on the fixed rate (8.42%) EIB loan, partially
offset by primarily US$ denominated cash deposits amounting to US$32.5 million.
The potential loss to the group over one year that would result from a
hypothetical, instantaneous and unfavourable change in 100 basis points in the
interest rates of all variable financial assets and liabilities (excluding the
EIB loan which is fixed rate and cash deposits) on December 31, 2002 would be
approximately US$0.2 million. Including the cash on deposit component in the
calculation, the net interest rate exposure would reduce to less than US$(0.1)
million.
The company's functional currency is the US dollar but some transactions are
denominated in Australian dollars and Kina. By way of illustration of the
sensitivity of exchange rates on such transactions, a 10% change in the
Australian to US dollar exchange rate would have a US$0.4 million impact on
earnings after tax. Similarly a 10% change in the Kina to US dollar exchange
rate would have a US$0.2 million impact on earnings after tax.
B. Qualitative Information about Market Risk
Market risks relating to the company's operations result primarily from changes
in the market price for gold and changes in interest rates. The company does
not use derivative securities or other financial instruments for trading
purposes and is not party to any leveraged derivatives.
To reduce the risk related to the decrease in the market price of gold, the
company has entered into hedging transactions, which include put options, spot
deferred and forward sales covering a portion of its gold production and fixed
future prices. The company assesses the exposure that may result from a
hedging transaction prior to entering into commitment, and only enters into
transactions that it believes accurately hedge the underlying risk and could be
safely held to maturity. The company regularly reviews its unrealized gains
and losses on hedging transactions. The company is also required by its
obligations under the former loan agreement and under the new syndicated
facility agreement to hedge against decreases in the market price of gold in
order to maintain minimum revenue amounts on a portion of its gold production.
For a qualitative discussion of the company's hedging strategies, see "Item 5 —
Operating and Financial Review and Prospects — Operating Results — Revenues -
Hedging".
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Item 12. Description of Securities Other than Equity Securities
Not applicable.
PART II
Item 13. Defaults, Dividend Arrearages and Delinquencies
None
Item 14. Material Modifications to the Rights of Security Holders and Use of
Proceeds
None.
PART IV
Item 17. Financial Statements
Not applicable
Item 18. Financial Statements
See pages F-1 through F-34 incorporated herein by reference.
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Item 19 — Exhibits
Exhibit 1
Constitution of 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 2 (a)
European Investment Bank Finance Contract between EIB, MRL and
Lihir, dated December 28, 1995 (incorporated by reference to
Lihir's annual report on Form 20-F for the fiscal year ended
December 31, 1996)
Exhibit 2 (b)
Subordinated On-Lending Agreement Amending Agreement No. 2 between
Mineral Resources Development Company Limited dated November 22,
2000. (incorporated by reference to Lihir's annual report on
Form 20-F for the fiscal year ended December 31, 2000).
Exhibit 2 (c)
Syndicated Facility Agreement among Lihir, ABN AMRO Australia
Limited, ABN AMRO N.V. (Australian Branch) dated November 22,
2000. (incorporated by reference to Lihir's annual report on
Form 20-F for the fiscal year ended December 31, 2000).
Exhibit 2 (d)
Lihir Gold Security Trust Deed among Lihir, ABN AMRO Australia
Limited, Mineral Resources Development Company Limited, Niugini
Mining Limited, Niugini Mining (Australia) Pty Ltd and certain
hedge counter-parties, dated November 22, 2000. (incorporated by reference to Lihir's annual report on
Form 20-F for the fiscal year ended December 31, 2000).
Exhibit 2 (e)
Refinancing Co-ordination Deed among Lihir, UBS Australia Limited,
UBS AG, London Branch, Citibank, N.A., ABN AMRO N.V., (Australian
Branch), ABN AMRO Australia, Mineral Resources Development Company
Limited dated November 22, 2000. (incorporated by reference to Lihir's annual report on
Form 20-F for the fiscal year ended December 31, 2000).
Exhibit 2 (f)
Lihir Gold Present Assets Charge (Australia) among Lihir between
Lihir and ABN AMRO Australia Limited dated November 22, 2000. (incorporated by reference to Lihir's annual report on
Form 20-F for the fiscal year ended December 31, 2000).
Exhibit 2 (g)
Lihir Gold Future Assets Charge (Australia) among Lihir and ABN
AMRO Australia Limited dated November 22, 2000. (incorporated by reference to Lihir's annual report on
Form 20-F for the fiscal year ended December 31, 2000).
Exhibit 2 (h)
Lihir Gold Offshore Assets Charge among Lihir and ABN AMRO
Australia Limited dated November 22, 2000. (incorporated by reference to Lihir's annual report on
Form 20-F for the fiscal year ended December 31, 2000).
Exhibit 2 (i)
Lihir Gold Deed of Security (PNG) among Lihir and ABN AMRO
Australia Limited dated November 22, 2000. (incorporated by reference to Lihir's annual report on
Form 20-F for the fiscal year ended December 31, 2000).
Exhibit 4 (a)
Special Mining Lease, dated as of March 17, 1995, between Lihir
and the PNG Government (incorporated by reference to Lihir's Form
F-1 filed September 6, 1995).
Exhibit 4 (b)
Mining Development Contract, dated as of March 17, 1995, between
Lihir and the PNG Government (incorporated by reference to Lihir's
Form F-1 filed September 6, 1995).
Exhibit 4 (c)
Lihir Project Management Agreement, dated as of March 17, 1995,
between Lihir and Lihir Management Company (incorporated by
reference to Lihir's Form F-1 filed September 6, 1995).
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Exhibit 4 (d)
Technical Support Agreement, dated as of June 30, 1995, between
Lihir Management Company and Rio Tinto (incorporated by reference
to Lihir's Form F-1 filed September 6, 1995).
Exhibit 4 (e)
Compensation Agreement for Land, Crops, Water and Air, dated as of
April 26, 1995, between Lihir Management Company, Lihir Mining
Area Landowners Association Incorporated, Block Executives (for
and on behalf of the Landowners), Catholic Mission (Kavieng
Property Trust) and the United Church in PNG and the Solomon
Islands (incorporated by reference to Lihir's Form F-1 filed
September 6, 1995).
Exhibit 4 (f)
PutPut and Ladolam Relocation Agreement, dated 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 (g)
Contract Explosives Services Contract, dated as of March 14, 1996,
between Lihir Management Company for on behalf of Lihir and ICI
Dulux Papua New Guinea Pty Limited, and Deed of Assignment
relating to same (incorporated by reference to Lihir's annual
report on Form 20-F for the fiscal year ended December 31, 1995)
Exhibit 4 (h)
Deed of Variation to Contract Explosives Services Contract, dated
as of June 4, 1999, between Lihir Management Company for on behalf
of Lihir, Thiess Contractors (PNG) Pty Ltd, Roche Bros (PNG) Pty
Ltd, Orica Papua New Guinea Limited and Orica Australia Pty Ltd. (incorporated by reference to Lihir's annual report on Form 20-F
for the fiscal year ended December 31, 2000).
Exhibit 4 (i)
Agreement for the Services of Professor Ross Garnaut as Chairman
of Lihir, dated as of May 19, 1995 between Lihir and
Maccullochella Pty Ltd. (incorporated by reference to Lihir's annual report on Form 20-F
for the fiscal year ended December 31, 2000).
Exhibit 4 (j)
Extension agreement for the Services of Professor Ross Garnaut as
Chairman of Lihir, dated as of January 31, 2001 between Lihir and
Maccullochella Pty Ltd. (incorporated by reference to Lihir's annual report on Form 20-F
for the fiscal year ended December 31, 2000).
Exhibit 8
Significant Subsidiaries.
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Certain Definitions
"ADRs" means American Depositary Receipts evidencing ADSs.
"ADSs" means American Depositary Shares, each of which represents 20 ordinary
shares.
"ASX" means the Australian Stock Exchange Limited.
"Australian dollar" and "A$" each mean the lawful currency of the Commonwealth
of Australia.
"Blasting Contractor" means Orica Papua New Guinea Ltd.
"Compensation Agreement" means the Compensation Agreement for Land, Crops,
Water and Air among Lihir Management, Lihir Mining Area Landowners Association
Inc, Block Executives (for and on behalf of the Landowners), Catholic Mission
(Kavieng Property Trust) and The United Church in PNG and the Solomon Islands,
dated April 26, 1995.
"CRA" means CRA Limited, an Australian mining company which, in December 1995,
adopted a dual-listed companies structure with Rio Tinto, to form the Rio Tinto
Group.
"Integrated Benefits Package" means the package of compensation agreements
between Lihir Management Company and the people of Lihir represented by The
Nimamar Development Authority and the landowners of Lihir represented by the
Lihir Mining Area Landowners Association Inc.
"Kina" and "K" each mean the lawful currency of PNG.
"Lihir Group" means collectively the four islands (Niolam, Masahet, Mahur and
Mali) located in the Province of New Ireland, PNG.
"Lihir Island" means Niolam Island.
"Lihirians" means collectively the inhabitants of the Lihir Group.
"Mining Development Contract" means the Mining Development Contract between PNG
and the company, dated March 17, 1995.
"MRDC" means Mineral Resources Development Company Limited, a company that is
wholly-owned by the PNG Government.
"MRL" means Mineral Resources Lihir Limited, a wholly owned subsidiary of MRDC.
"Niugini Mining" means Niugini Mining Limited.
"Orogen Minerals" means Orogen Minerals Limited.
"Orogen Lihir" means Orogen Minerals Lihir Limited.
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"PNG" means the Independent State of Papua New Guinea.
"Project Assignment Agreement" means the Project Assignment Agreement among
Southern Gold, Niugini Mining, MRL, PNG and the company, dated March 17, 1995.
"Rio Tinto" or "Rio Tinto Group" means the entity created by the unification of
The RTZ Corporation PLC and CRA in December 1995 pursuant to the adoption by
such companies of a dual listed companies structure.
"Southern Gold" means Southern Gold (Bahamas) Ltd, a company, since
deregistered, owned by Rio Tinto (75%) and Vengold (25%).
"Special Mining Lease" means the Special Mining Lease issued by the PNG
Department of Mining and Petroleum dated March 17, 1995.
"State Equity Acquisition Agreement" means the State Equity Acquisition
Agreement among Kennecott, Niugini Mining, MRL and PNG, dated March 17, 1995.
"Technical Services Agreement" means the Technical Services Agreement between
Sherritt and Lihir Management Company, dated August 5, 1995.
"Technical Services Agreement (North America)" means the Technical Services
Agreement (North America) between Sherritt Inc and Lihir Management Company,
dated August 5, 1995.
"Technical Support Agreement" means the Technical Support Agreement between Rio
Tinto and Lihir Management Company, dated June 30, 1995.
"US dollars", "US$", "$" and "dollars" each mean the lawful currency of the
United States of America and "A$" means Australian dollars.
"Vengold" means Vengold, Inc.
Glossary Of Certain Technical Terms
"Alteration"
Change in the mineral composition of a rock, commonly due to
hydrothermal activity
"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.
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"Ball mill"
A mill using metal balls as the grinding medium
"Bench"
The horizontal floor along which mining progresses in a pit, also
used to describe the horizontal segment between two such floors. The
thickness of such a segment is referred to as the "bench height". As
the pit progresses to lower levels, safety benches are left in the
walls to catch any rock falling from above.
"Benthic"
The portion of the sea floor within which living organisms live
"Benthos"
Organisms that live within the sea floor
"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"
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
"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
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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
"Flocculent"
An additive introduced to promote precipitation in a solution.
"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 a soft or poorly
cemented sandstone.
"Fumaroles"
Vents in a volcanic region from which gases and vapours 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".
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"Joint venture"
An arrangement in which two entities unite to form a new,
jointly-owned entity to achieve a specific purpose.
"Lime"
Calcium oxide; artificially made from limestone
"Limestone"
Rock composed mainly of calcium carbonate
"Lithology"
The physical characteristics of rock
"Mafic"
Descriptive of rocks containing or made up of ferro-magnesian
minerals (usually dark in color)
"Magma; magmatic"
Liquid molten rock; pertaining to processes and rocks involving magma
"Marcasite"
Iron sulfide mineral (a form of pyrite)
"Metallurgy"
The science and technology of metals, usually pertaining to the
processing of metals and minerals in mining
"Mill feed grade"
The grade of material feed to the mill, equivalent to received at mill
"Milling/mill"
The comminution of the ore, although the term has come to cover the
broad range of machinery inside the treatment plant where
economically valuable minerals are separated from the ore
"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 orebody.
"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
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"Ore grade"
The average amount of the valuable metal or mineral contained in a
specific mass of ore; for gold, this is usually expressed as troy
ounces per short ton (2,000 pounds avoirdupois) or grams per tonne
"Ounces"
Troy ounces of 31.103 grams, or 1.097 Avoirdupois ounces
"Outcrop"
That part of a rock formation exposed on surface
"Oxide ore"
Gold ore that has been subjected to oxidation through natural
weathering and surface water percolation to the extent that the
minerals are readily treatable by standard processes
"Phyllic alteration"
Hydrothermal alteration of rocks involving the secondary formation of
quartz and sericite
"Pit shell"
Designed outline of an open pit mine containing all the open pit ore
reserves
"Pleistocene"
A subdivision of geologic time, about 10,000 — 2 million years before
the present
"Potassic alteration"
Hydrothermal alteration of rock involving the secondary formation of
potash feldspar, commonly the mineral orthoclase, usually with
biotite
"Pressure oxidation"
A method of processing refractory sulfide ore
"Propylitic alteration"
Hydrothermal alteration of basic rocks involving the secondary
formation of chlorite, epidote, calcite and sulfide
"Pyrite"
Iron sulfide mineral
"RC hole"
A reverse circulation drill hole produced by percussion drilling in
which rock cuttings are recovered instead of core. "Reverse
circulation" refers to the air flow which flows downward around the
outside of the drill pipe, returning with the rock cuttings through
the drill bit face and stem.
"Reactive sulfur"
In mineral processing involving pressure oxidation, sulfur in the
form of sulfide
"Refining"
The final stage of metal production in which final impurities are
removed from the molten metal by introducing air and fluxes. The
impurities are removed as gases or slag
"Refractory ore"
Ore not amenable to standard processing techniques
"Sampling"
Taking small pieces of rock at intervals along exposed mineralization
for assay (to determine the mineral content)
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"SAG"
"Semi-autogenous grinding", a method of comminution that utilizes the
rock fragments to assist in the grinding process
"Seismic"
Pertaining to shock waves that pass through the earth
"Shotcreting"
Application by pressure spraying of a setting medium with the
characteristics of concrete for stabilization of rock faces.
"Silt curtain"
A flooding barrier to be deployed offshore from watercourses, which
causes temporary ponding of sediment laden fresh water within its
confines to enhance settling, and mixing with sea water, as the
turbid stream is forced underneath the barrier
"Slurry"
A fluid comprising fine solids suspended in a solution (generally
water containing additives)
"Smelting"
Thermal processing whereby molten metal is liberated from
beneficiated ore or concentrate with impurities separating as lighter
slag
"Stockpile"
A store of unprocessed ore or marginal grade material
"Stripping"
The process of removing overburden 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
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Conversion Table
Units of Measure
"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
"m(2)"
Square meters
"m(3)"
Cubic meters
"mtpy"
Million tonnes per year
"t/d"
Tonnes per day
"t/h"
Tonnes per hour
Unit 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/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
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SIGNATURES
The registrant hereby certifies that it meets all of the requirements for
filing on Form 20-F and that it has duly caused and authorized the undersigned
to sign this annual report on its behalf.
LIHIR GOLD LIMITED
(Registrant)
/s/ Neil Swan
Name:   Neil Swan
Title:     Managing Director
Date:  25 May 2003
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Certification
I, Neil Swan, certify that:
1.     I have reviewed this Annual Report on Form 20-F of Lihir Gold Limited;
2.     Based on my knowledge, this Annual Report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this Annual
Report;
3.     Based on my knowledge, the financial statements, and other financial
information included in this Annual Report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this Annual Report;
4.     The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a – 14 and 15d – 14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this Annual Report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this Annual
Report (the "Evaluation Date"); and
c) presented in this Annual Report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5.     The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
function):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls;
and
6.     The registrant's other certifying officer and I have indicated in this
Annual Report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
/s/ Neil Swan
Chief Executive Officer
Date: June 9 2003
Table of Contents
Certification
I, Nick Lambeth, certify that:
1.     I have reviewed this Annual Report on Form 20-F of Lihir Gold Limited;
2.     Based on my knowledge, this Annual Report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this Annual
Report;
3.     Based on my knowledge, the financial statements, and other financial
information included in this Annual Report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this Annual Report;
4.     The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a – 14 and 15d – 14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this Annual Report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this Annual
Report (the "Evaluation Date"); and
c) presented in this Annual Report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5.     The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
function):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls;
and
6.     The registrant's other certifying officer and I have indicated in this
Annual Report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
/s/ Nick Lambeth
Chief Financial Officer
Date: June 9 2003
Table of Contents
Exhibit Index
Exhibit
Description
Page
1
Constitution of 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)
2 (a)
European Investment Bank Finance Contract between EIB, MRL and
Lihir, dated December 28, 1995 (incorporated by reference to
Lihir's annual report on Form 20-F for the fiscal year ended
December 31, 1996)
2 (b)
Subordinated On-Lending Agreement Amending Agreement No. 2 between
Mineral Resources Development Company Limited dated November 22,
2000. (incorporated by reference to Lihir's annual report on
Form 20-F for the fiscal year ended December 31, 2000)
2 (c)
Syndicated Facility Agreement among Lihir, ABN AMRO Australia
Limited, ABN AMRO N.V. (Australian Branch) dated November 22,
2000. (incorporated by reference to Lihir's annual report on
Form 20-F for the fiscal year ended December 31, 2000)
2 (d)
Lihir Gold Security Trust Deed among Lihir, ABN AMRO Australia
Limited, Mineral Resources Development Company Limited, Niugini
Mining Limited, Niugini Mining (Australia) Pty Ltd and certain
hedge counter-parties, dated November 22, 2000. (incorporated by reference to Lihir's annual report on
Form 20-F for the fiscal year ended December 31, 2000)
2 (e)
Lihir Gold Present Assets Charge (Australia) among Lihir between
Lihir and ABN AMRO Australia Limited dated November 22, 2000. (incorporated by reference to Lihir's annual report on
Form 20-F for the fiscal year ended December 31, 2000)
2 (f)
Lihir Gold Future Assets Charge (Australia) among Lihir and ABN
AMRO Australia Limited dated November 22, 2000. (incorporated by reference to Lihir's annual report on
Form 20-F for the fiscal year ended December 31, 2000)
2 (g)
Lihir Gold Offshore Assets Charge among Lihir and ABN AMRO
Australia Limited dated November 22, 2000. (incorporated by reference to Lihir's annual report on
Form 20-F for the fiscal year ended December 31, 2000)
2 (h)
Lihir Gold Deed of Security (PNG) among Lihir and ABN AMRO
Australia Limited dated November 22, 2000. (incorporated by reference to Lihir's annual report on
Form 20-F for the fiscal year ended December 31, 2000)
4 (a)
Special Mining Lease, dated as of March 17, 1995, between Lihir
and the PNG Government (incorporated by reference to Lihir's Form
F-1 filed September 6, 1995).
4 (b)
Mining Development Contract, dated as of March 17, 1995, between
Lihir and the PNG Government (incorporated by reference to Lihir's
Form F-1 filed September 6, 1995).
4 (c)
Lihir Project Management Agreement, dated as of March 17, 1995,
between Lihir and Lihir Management Company (incorporated by
reference to Lihir's Form F-1 filed September 6, 1995).
4 (d)
Technical Support Agreement, dated as of June 30, 1995, between
Lihir Management Company and Rio Tinto (incorporated by reference
to Lihir's Form F-1 filed September 6, 1995).
4 (e)
Compensation Agreement for Land, Crops, Water and Air, dated as of
April 26, 1995, between Lihir Management Company, Lihir Mining
Area Landowners Association (incorporated by reference to
Lihir's Form F-1 filed September 6, 1995)
Table of Contents
Exhibit
Description
Page
Incorporated, Block Executives (for
and on behalf of the Landowners), Catholic Mission (Kavieng
Property Trust) and the United Church in PNG and the Solomon
Islands (incorporated by reference to Lihir's Form F-1 filed
September 6, 1995).
4 (f)
PutPut and Ladolam Relocation Agreement, dated 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).
4 (g)
Contract Explosives Services Contract, dated as of March 14, 1996,
between Lihir Management Company for on behalf of Lihir and ICI
Dulux Papua New Guinea Pty Limited, and Deed of Assignment
relating to same (incorporated by reference to Lihir's annual
report on Form 20-F for the fiscal year ended December 31, 1995)
4 (h)
Deed of Variation to Contract Explosives Services Contract, dated
as of June 4, 1999, between Lihir Management Company for on behalf
of Lihir, Thiess Contractors (PNG) Pty Ltd, Roche Bros (PNG) Pty
Ltd, Orica Papua New Guinea Limited and Orica Australia Pty Ltd.  (incorporated by reference to Lihir's annual report on
Form 20-F for the fiscal year ended December 31, 2000)
4 (i)
Agreement for the Services of Professor Ross Garnaut as Chairman
of Lihir, dated as of May 19, 1995 between Lihir and
Maccullochella Pty Ltd. (incorporated by reference to Lihir's
annual report on Form 20-F for the fiscal year ended
December 31, 2000).
4 (j)
Extension agreement for the Services of Professor Ross Garnaut as
Chairman of Lihir, dated as of January 31, 2001 between Lihir and
Maccullochella Pty Ltd. (incorporated by reference to Lihir's
annual report on Form 20-F for the fiscal year ended
December 31, 2000).
8
Significant Subsidiaries.
Table of Contents
FINANCIAL STATEMENTS
LIHIR GOLD LIMITED
Audited financial statements
Report of the independent accountants
F-A
Profit and loss accounts for the years ended December 31, 2002, 2001, and 2000
F-2
Balance sheets as at December 31, 2002, 2001, and 2000
F-3
Statements of changes in equity for the years ended December 31, 2002, 2001, and 2000
F-4
Statements of cash flows for the years ended December 31, 2002, 2001, and 2000
F-5
Notes to the financial statements
F-6
Table of Contents
Report of Independent Accountants
To the Board of Directors and Shareholders of Lihir Gold Limited
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of income, of cashflows and of changes in equity
present fairly, in all material respects, the financial position of Lihir Gold
Limited and its subsidiaries at December 31, 2002, 2001, and 2000, and the
results of their operations and their cash flows for the years then ended, in
conformity with International Financial Reporting Standards. These financial
statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards in the United States of America and
International Standards on Auditing. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for the
opinion expressed above.
International Financial Reporting Standards vary in certain significant
respects from accounting principles generally accepted in the United States of
America. The application of the latter would have affected the determination
of consolidated operating profit after income tax for the years ended December
31, 2002, 2001, and 2000, and the determination of consolidated shareholders'
equity at December 31, 2002, 2001, and 2000, to the extent summarised in Note
29 to the financial statements.
PricewaterhouseCoopers
Port Moresby, Papua New Guinea
March 7, 2003
F-A
Table of Contents
LIHIR GOLD LIMITED
CONSOLIDATED PROFIT AND LOSS ACCOUNTS
For the Years Ended December 31, 2002, 2001 and 2000
Note
2002
2001
2000
US$'000
US$'000
US$'000
Sales revenue
6
213,189
233,155
226,583
Operating expenses
Mining expenses
(72,966
)
(65,724
)
(58,850
)
Processing costs
(30,446
)
(31,842
)
(32,272
)
Power generation costs
(24,103
)
(24,450
)
(23,247
)
General and administrative costs
(31,300
)
(21,409
)
(24,062
)
Refining, royalty and management fees
(7,933
)
(7,961
)
(8,315
)
Costs deferred and transferred to inventories
19,556
3,080
6,583
Impairment (charge) / reversal: mine properties, deferred mining costs
37,893
—
(120,645
)
Impairment of low grade stockpile
(4,392
)
(5,841
)
(7,965
)
Contract mining cancellation fees
—
—
(7,706
)
Depreciation and amortisation
(27,135
)
(31,899
)
(35,115
)
Total operating expenses
6
(140,826
)
(186,046
)
(311,594
)
Profit / (loss) from operating activities
72,363
47,109
(85,011
)
Interest income
1,015
1,805
2,822
Finance costs
(3,705
)
(6,164
)
(17,166
)
Profit / (loss) from ordinary activities before taxation
6
69,673
42,750
(99,355
)
Income tax
15
(16,426
)
16,426
—
Profit / (loss) from ordinary activities after taxation
53,247
59,176
(99,355
)
Earnings per share
27
- Basic (US$/share)
.047
.052
(0.087
)
- Diluted (US$/share)
.047
.052
(0.087
)
The accompanying notes form part of these financial statements.
F-2
Table of Contents
LIHIR GOLD LIMITED
CONSOLIDATED BALANCE SHEET
As At December 31, 2002, 2001 and 2000
2002
2001
2000
Note
US$'000
US$'000
US$'000
ASSETS
CURRENT ASSETS
Cash and cash equivalents
7
33,817
37,915
40,823
Derivative financial instruments
24
1,948
30,633
—
Inventories
9
46,972
32,843
40,540
Receivables
10
4,652
15,127
28,171
Prepayments
422
456
1,640
Deferred hedging costs
24
—
—
4,230
Deferred mining costs
11
4,185
862
9,215
TOTAL CURRENT ASSETS
91,996
117,836
124,619
NON-CURRENT ASSETS
Derivative financial instruments
24
10,037
31,969
—
Receivables
10
2,793
1,180
2,015
Deferred mining costs
11
17,720
16,440
5,240
Mine properties
12
454,138
417,830
411,586
Deferred hedging costs
24
—
—
4,115
TOTAL NON-CURRENT ASSETS
484,688
467,419
422,956
TOTAL ASSETS
576,684
585,255
547,575
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Bank overdraft
7
1,297
—
—
Derivative financial instruments
24
6,133
—
—
Accounts payable
13
14,382
26,612
24,823
Provisions
14
2,218
2,927
4,423
Borrowings
22
3,510
3,775
3,510
Deferred hedging income
24
—
—
32,071
TOTAL CURRENT LIABILITIES
27,540
33,314
64,827
NON CURRENT LIABILITIES
Derivative financial instruments
24
71,619
2,846
—
Provisions
14
14,067
12,289
10,613
Borrowings
22
37,048
40,558
69,262
Deferred hedging income
24
—
—
19,417
TOTAL NON CURRENT LIABILITIES
122,734
55,693
99,292
TOTAL LIABILITIES
150,274
89,007
164,119
SHAREHOLDERS'
EQUITY
Share capital
19
873,822
873,822
873,822
Fair value and other reserves
(69,469
)
53,616
—
Accumulated losses
(377,943
)
(431,190
)
(490,366
)
TOTAL SHAREHOLDERS' EQUITY
426,410
496,248
383,456
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
576,684
585,255
547,575
The accompanying notes form part of these financial statements.
F-3
Table of Contents
LIHIR GOLD LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the Years Ended December 31, 2002, 2001 and 2000
Share
Retained
Capital
Fair value
Earnings /
(Note 19)
Reserves
(Losses)
Total
US$'000
US$'000
US$'000
US$'000
Balance at January 1, 2000
819,225
—
(391,011
)
428,214
Profit / (loss) for the year
—
—
(99,355
)
(99,355
)
Issue of share capital
54,597
—
—
54,597
Balance at December 31, 2000
873,822
—
(490,366
)
383,456
Profit / (loss) for the year
—
—
59,176
59,176
Effect of adopting IAS39
—
97,559
—
97,559
Deferred tax on adoption
—
(16,325
)
—
(16,325
)
Fair value gains on cash flow hedges
—
26,102
—
26,102
Net movement of deferred tax
—
(101
)
—
(101
)
Reclassified and reported in the
income statement
—
(53,619
)
—
(53,619
)
Balance at December 31, 2001
873,822
53,616
(431,190
)
496,248
Profit / (loss) for the year
—
—
53,247
53,247
Fair value losses on cash flow hedges
—
(114,095
)
—
(114,095
)
Net movement of deferred tax
—
16,426
—
16,426
Reclassified and reported in the
income statement
—
(25,416
)
—
(25,416
)
Balance at December 31, 2002
873,822
(69,469
)
(377,943
)
426,410
The accompanying notes form part of these financial statements.
F-4
Table of Contents
LIHIR GOLD LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Years Ended December 31, 2002, 2001 and 2000
Note
2002
2001
2000
US$'000
US$'000
US$'000
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from operating activities
199,201
208,946
213,249
Payments arising from operating activities
(173,988
)
(142,772
)
(160,057
)
Interest received
1,015
1,805
2,822
Interest and finance charges paid to third parties
(3,411
)
(5,898
)
(16,886
)
Net cash flows from operating activities
8
22,817
62,081
39,128
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property plant and equipment
(25,981
)
(36,898
)
(54,681
)
Cash inflows on acquisition of subsidiary
—
—
52,541
Proceeds of disposal of fixed assets
1,544
349
149
Net cash used in investing activities
(24,437
)
(36,549
)
(1,991
)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings
—
—
—
Proceeds from restructure of hedge book
—
—
42,600
Repayment of term debt
(3,775
)
(28,440
)
(85,789
)
Proceeds of equity issue
—
—
—
Net cash used in financing activities
(3,775
)
(28,440
)
(43,189
)
Net increase/(decrease) in cash held
(5,395
)
(2,908
)
(6,052
)
Cash balance at beginning of year
37,915
40,823
46,875
Net increase/(decrease) in cash held
(5,395
)
(2,908
)
(6,052
)
Cash balance at end of year
7
32,520
37,915
40,823
The accompanying notes form part of these financial statements.
F-5
Table of Contents
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
These financial statements are presented in accordance with the Papua New
Guinea Companies Act 1997, and comply with applicable financial reporting
standards and other mandatory professional reporting requirements approved for
use in Papua New Guinea by the Accounting Standards Board (ASB). These
financial statements have been prepared in accordance with International
Financial Reporting Standards, which have been adopted by the ASB as the
applicable financial reporting framework.
The financial statements have also been prepared on the basis of historical
costs except as disclosed in the accounting policies below. For example,
financial instruments are shown at fair value. The accounting policies have
been consistently applied, unless otherwise stated.
The following is a summary of the significant accounting policies adopted in
the preparation of the consolidated financial statements.
(a)
Exploration and evaluation expenditure
The Group expenses exploration and evaluation costs as incurred.
(b)
Development properties
A property is classified as a development property when a mine plan has
been prepared, proved and probable resources have been established, and
the Group has decided to commercially develop the property. Development
expenditure is accumulated separately for each area of interest in which
economically recoverable mineral reserves have been identified and are
reasonably assured.
All expenditure incurred prior to the commencement of commercial levels of
production from each development property is carried forward to the extent
to which recoupment out of revenue to be derived from the sale of
production from the relevant development property, or from sale of that
property, is reasonably assured.
No amortisation is provided in respect of development properties until
they are reclassified as "Mine Properties", following the commencement of
commercial production. For the period under review the Group has had no
properties in the development stage. No development expenditure is
currently being incurred or capitalised.
(c)
Mine properties
Mine properties represent the accumulation of all development expenditures
incurred by or on behalf of the Group in relation to areas of interest in
which mining of a mineral resource has commenced.
When future economic benefits are established by further development
expenditure in respect of a mine property after the commencement of
production, such expenditure is carried forward as part of the cost of
that mine property. Otherwise such expenditure is classified as part of
the cost of production.
Amortisation of costs is provided for using the units-of-production
method, separate calculations being made for each mineral resource. The
units-of-production basis results in an amortisation charge proportional
to the depletion of estimated recoverable gold ounces contained in proved
and probable ore reserves.
Where a change in estimated recoverable gold ounces contained in proved
and probable ore reserves is made, depreciation and amortisation of mine
properties is accounted for prospectively in the period of change and
future periods.
F-6
Table of Contents
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
(d)
Capitalisation of financing costs
Interest and other financing costs that are directly attributable to the
acquisition, construction or production of a qualifying asset are
capitalised as part of the cost of that asset. To the extent that funds
are borrowed specifically for the purpose of obtaining a qualifying asset,
the amount of borrowing costs eligible for capitalisation on that asset is
determined as the actual borrowing costs incurred on that borrowing during
the period. Capitalisation of borrowing costs ceases when substantially
all the activities necessary to prepare the qualifying asset for its
intended use or sale are complete. Interest earned on the temporary
investment of borrowed funds and funds received in connection with the
sale of equity securities prior to the expenditure being made is deducted
from interest paid on the borrowed funds in arriving at the amounts so
capitalised.
Prior to the commencement of commercial production in 1997, the amount of
interest costs eligible for capitalisation were based on actual interest
costs incurred, as the borrowings were incurred to fund development of the
mine property. Capitalisation of borrowing costs ceased following the
commissioning of the assets upon commencement of commercial production.
These are amortised using the units-of-production method based on
estimated recoverable gold ounces contained in proved and probable ore
reserves. For the years ended 31 December 2002, 2001 and 2000, no
interest costs were capitalised.
(e)
Mine buildings, plant and equipment
The cost of each item of buildings, machinery and equipment is depreciated
over its expected useful life. For the majority of assets this is
accomplished using the units-of-production method based on estimated
recoverable gold ounces contained in proved and probable ore reserves,
although some assets are depreciated using a percentage based on time.
Each item's economic life has due regard to both physical life limitations
and to present assessments of economically recoverable reserves of the
mine property (where appropriate) and to possible future variations in
those assessments. Estimates of remaining useful lives are made on a
regular basis for all assets, with annual reassessments for major items.
The total net carrying values of mine building, plant and equipment at
each mine property are reviewed regularly and, to the extent to which
these values exceed their recoverable amounts, that excess is fully
provided against in the financial year in which this is determined.
Major spares purchased specifically for particular plant and
equipment are included in the cost of the plant and equipment and are
depreciated over the expected useful life of the item of plant and
equipment.
Approximately 90% of all fixed assets are depreciated based on the
units-of-production method, using recoverable ounces of gold contained in
proved and probable ore reserves as the determinant. The remaining life
of the mine is approximately 24 years. Those assets depreciated on a
straight line basis are done so predominantly over a life of five years.
Percentage
Percentage
Depreciated
Depreciated
As
As
Fixed Asset Classification
Units-of-Use
Straight Line
Deferred Expenditure
100
%
—
Land & Buildings
100
%
—
Plant & Equipment
89
%
11
%
Grand Total
90
%
10
%
The classification of "Land and Buildings" does not include freehold land
as depreciable assets. The Company does not own any freehold land, and
only occupies land by leasehold tenure. All lease costs are expensed as
incurred.
F-7
Table of Contents
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
(f)
Remaining mine life
In estimating the remaining life of the mine for the purpose of
amortisation and depreciation calculations, due regard is given, not only
to the amount of remaining recoverable gold ounces contained in proved and
probable ore reserves, but also to limitations which could arise from the
potential for changes in technology, demand, product substitution and
other issues which are inherently difficult to estimate over a lengthy
time frame.
(g)
Impairment of assets
Impairments of assets are recognised whenever the carrying amount of an
asset exceeds its recoverable value. The recoverable amount is measured
as the higher of net selling price and value in use. Value in use for
individual assets is calculated by discounting future cash flows using a
risk adjusted pre-tax discount rate.
In 2000, an impairment loss was recognised as the recoverable amount of
the company's cash generating unit was less than the carrying amount. The
cash generating unit comprises mine properties and deferred mining costs.
The recoverable amount was derived from value in use calculations based on
discounted cash flows, a long-term gold price assumption of US$300 and a
pre-tax real discount rate of 6%.
In 2001, after applying the same principles as in 2000, no impairment was
required to be recognised.
In 2002, after applying the same principles as the previous years and
revisiting critical assumptions, including life of mine, remaining
reserves, a long term gold price assumption of $US305 (2001: US$280) and a
pre-tax real discount rate of 7.0% (2001: 6%), an impairment reversal to
the value of $US37.9M was required in accordance with IAS 36.
(h)
Restoration, rehabilitation and environmental expenditure
In accordance with IAS 37 "Provisions, Contingent Liabilities and
Contingent Assets", a provision is raised for anticipated expenditure to
be made on restoration and rehabilitation to be undertaken after mine
closure. These costs include the costs of dismantling and demolition of
infrastructure or decommissioning, the removal of residual material and
the remediation of disturbed areas. The provision is only raised in
respect of damage incurred up to balance date. The amount of any
provision recognised is the full amount that has been estimated based on
current costs to be required to settle present obligations, discounted
using a pre-tax risk-free interest rate of 2.5%. Estimates of future costs
are reassessed annually.
A corresponding asset, which represents future economic benefits, is
raised and subsequently amortised using the units of production method.
The Company's restoration, rehabilitation and environmental expenditure
policy identifies the environmental, social and engineering issues to be
considered and the procedures to be followed when providing for costs
associated with the site closure. Site rehabilitation and closure involves
the dismantling and demolition of infrastructure not intended for
subsequent community use, the removal of residual materials and the
remediation of disturbed areas. Community requirements and long-term land
use objectives are also taken into account.
(i)
Inventories
Inventories of ore and metal are physically measured or estimated and
valued at the lower of cost and net realisable value.
Cost comprises direct material, direct labour and transportation
expenditure in getting such inventories to their existing location and
condition, together with an appropriate portion of fixed and variable
overhead expenditure and depreciation and amortisation, based on weighted
average costs incurred during the period in which such inventories are
produced. Net realisable value is the amount estimated to be obtained from
sale of the item of inventory in the normal course of business, less any
anticipated costs to be incurred prior to its sale.
Inventories of consumable supplies and spare parts expected to be used in
production are valued at the lower of weighted average cost, which
includes the cost of purchase as well as transportation and statutory
charges, and net realisable value.
F-8
Table of Contents
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
(j)
Deferred mining costs
Direct expenditure on mining is brought to account for each phase of the
mine's development based on the estimated ratio of waste to ore for that
phase. During the mining period the actual ratio of waste to ore removed
for each phase varies from year to year. In periods where more than the
average amount of waste is removed the surplus is transferred to the
deferred mining cost account. It is subsequently expensed during periods
where the waste to ore ratio is less than the average. The average amount
of waste to be removed is assessed according to each mining phase, and not
over the entire life of the mine. The impact of this method of accounting
for stripping costs smoothes the cost of waste removal over the life of
each mining phase, as opposed to expensing the cost of waste removal as
incurred. There is mixed accounting practice in this area with some
mining companies expensing waste removal costs as incurred, with the
effect of creating greater volatility in reported earnings.
The current portion of the deferred mining costs represent the unamortised
costs that are expected to be recouped within 12 months as mining is
completed for that phase.
(k)
Revenue recognition
Sales are recognised as revenue only when there has been a passing of
title and risk to the customer, and:
•
the product is in a form suitable for delivery and no further
processing is required by, or on behalf of, the Group;
•
the quantity and quality (grade) of the product can be
determined with reasonable accuracy;
•
the product has been dispatched to the customer and is no
longer under the physical control of the Group (or property in the
product has earlier passed to the customer);
•
the selling price can be measured reliably;
•
it is probable that the economic benefits associated with the transaction will flow to the Group; and
•
the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Sales revenue represents the gross proceeds receivable from the
customer.
(l)
Accounting for derivative financial instruments and hedging
activities
Derivative financial instruments are initially recognised in the balance
sheet at cost and are subsequently remeasured at their fair values. On
the date a derivative contract is entered into, the Group designates the
contract as a hedge against specific future production. The method of
recognising the resulting gain or loss is dependent on the nature of the
item being hedged.
Changes in the fair value of derivatives that are designated against
future production, qualify as cash flow hedges and are deemed highly
effective, are recognised in equity. Amounts deferred in equity are
transferred to the income statement and classified as revenue in the same
periods during which the hedged gold sales affect the income statement.
Certain derivative instruments do not qualify for hedge accounting under
the specific rules in IAS 39. Changes in the fair value of any derivative
instruments that do not qualify for hedge accounting under IAS 39 are
recognised immediately in the income statement.
When a hedging instrument expires or is sold, or when a hedge no longer
meets the criteria for hedge accounting under IAS 39, any cumulative gain
or loss existing in equity at that time remains in equity and is
recognised when the committed or forecasted production is ultimately
recognised in the income statement. However, if the committed or
forecasted production is no longer expected to occur, the cumulative gain
or loss reported in equity is immediately transferred to the income
statement.
F-9
Table of Contents
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
The Group documents at the inception of the transaction the relationship
between hedging instruments and hedged items, as well as its risk
management objective and strategy for undertaking various hedge
transactions. This process includes linking all derivatives designated as
hedges to specific forecast gold sales. The Group also documents its
assessment, both at the hedge inception and on an ongoing basis, whether
the derivatives that are used in hedging transactions are highly effective
in offsetting changes in fair values or cash flows of hedged items.
In assessing the fair value of non-traded derivatives and other financial
instruments, the Group obtains a valuation from an independent external
party.
(m)
Foreign currency translation
As the Company's revenue is denominated in US dollars and the majority of
its fixed asset purchases and costs are in US dollars or currencies
related to US dollars, the Company's Directors have adopted the US dollar
as the Company's measurement and reporting currency.
Foreign currency transactions (other than US dollars) are initially
translated into US currency at the rate of exchange at the date of the
transaction. At the date of the balance sheet, amounts payable and
receivable in foreign currencies are translated to US dollars at rates of
exchange current at that date. Resulting exchange differences are brought
to account in determining the profit or loss for the year.
(n)
Income tax
Tax effect accounting procedures are followed using the liability method
for all temporary differences arising between the tax bases of assets and
liabilities and their carrying values for financial reporting purposes.
Income tax on temporary differences is set aside to the deferred tax
liability and deferred tax asset accounts at current enacted tax rates.
Deferred tax assets relating to deductible temporary differences and tax
losses are only carried forward as an asset to the extent that it is
probable that future taxable profit will be available against which the
deductible temporary differences and tax losses can be utilised.
(o)
Leases
Leases of property, plant and equipment where substantially all the risks
and benefits incidental to the ownership of the asset, but not the legal
ownership are assumed by the Group, are classified as finance leases.
Finance leases are capitalised, recording an asset and liability equal to
the present value of the minimum lease payments, including any guaranteed
residual values. Leased assets are amortised over the shorter of their
estimated useful lives or the lease term. Lease payments are allocated
between the reduction of the lease liability and the lease interest
expense for the period.
Lease payments for operating leases, where substantially all the risks and
benefits remain with the lessor, are charged as expenses in the periods in
which they are incurred.
Penalties paid for early settlement of leases are expensed.
(p)
Cash and Cash Equivalents
For the purpose of the statement of cash flows and balance sheet, cash
includes:
(i)
cash on hand and at call deposits with banks or financial
institutions, net of bank overdrafts; and
(ii)
investments in money market instruments with less than 90 days
to maturity from the date of acquisition.
(q)
Comparative figures
Where necessary, comparative figures have been adjusted to conform with
changes in presentation in the current year.
F-10
Table of Contents
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
(r)
Rounding of amounts
The Financial Statements have been rounded to the nearest thousand
dollars.
(s)
Consolidation
Subsidiary undertakings, which are those entities in which the Group has
an interest of more than one half of the voting rights or otherwise has
power to exercise control over the operations, are consolidated.
Subsidiaries are consolidated from the date on which control is
transferred to the Group and are no longer consolidated from the date that
control ceases. All intercompany transactions, balances and unrealised
gains and losses on transactions between group companies are eliminated.
Where necessary, accounting policies for subsidiaries have been changed to
ensure consistency with the policies adopted by the Group. In the
separate financial statements of the Company, the Company accounts for
investments in subsidiaries at cost less any impairment.
(t)
Significant risks and uncertainties
The Lihir operation is subject to the provisions of the PNG Mining
Act 1992 which governs the granting of mining rights and the
conditions upon which those rights may be terminated. In particular,
the Company is party to a mining development contract, dated 17 March
1995 (the "Mining Development Contract"), with the PNG Government
which sets forth the terms upon which the Company may exercise its
rights under the Special Mining Lease which governs the Lihir
operation. Under certain limited circumstances, the PNG Government
may terminate the Mining Development Contract and therefore, the
Special Mining Lease. Any such termination would prohibit the
continued operation of the Lihir operation.
(u)
Use of Estimates
The preparation of Financial Statements in accordance with International
Financial Reporting Standards requires management to make estimates and
assumptions that affect the amounts reported in the financial statements
and accompanying notes. The most significant estimates and assumptions
relate to the long-term gold price, mineral reserves and remaining mine
lives, provision for restoration and rehabilitation obligations,
recoverability of deferred tax assets, recoverability of long-lived assets
(including ore stock piles), depreciation and amortisation. Actual
results could differ from those estimates and may affect amounts reported
in future periods. Management believes that the estimates are reasonable.
F-11
Table of Contents
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
NOTE 2: CHANGE IN ACCOUNTING POLICY
The company adopted IAS 39 in 2001 as disclosed in accounting policy note 1
(l). In accordance with IAS 39, the comparative financial statements for the
year ended 31 December 2000 are not restated. The impact of this standard led
to an increase in profits before tax for the current year of US$2.3 million
(2001: US$5.0 million) and a net fair value loss, as disclosed in the statement
of changes in equity, of US$69.5 million (2001: US$70.0 million, net fair value
gain) before tax.
No new Standards applicable to Lihir, require changes to the Group's accounting
policies. There were no other changes in accounting policy for 2002.
Although a number of exposure drafts have been issued there are no new
effective International Financial Reporting Standards for 2003. Lihir does not
anticipate any changes in accounting policies for 2003.
NOTE 3: SPECIAL MINING LEASE
The Special Mining Lease was issued on 17 March 1995 and has a term of 40
years. Under the Mining Act it may be renewed for subsequent 20-year periods
at the discretion of the PNG Government.
NOTE 4: REQUIREMENTS REGARDING CASH RESERVES
The Papua New Guinea Central Banking (Foreign Exchange and Gold) Regulations
generally require PNG companies to hold all cash reserves in Kina. Prior
approval of the Bank of Papua New Guinea is required to convert funds from Kina
into other currencies.
Under the Mining Development Contract, however, the Company has permission to
retain funds in foreign currencies to meet its obligations.
NOTE 5: DIVIDEND RESTRICTIONS
The Syndicated Finance Facility signed on 22 November 2000 permits the payment
of dividends and other distributions only if certain conditions are met. Lihir
may generally at any time prior to the next Calculation Date (30 June and 31
December each year as defined in the agreement) withdraw all or part of any
excess over a specified minimum cash balance in an offshore account for its own
purposes (including any distribution or payment into an unsecured distribution
account) subject to a debt service cover ratio of not less than 1.25:1 and a
life of mine cover ratio of not less than 2.50:1.
The most recent debt service cover ratio and life-of-mine cover ratio agreed
with ABN Amro Ltd in terms of the agreement were 35.6:1 (2001: 45.0:1) and
42.8:1 (2001: 15.7:1) respectively.
F-12
Table of Contents
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
NOTE 6: OPERATING PROFIT / (LOSS)
2002
2001
2000
US$'000
US$'000
US$'000
Operating profit / (loss) before taxation has been
determined after crediting / (charging):
SALES
Gold sales at spot
183,207
174,719
168,595
Realisation of hedging instruments
13,655
25,764
53,073
Gold lease rate fees
2,339
(185
)
229
Fair value gains
2,227
5,003
—
Realisation of deferred hedging income
15,889
32,071
9,110
Realisation of deferred hedging costs
(4,128
)
(4,217
)
(4,424
)
213,189
233,155
226,583
REFINING, ROYALTY AND MANAGEMENT FEES
Refining costs
(556
)
(604
)
(540
)
Royalties on sales
(3,975
)
(4,016
)
(4,648
)
Management fees
(3,402
)
(3,341
)
(3,127
)
(7,933
)
(7,961
)
(8,315
)
OTHER OPERATING COSTS
Operating consumables
(74,486
)
(65,721
)
(57,428
)
Contracted services
(36,012
)
(28,682
)
(35,819
)
Staff costs
(17,277
)
(17,177
)
(17,138
)
Mining levy
(5,625
)
(7,580
)
(5,499
)
Insurance
(4,210
)
(2,379
)
(2,784
)
Air travel
(3,004
)
(2,173
)
(2,150
)
Operating lease rentals
(1,254
)
(2,035
)
(1,294
)
Consultants
(2,009
)
(1,524
)
(2,073
)
Donations and community assistance
(197
)
(417
)
(364
)
Net foreign exchange gains and losses
(2,537
)
(6,444
)
1,239
Provision for store stock obsolescence
(692
)
(987
)
104
Provision for doubtful debts
(306
)
(215
)
(631
)
Costs deferred and transferred to inventories
19,556
3,080
6,583
Impairment (charge) / reversal: mine properties,
deferred mining costs
37,893
—
(120,645
)
Low grade stockpile impairment
(4,392
)
(5,841
)
(7,965
)
Contract mining cancellation fees
—
—
(7,706
)
Other costs
(11,206
)
(8,091
)
(14,594
)
(105,758
)
(146,186
)
(268,164
)
DEPRECIATION AND AMORTISATION
Depreciation and amortisation of costs of mine properties
(26,745
)
(31,552
)
(34,801
)
Other
(390
)
(347
)
(314
)
(27,135
)
(31,899
)
(35,115
)
OPERATING COSTS
(140,826
)
(186,046
)
(311,594
)
NET FINANCING COSTS
Interest income
1,015
1,805
2,822
Finance costs
(3,705
)
(6,164
)
(17,166
)
(2,690
)
(4,359
)
(14,344
)
F-13
Table of Contents
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
NOTE 7: CASH AND CASH EQUIVALENTS
2002
2001
2000
US$'000
US$'000
US$'000
Cash at bank and on hand
23,304
24,201
29,428
Short term deposits with financial institutions
10,513
13,714
11,395
33,817
37,915
40,823
Bank overdraft
(1,297
)
—
—
32,520
37,915
40,823
NOTE 8: NET CASHFLOW FROM OPERATING ACTIVITIES
2002
2001
2000
US$'000
US$'000
US$'000
Reconciliation of cash flow from operating activities to
operating profit/(loss) after tax
Operating profit/(loss) after tax
53,247
59,176
(99,355
)
Depreciation and amortisation
27,135
31,899
35,115
Revaluation of financial instruments
(2,227
)
(5,003
)
—
Acquisition costs
—
—
1,814
Asset impairment charge/(reversal): mine properties
(36,960
)
—
116,359
Asset impairment charge/(reversal): deferred mining costs
(933
)
—
4,286
Impairment of low grade stockpiles
4,392
5,841
7,965
Writedown of other assets
—
—
209
Amortisation of deferred hedging income
(15,889
)
(32,071
)
(9,110
)
Amortisation of deferred hedging costs
4,128
4,217
4,424
Provision for doubtful debts
306
215
652
Profit/loss on disposal of assets
(664
)
233
25
Income tax expense/(benefit)
16,426
(16,426
)
—
(Increase)/decrease in debtors
8,590
14,848
(17,818
)
(Increase)/decrease in inventories
(18,520
)
1,856
(16,622
)
(Increase)/decrease in deferred mining costs
(3,670
)
(2,846
)
10,499
(Decrease)/increase in creditors
(12,230
)
8,480
(699
)
De-recognition of creditors balances
—
(6,692
)
—
(Decrease)/increase in rehabilitation provision
293
241
280
(Decrease)/increase in other operating assets and liabilities
(607
)
(1,887
)
1,104
Net cash flow from operating activities
22,817
62,081
39,128
F-14
Table of Contents
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
NOTE 9: INVENTORIES
2002
2001
2000
US$'000
US$'000
US$'000
CURRENT
Stores
30,109
26,778
27,882
Less: Provision for obsolescence
(2,574
)
(1,882
)
(896
)
27,535
24,896
26,986
Production work in progress
1,652
2,261
2,750
Finished goods
5,857
1,833
973
Ore stockpiles
11,928
3,853
9,831
19,437
7,947
13,554
Total current inventories
46,972
32,843
40,540
NON-CURRENT
Ore stockpiles
47,896
43,637
37,796
Less: Impairment provision
(47,896
)
(43,637
)
(37,796
)
Ore stockpiles
—
—
—
Total inventories
46,972
32,843
40,540
Current stockpiled ore mainly relates to run-of-mine (ROM) stockpile and
crushed ore stocks ready for processing into finished goods within the next 12
months. These are valued at the lower of cost and net realisable value. Cost
includes mining costs, costs of conversion (crushing and conveying costs) and
an allocation of fixed and variable production overheads based on their
contained gold.
At 31 December 2002, non-current stockpiles were fully provided against, based
on their net realisable values.
The cost of finished goods inventory is stated at the lower of cost and net
realisable value.
F-15
Table of Contents
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
NOTE 10: RECEIVABLES
2002
2001
2000
US$'000
US$'000
US$'000
CURRENT
Trade receivables
—
—
8,649
VAT refunds receivable
—
12,496
16,826
Other
Debtors — related parties
2,247
428
481
Other amounts receivable from third parties:
3,752
3,244
3,041
Less: Provision for doubtful debts
(1,347
)
(1,041
)
(826
)
4,652
15,127
28,171
NON-CURRENT
Other Debtors — related parties
2,791
1,175
2,010
Other amounts receivable
2
5
5
2,793
1,180
2,015
Total amounts receivable
7,445
16,307
30,186
Leases accounted for as a lessor
(included in "other debtors — related parties").
The Company leases earthmoving equipment to the Lakaka Group, a landowner company, under two separate arrangements whereby the
substantial risks and rewards of ownership are transferred to the other party. The term of the leases are 48 months and 36 months
respectively, with commencement dates of November 2000 and October 2002. The interest rate for both leases is 9% per annum. A
non-guaranteed residual amount of K100,000 is accounted for as a benefit to the Company under the terms of the earlier lease. No
unearned finance income or contingent rents have been recognised as income.
2002
2001
2000
US$'000
US$'000
US$'000
Gross investments in finance leases
Amounts receivable not later than one year
1,006
457
571
Amounts receivable > 1 year and < than 5 years
1,138
647
1,379
Amounts receivable later than five years
—
—
—
2,144
1,104
1,950
Unearned finance income on finance leases
(222
)
(116
)
(277
)
Net investment in finance leases
1,922
988
1,673
Amounts receivable not later than one year
864
383
435
Amounts receivable > 1 year and < than 5 years
1,058
605
1,238
Amounts receivable later than five years
—
—
—
1,922
988
1,673
F-16
Table of Contents
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Loan
(included in "other debtors — related parties")
The Group has extended unsecured loans, repayable in monthly instalments, to landowner companies. The
initial loan to the Lakaka Group for PGK 2.5 million, is repayable over a ten year term at an interest rate
of 10%. In 2002 the Group extended an unsecured loan to Kuridala Ltd of US$3.2 million at an interest rate
of 8.77%, following the termination of a lease financing facility used to fund mining equipment owned by
Kuridala Ltd.
2002
2001
2000
US$'000
US$'000
US$'000
Gross investments in loan
Amounts receivable not later than one year
1,600
104
130
Amounts receivable > 1 year and < than 5 years
1,671
417
522
Amounts receivable later than five years
268
409
648
3,539
930
1,300
Unearned finance income on loan
(423
)
(316
)
(482
)
Net investment in loan
3,116
614
818
Amounts receivable not later than one year
1,383
45
46
Amounts receivable > 1 year and < than 5 years
1,496
232
258
Amounts receivable later than five years
237
337
514
3,116
614
818
NOTE 11: DEFERRED MINING COSTS
2002
2001
2000
US$'000
US$'000
US$'000
CURRENT
Deferred mining costs
4,185
1,087
11,947
Less: impairment provision
—
(225
)
(2,732
)
4,185
862
9,215
NON-CURRENT
Deferred mining costs
17,720
17,994
6,794
Less: impairment provision
—
(1,554
)
(1,554
)
17,720
16,440
5,240
Total Deferred Mining Costs
21,905
17,302
14,455
The life of mine plan allows for a number of distinct phases, of which phases 1
to 3 have now been completed, with all previously deferred mining costs having
been fully expensed in the accounts as at the end of 2002.
2002
2001
2000
US$'000
US$'000
US$'000
Deferred Waste by Phase
Phase 3:
—
862
9,215
Phase 4:
20,354
16,440
5,240
Phase 5:
1,551
—
—
Total Deferred Mining Costs
21,905
17,302
14,455
Phase 4 is scheduled for completion by fourth quarter 2005, by which time
deferred mining costs for the phase will be fully expensed in the accounts.
Phase 5 is scheduled for completion in the third quarter of 2008.
F-17
Table of Contents
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
NOTE 12: MINE PROPERTIES
2002
2001
2000
US$'000
US$'000
US$'000
CAPITAL WORKS IN PROGRESS
Cost brought forward
21,436
9,274
14,483
Acquisitions and disposals
25,981
36,898
53,499
Transfers to mining properties
(28,935
)
(24,736
)
(58,708
)
Costs carried forward
18,482
21,436
9,274
MINE PROPERTIES
Plant and equipment
Cost brought forward
536,744
515,883
458,165
Transfers from capital works in progress
27,720
23,348
58,030
Disposals
(3,497
)
(2,487
)
(312
)
Cost carried forward
560,967
536,744
515,883
Depreciation brought forward
(288,892
)
(267,644
)
(179,077
)
Charge for the year
(20,152
)
(23,155
)
(24,218
)
Impairment (charge) / reversal
24,157
—
(64,494
)
Transfer to other mining properties
—
—
—
Disposals
2,618
1,907
145
Depreciation carried forward
(282,269
)
(288,892
)
(267,644
)
Net book value
278,698
247,852
248,239
F-18
Table of Contents
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
2002
2001
2000
US$'000
US$'000
US$'000
Land and Buildings
Cost brought forward
77,120
77,049
76,870
Transfers from capital works in progress
819
71
179
Cost carried forward
77,939
77,120
77,049
Depreciation brought forward
(47,537
)
(45,843
)
(29,609
)
Charge for the year
(1,403
)
(1,694
)
(2,341
)
Impairment reversal/(charge)
2,753
—
(13,893
)
Depreciation carried forward
(46,187
)
(47,537
)
(45,843
)
Net book value
31,752
29,583
31,206
Deferred Expenditure
Cost brought forward
267,454
266,137
265,639
Transfers from capital works in progress
396
1,317
498
Transfer from other mining properties
—
—
—
Cost carried forward
267,850
267,454
266,137
Depreciation brought forward
(156,778
)
(150,075
)
(103,860
)
Charge for the year
(5,190
)
(6,703
)
(8,242
)
Impairment reversal/(charge)
10,050
—
(37,972
)
Transfers from other mining properties
—
—
—
Depreciation carried forward
(151,918
)
(156,778
)
(150,074
)
Net book value
115,932
110,676
116,063
Sub-total
Cost brought forward
881,318
859,069
800,674
Transfers from capital work in progress
28,935
24,736
58,707
Disposals
(3,497
)
(2,487
)
(312
)
Cost carried forward
906,756
881,318
859,069
Depreciation brought forward
(493,207
)
(463,562
)
(312,546
)
Charge for the year
(26,745
)
(31,552
)
(34,801
)
Impairment reversal/(charge)
36,960
—
(116,359
)
Disposals
2,618
1,907
145
Depreciation carried forward
(480,374
)
(493,207
)
(463,562
)
Net book value
426,382
388,111
395,508
F-19
Table of Contents
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
2002
2001
2000
US$'000
US$'000
US$'000
Rehabilitation
Cost brought forward
9,931
8,107
6,896
Additions and deductions
1,383
1,824
1,211
Cost carried forward
11,314
9,931
8,107
Amortisation brought forward
(1,650
)
(1,303
)
(989
)
Charge for the year
(390
)
(347
)
(314
)
Amortisation carried forward
(2,040
)
(1,650
)
(1,303
)
Net book value
9,274
8,281
6,804
Total mine properties
454,138
417,830
411,586
NOTE 13: ACCOUNTS PAYABLE
2002
2001
2000
US$'000
US$'000
US$'000
CURRENT
Trade creditors and accruals
14,204
15,334
14,915
Mining levy payable
—
11,257
7,721
Amounts payable to related parties
178
21
2,187
14,382
26,612
24,823
NOTE 14: PROVISIONS
2002
2001
2000
US$'000
US$'000
US$'000
CURRENT
Employee provisions
2,218
2,927
3,644
Other
—
—
779
2,218
2,927
4,423
NON CURRENT
Employee provisions
858
756
721
Rehabilitation provision
- opening balance
11,533
9,466
7,975
- additional provision
1,383
1,801
1,211
- interest charge
293
266
280
- closing balance
13,209
11,533
9,466
Other
—
—
426
14,067
12,289
10,613
Total provisions
16,285
15,216
15,036
F-20
Table of Contents
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Current employee provisions relate to the following short-term benefits which
are payable within 12 months:
2002
2001
2000
US$'000
US$'000
US$'000
Annual leave
800
686
678
Sick leave
26
20
—
Rio Superannuation
—
1
1,530
Service bonus
1,392
2,220
1,436
Total
2,218
2,927
3,644
The Rio Superannuation provision contributions are due and payable by the Group
to an independent multi employer superannuation fund. Due to the fund's
surplus position the Group enjoyed a "contributions holiday" through until
December 2002, with only employee contributions being remitted. Employer
contributions recommenced as of January 2003.
The service bonus is a scheme whereby employees contribute 10% of their gross
fortnight / monthly salary to the Group and are entitled to receive back their
contributions plus a further 10% from the Group, to be paid out in the current
period.
All non-current employee provisions relate to long-service leave entitlements
and are determined in accordance with the requirements for other long-term
employee benefits.
NOTE 15: INCOME TAX
2002
2001
2000
Income tax expense for the year has been calculated as follows:
US$'000
US$'000
US$'000
Profit/(Loss) for the year
69,673
42,750
(99,355
)
Prima facie income tax expense / (benefit) on operating profit
/ (loss) at 30%
20,902
12,825
(34,774
)
Tax effect of exempt and non-deductible items
- Non-deductible entertainment
1
1
1
- Non-deductible superannuation
—
(459
)
22
- Non deductible rehabilitation
—
184
121
- Exempt interest income
—
—
2
- Tax loss / provision against subsidiary not recognised
213
134
228
- Foreign exchange (gains) / losses
761
—
—
- Adjustment to tax bases
(10,749
)
—
—
- Deferred tax assets unrecognised / (recognised)
5,298
(29,111
)
10,020
- Income tax rate change (35% to 30%)
—
—
24,380
Income tax expense / (benefit)
16,426
(16,426
)
—
Deferred tax position
Depreciation and impairment differences
98,458
105,160
129,057
Tax loss
33,404
26,817
—
Derivative financial instruments
(2,169
)
—
—
Fair value reserve
16,097
(16,426
)
—
Provisions
3,280
1,982
1,517
Deferred hedging income
—
—
15,446
Prepayments
(86
)
(87
)
(84
)
Other
(10,651
)
(510
)
112
Less deferred tax assets not recognised
(138,333
)
(116,936
)
(146,048
)
Net deferred tax
—
—
—
F-21
Table of Contents
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
At 31 December 2002 the group had a net deferred tax position of US$ nil (2001:
US$ nil, 2000: US$ nil), a current period tax expense of US$16.4 million (2001:
US$16.4 million tax benefit, 2000: US$ nil) included in the income statement
and a tax benefit of US$16.4 million (2001: US$16.4 million tax charge, 2000:
US$ nil) included in equity. At that date the group also had unrecognised tax
losses of US$111.3 million (2001: US$89.4 million, 2000: US$ nil) and net
deductible temporary differences of US$349.8 million (2001: US$300.4 million,
2000: US$486.0 million). The tax losses can be carried forward for a period
not exceeding 20 years.
Deferred tax assets have not been recognised beyond deferred tax liabilities
because the group does not consider that the realisation of the tax benefits
through future taxable profits as probable, which implies a high level of
likelihood. The recognition of deferred tax assets to the extent of deferred
tax liabilities is required under IAS 12, as they relate to income taxes levied
by the same taxation authority and the taxable temporary differences are
expected to reverse in the same period as the deductible temporary differences.
In accordance with IAS 12 a Deferred
Tax Asset of US$16.4 million was
recognised, being to the extent of the Deferred Tax Liability, on the 31
December 2001. This arose as a consequence of the valuation of the effective
portion of the hedgebook being US$54.8 million in-the-money. With the
effective portion of the hedgebook valuation being US$73.0 million
out-of-the-money at 31 December 2002, the Deferred Tax Liability was
effectively eliminated.
As Lihir does not consider the realisation of its tax benefits as probable, no
Deferred Tax Asset has been recognised. On the same basis, the Deferred Tax
Asset previously raised on the 31 December 2001 was removed from the Balance
Sheet, giving rise to a tax charge of US$16.4 million. This tax charge is
non-cash and offsets the non-cash tax benefit of US$16.4 million recognised in
the prior year.
NOTE 16: REMUNERATION AND RETIREMENT BENEFITS
(a)  Directors' remuneration, including the value of benefits received during the year:
2002
2001
2000
US$'000
US$'000
US$'000
Baker, Phillips (resigned 23 January, 2002)
—
—
—
Baylis, Joseph
—
—
—
Eppler, Randy (resigned 19 April, 2002)
—
—
—
Garnaut, Ross
83
66
72
Leslie, Jonathan
—
—
—
Loudon, Geoff
19
23
28
Merton, Michael (resigned 15 May, 2000)
—
—
162
O'Reilly, John (resigned 1 November, 2002)
—
—
—
Roberts, Alan
330
300
303
Siaguru, Anthony
17
17
20
Soipang, Mark
—
2
2
Swan, Neil
298
—
—
In addition, during the year the Company paid a premium of US$55,000 (2001: US$46,000, 2000: US$34,125) for directors and
officers liability insurance.
F-22
Table of Contents
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
( b) The number of employees, not including directors, whose remuneration and benefits
exceeded K100,000 fall into the following bands:
Remuneration and benefit band
Number of Employees
US$
PGK
2002
2001
2000
$24,000 - $26,400
K100,000 - K110,000
1
—
1
$26,401 - $28,800
K110,001 - K120,000
—
12
—
$28,800 - $31,200
K120,001 - K130,000
1
9
2
$31,201 - $33,600
K130,001 - K140,000
2
4
—
$33,601 - $36,000
K140,001 - K150,000
2
2
—
$36,001 - $38,400
K150,001 - K160,000
—
3
—
$38,401 - $40,800
K160,001 - K170,000
4
2
—
$40,801 - $43,200
K170,001 - K180,000
2
—
—
$43,201 - $45,600
K180,001 - K190,000
1
1
1
$45,601 - $48,000
K190,001 - K200,000
1
—
—
$48,001 - $50,400
K200,001 - K210,000
3
—
2
$50,401 - $52,800
K210,001 - K220,000
4
—
2
$52,801 - $55,200
K220,001 - K230,000
3
—
3
$55,201 - $57,600
K230,001 - K240,000
1
3
5
$57,601 - $60,000
K240,001 - K250,000
3
3
2
$60,001 - $62,400
K250,001 - K260,000
1
3
8
$62,401 - $64,800
K260,001 - K270,000
—
5
6
$64,801 - $67,200
K270,001 - K280,000
1
1
5
$67,201 - $69,600
K280,001 - K290,000
1
3
3
$69,601 - $72,000
K290,001 - K300,000
—
7
5
$72,001 - $74,400
K300,001 - K310,000
1
5
4
$74,401 - $76,800
K310,001 - K320,000
—
7
1
$76,801 - $79,200
K320,001 - K330,000
—
6
2
$79,201 - $81,600
K330,001 - K340,000
1
3
2
$81,601 - $84,000
K340,001 - K350,000
2
2
2
$84,001 - $86,400
K350,001 - K360,000
4
—
—
$86,401 - $88,800
K360,001 - K370,000
4
—
—
$88,801 - $91,200
K370,001 - K380,000
9
—
1
$91,201 - $93,600
K380,001 - K390,000
10
1
1
$93,601 - $96,000
K390,001 - K400,000
6
6
—
$96,001 - $98,400
K400,001 - K410,000
4
1
—
$98,401 - $100,800
K410,001 - K420,000
7
—
1
$100,801 - $103,200
K420,001 - K430,000
2
1
—
$103,201 - $105,600
K430,001 - K440,000
1
—
—
$105,601 - $108,000
K440,001 - K450,000
—
1
—
$108,001 - $110,400
K450,001 - K460,000
1
—
1
$112,801 - $115,200
K470,001 - K480,000
1
—
—
$115,201 - $117,600
K480,001 - K490,000
2
1
—
$117,601 - $120,000
K490,001 - K500,000
1
—
—
$124,801 - $127,200
K520,001 - K530,000
1
—
—
$127,201 - $129,600
K530,001 - K540,000
1
—
—
$136,801 - $139,200
K570,001 - K580,000
—
1
—
$145,001 - $147,400
K610,001 - K620,000
—
—
1
$168,000 - $170,400
K700,001 - K710,000
1
—
—
Note: US$ bands are based on 2002 PGK exchange rates and therefore differ from
those reported in prior years.
F-23
Table of Contents
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
NOTE 17: RETIREMENT BENEFITS
Senior employees of the Group participate in a retirement benefit plan, and
contributions are made by the Group to the plan based on 15% of the employee's
base salary. Due to the Fund's surplus position the Group enjoyed a
"contributions holiday" through until December 2002, with only employee
contributions being remitted. Employer contributions recommenced as of January
2003. The plan is a multi-employer plan, and employee benefits may be either
defined contribution or defined benefit, depending on elections made at time of
entry.
The Group also participates in the National Superannuation Fund of Papua New
Guinea in respect of its Papua New Guinean employees. The Company contributes
to this fund at the statutory rate of 9% (2001: 9%, 2000: 7%) of salary, and
contributions made during the year amounted to US$512,359 (2001: US$535,369,
2000: US$367,000). This is a multi-employer plan, and members' benefits are
defined contribution.
NOTE 18: AUDITORS' REMUNERATION
2002
2001
2000
US$'000
US$'000
US$'000
Fees paid/payable to the
Group's auditors for:
Auditing the Financial Statements
PricewaterhouseCoopers, PNG Firm
127
167
89
PricewaterhouseCoopers, Overseas Firms
25
439
—
Other services (Tax)
73
48
54
225
654
143
NOTE 19: PAID UP CAPITAL
US$'000
2002
2001
2000
(a) Issued and paid up capital
Ordinary
shares
Opening balance
873,822
873,822
819,225
Shares issued
—
—
145,157
Shares reclassified as "B" shares: Treasury shares
—
—
(90,560
)
Closing balance
873,822
873,822
873,822
Number of shares
2002
2001
2000
(b) Issued and paid up capital
Opening balance
1,142,334
1,142,334
1,083,206
Shares issued
—
—
220,655
Treasury shares: reclassified as "B"shares
—
—
(161,527
)
Closing balance
1,142,334
1,142,334
1,142,334
Consisting of:
Total shares
1,303,861
1,303,861
1,303,861
Treasury shares
(161,527
)
(161,527
)
(161,527
)
Closing balance
1,142,334
1,142,334
1,142,334
All shares in the Company and the Group are ordinary shares, all being of the same class, (other than
Treasury shares), having equal participation and voting rights. The Treasury shares are classified as "B"
shares and arise from the merger with Niugini Mining Limited. These shares confer no voting rights, no
rights to participation in dividends, are not transferable and are redeemable at the option of Lihir Gold
Limited.
In accordance with the Papua New Guinea Companies Act, par values are not attributable to shares and there
is no requirement for disclosure of authorised capital.
F-24
Table of Contents
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
NOTE 20: CAPITAL AND LEASING COMMITMENTS
(a)  Operating Lease Commitments
Non-cancellable operating leases contracted for but
not capitalised in the accounts
2002
2001
2000
US$'000
US$'000
US$'000
Payable
- not later than one year
324
1,322
1,806
- later than one year but not later than 2 years
—
280
706
- later than two years but not later than 5 years
—
—
—
324
1,602
2,512
(b)  Capital Expenditure Commitments
Capital expenditure commitments contracted for:
2002
2001
2000
US$'000
US$'000
US$'000
Payable
- not later than one year
10,500
6,930
13,516
- later than one year but not later than 2 years
—
—
—
10,500
6,930
13,516
NOTE 21: CONTINGENT LIABILITIES
Environmental
The Company's mining and exploration activities are subject to various laws and
regulations governing the protection of the environment, including the
Environmental Plan agreed with the Government of Papua New Guinea. These laws
and regulations are continually changing and are generally becoming more
restrictive. The Company conducts its operations so as to protect public health
and the environment and believes its operations are in compliance with all
applicable laws and regulations. The Company's environmental and management
program addresses continual monitoring of any effects on the environment,
together with assessments of the work necessary to rehabilitate areas affected
by mining operations after the eventual closure of operations. The Company has
made, and expects to make in the future, expenditures to comply with such laws
and regulations, but cannot predict the amount of such future expenditures.
Estimated future rehabilitation costs are based principally on the Company's
estimates of rehabilitation and restoration activities and costs pursuant to
the Environmental Plan. At December 31, 2002, 2001 and 2000 $13.2 million,
$11.5 million and $9.4 million, respectively, were accrued for rehabilitation
costs for areas disturbed to date. In addition, the Company has been involved
in several matters concerning environmental obligations associated with former
mining activities. Generally, these matters concerned developing and
implementing remediation plans at the Red Dome mine site in Queensland,
Australia, which was formerly operated by Niugini Mining (Australia) Pty
Limited, a fully owned subsidiary of the Company. This site has subsequently
been sold in 2003, and the purchaser has assumed full responsibility for
environmental remediation.
Depending upon the ultimate scope and cost of work undertaken during final
rehabilitation, the Company believes that it is reasonably possible that the
liability for these matters could be as much as 50% greater or 25% lower than
the amount accrued at December 31, 2002. The amounts accrued for these matters
are reviewed periodically based upon facts and circumstances available at the
time. Changes in estimates are charged to
Costs and expenses, Other
in the
period estimates are revised.
Guarantees
As part of the Group's support of Lihirian owned businesses, the Group has
provided a number of guarantees to various financiers in favour of Lihirian
companies. These guarantees total approximately US$0.3 million (2001: US$0.7
million, 2000: US$1.5 million).
F-25
Table of Contents
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Claims
In December 2000 the Company's wholly owned subsidiary — Niugini Mining
(Australia) Pty Limited — terminated a sales agreement for seven mining leases
located in North Queensland. The purchaser commenced an action against Niugini
Mining (Australia) Pty Limited in the Supreme Court of Queensland, seeking to
have the termination revoked and unspecified damages.
The action was struck out by the court in October 2001 because of the
purchaser's failure to prosecute its action against Niugini Mining (Australia)
Pty Limited. The purchaser is free to lodge a new action and threatened to do
so in mid-2002, however, at the time of publication, has not done so. Niugini
Mining (Australia) Pty Ltd has entered into a sale agreement to sell of its
North Queensland assets, including the seven mining leases to Kagara Zinc
Limited, which is aware of the previous litigation. Completion of the sale of
these mining leases is due in March 2003.
In June 2001 Niugini Mining (Australia) Pty Limited became a party to a native
title claim over some of its mining tenements in North Queensland. Even if
this claim is successful it should not impact on the mining tenements held by
Niugini Mining (Australia) Pty Limited, since the
Native Title Act
1993 (Cth)
has confirmed that rights conferred by valid tenements prevail over any native
title rights which may exist. Niugini Mining (Australia) Pty Limited's mining
tenements that are covered by this native title claim are being sold to Kagara
Zinc Limited (as discussed above), which is aware of the claim.
Niugini Mining Limited received claims for unspecified damages relating to the
decommissioned Mt Victor mine in Papua New Guinea. These claims date back
several years and the Company is seeking to have them removed from the court
list, as they have not been pursued. The Company believes from legal advice
obtained that neither of these claims has substance and, if required, intends
to defend both vigorously.
F-26
Table of Contents
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
NOTE 22: FINANCE FACILITIES
The major facilities are summarised as follows:
(a)
Project Financing Facility
The Syndicated Finance Facility, signed on 22 November 2000, is a US$50
million revolving credit facility arranged and underwritten by ABN –AMRO
Australia Limited. Commonwealth Bank of Australia, Deutsche Bank AG,
Macquarie Bank Limited and SG Australia Limited are participating with ABN
AMRO Australia Limited as financiers of the structure. The interest
applicable to the facility, inclusive of political risk insurance, is
2.9% over LIBOR. The facility limit reduces as follows:
30 June 2003
US$10 million
30 June 2004
US$10 million
30 June 2005
US$30 million
Mandatory prepayments are required under the Finance Facility under
certain conditions. The Company has pledged its assets as collateral and
has provided a range of covenants and warranties in relation to the
facility (Refer to Note 5).
Events of Default: In addition to the normal default provisions relating
to non payment, financial distress, misrepresentation, cross default and
breach of undertakings, the agreement includes default provisions covering
material adverse change, expropriation, war and political violence and
exchange control.
The US$50 million facility agreement also includes financial covenants
that would trigger default if at December 31 and June 30 of each year the
debt service cover ratio for the next twelve months is less than 1.0 or
the life of mine debt cover ratio is less than 1.5.
If an event of default is continuing the lenders, acting on majority
consent, may cancel the revolving credit commitment and accelerate
repayment of the loan.
Review Events: If, without consent of the agent (acting on the
instructions of all the lenders), Rio Tinto sells in whole or in part its
current shareholding in Lihir or the manager of the project ceases to be a
wholly owned subsidiary of Rio Tinto, the Agent may give notice to Lihir,
within 21 days of becoming aware or being notified of such an event:
•
requiring the US$50 million revolving credit be immediately
restructured in a manner acceptable to the Agent; or
•
requiring the US$50 million revolving credit be repaid and
cancelled within 180 days from such notification.
(b)
Loan Facility European Investment Bank ("EIB")/ Mineral Resources
Development Company Ltd ("MRDC")
The Company entered into an Agreement with EIB and MRDC whereby the
European Investment Bank has loaned funds to MRDC who then on lent those
funds to the Company. The amount of the loan was US$26.5 million when
drawn down. The funds are provided to MRDC at a concessionary rate of
interest. The interest rate payable by the Company is 8.42%. The Loan
Principal is repayable in 16 semi-annual instalments commencing four years
after loan signature. The Loan is unsecured. The balance on Lihir's
subordinated debt was reduced from US$34 million to US$25 million as part
of loan restructuring in 2000.
F-27
Table of Contents
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
The loan contains Event of Default provisions that, if satisfied, give
EIB/MRDC the right to demand immediate repayment of the loan. These
provisions concern events such as material misrepresentation of fact,
failure to pay obligations under the loan when due, insolvency or
liquidation of the Company, abandonment of a substantial part of the
Company's business, substantial reduction in the net worth of the Company,
default on other major loan agreements, and any material adverse effect on
the Company's ability to service the loan.
The following table details the profile of debt repayments (based on the
outstanding balance of the Syndicated Finance Facility at 31 December 2002 of
US$23.009 million):
Syndicated
Syndicated
Finance
Finance
EIB
EIB
Facility
Facility
Facility
Facility
Total
Total
US$ 000
US$ 000
US$ 000
US$ 000
US$ 000
US$ 000
Repayment Maturity
2002
2001
2002
2001
2002
2001
Current
Less than one Year
—
—
3,510
3,775
3,510
3,775
Non-current
Between one and two years
—
3,510
3,510
3,510
3,510
Between two and three years
23,009
10,000
3,510
3,510
26,519
13,510
In excess of three years
—
13,009
7,019
10,529
7,019
23,538
23,009
23,009
14,039
17,549
37,048
40,558
Total
23,009
23,009
17,549
21,324
40,558
44,333
In the current low interest rate environment the fair value of the EIB
facility is US$21.8 million.
NOTE 23: FINANCIAL RISK MANAGEMENT
The group is exposed to a variety of financial risks, including the effects of
changes in debt and equity market prices, foreign exchange and interest rates.
The Groups' overall risk management programme focuses on the unpredictability
of the gold price, seeking to protect the level of income in future years. The
Group uses derivative financial instruments including forward gold sale
agreements and put options to hedge this exposure. It is not Group policy to
engage in speculative transactions.
Risk management is carried out under policies approved by the Board of
Directors. The board provides direction with regards to overall risk
management and has endorsed a written policy covering specific areas including
foreign exchange risk, interest rate risk, credit risk, liquidity risk and the
use of financial instruments.
(1)  Foreign Exchange Risk
The Group is exposed to foreign exchange risk arising from various currency
exposures primarily with respect to the Papua New Guinea Kina and Australian
Dollar. As revenue and a large proportion of expenditure is denominated in
US4, the foreign exchange exposure is deemed a residual risk and the Group
therefore does not hedge its foreign exchange exposure.
(2)  Interest rate risk
The Group's income and operating cashflow are substantially independent to
changes in market interest rates. The Group has no significant interest
income. Of interest bearing liabilities the fixed / floating split is 43%
(2001: 48%, 2000: 23%) and 57% (2001: 52%, 2000: 67%) respectively. A change
in interest rates of 1% will have an approximate income impact of US$0.2
million per annum.
F-28
Table of Contents
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
(3)  Credit risk
For hedging transactions the maximum credit risk at any point in time will be
the difference between the agreed strike price in the contract, and the
prevailing spot price. At the prevailing spot price on the 31 December 2002 of
US$342.75 / oz (2001: US$276.50, 2000: US$272.25) this would have amounted to
US$4 million (2001: US$105.6 million, 2000: US$108.4 million) on an
undiscounted basis, based on the assumption that all counter-parties failed to
meet their obligations. The transactions are spread between six major bullion
banks, and there is no significant concentration of risks amongst those
parties.
All counterparties to these transactions are recognised financial institutions
with a minimum credit rating of Aa3. The Group's risk in the event of any of
the counterparties defaulting on their contractual obligations is limited to
any revenue that may be foregone in the case where the defaulted contract's
strike price exceeds the prevailing spot price at the value date. The company
does not expect any counterparty to fail to meet its obligations.
(4)  Liquidity Risk
The Group engages in prudent liquidity risk management by maintaining
sufficient cash and cash equivalents and ensuring the availability of adequate
committed credit facilities.
NOTE 24: DERIVATIVE FINANCIAL INSTRUMENTS
2002
2001
2000
US$'000
US$'000
US$'000
Derivative Financial Instruments
Current Assets
- Forward contracts
1,948
30,619
—
- Call options bought
—
14
—
- Deferred hedging costs
—
—
4,230
1,948
30,633
4,230
Non-Current Assets
- Spot deferred contracts
—
150
—
- Forward contracts
5,455
25,516
—
- Put options bought
4,582
6,303
—
- Deferred hedging costs
—
—
4,115
10,037
31,969
4,115
Current Liabilities
- Deferred hedging income
6,133
—
32,071
—
—
32,071
Non-Current Liabilities
- Forward contracts
59,704
—
—
- Call options sold
11,915
2,846
—
- Deferred hedging income
—
—
—
71,619
2,846
19,417
Shareholders' Equity — Fair value revaluation reserve
- Spot deferred contracts
—
150
—
- Forward contracts
(46,494
)
51,469
—
- Put options bought
(578
)
3,133
—
- Call options sold
(6,583
)
—
—
- Deferred hedging income
(15,814
)
19,417
—
- Deferred hedging costs
—
(4,127
)
—
- Deferred tax liability
—
(16,426
)
—
(69,469
)
53,616
—
F-29
Table of Contents
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
The estimated net amount of gains contained in the fair value revaluation
reserve which are expected to be reclassified into earnings within the next 12
months is as follows:
2002
US$'000
2001
US$'000
2000
US$'000
Forward contracts
(7,849
)
30,619
—
Deferred hedging income
(191
)
15,889
—
Deferred hedging costs
—
(4,127
)
—
Deferred tax liability
—
(9,186
)
—
(8,040
)
33,195
—
The Group has entered into a series of agreements with financial institutions
in relation to future sales of gold. The purpose of these transactions is to
protect the level of income in future years. It is not Group policy to engage
in speculative hedging activities.
As at 31 December 2002 Lihir's hedge book amounted to 2,180,101 ounces as shown
in the following summary:
Forward Sales
Put Options Bought
Call Options Sold
Committed
Minimum
Minimum
Ounces
Price
Ounces
Price
Ounces
Price
0-3 months
75,994
$
329.47
3-6 months
79,494
$
328.05
6-9 months
79,494
$
329.88
9-12 months
76,994
$
331.05
2004
217,977
$
325.38
20,000
$
335.00
20,000
$
365.00
2005
178,988
$
335.27
95,000
$
320.39
95,000
$
326.71
2006
222,500
$
321.90
39,000
$
325.26
39,000
$
336.74
2007
330,000
$
323.76
96,000
$
319.17
96,000
$
319.08
2008
375,475
$
331.96
40,000
$
335.00
20,000
$
365.00
2009
243,185
$
350.76
2010
10,000
$
327.00
1,890,101
$
330.90
290,000
$
323.66
270,000
$
331.12
Forward sales are transactions against which the Group will be obliged to
deliver when they fall due. The price therefore represents a fixed and
guaranteed amount of revenue.
Bought put options are transactions that will occur at the discretion of the
Group. Should the spot price exceed the strike price of the option at the date
on which the option expires, the Group will allow the option to expire and will
sell the equivalent amount of gold in the spot market. Conversely, if the
strike price is higher than the spot price on that date, the option will be
exercised.
Sold call options are transactions that will occur at the discretion of the
purchaser. Should the spot price exceed the strike price of the option at the
date on which the option expires, a rational purchaser would exercise the
option obliging the Group to deliver gold into the contract at the contracted
strike price.
F-30
Table of Contents
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Spot deferred sales are short term transactions into which the Group has
entered and, while designated against specific future production, do not have a
fixed contracted delivery date, but are rolled forward until the date the sale
occurs. The strike price eventually received will depend on the contango
applied during the intervening period.
Gold lease rate swaps entitle the Group to receive a fixed rate allowance, used
in the determination of the forward contract price, in exchange for an
obligation to pay a floating rate, where settlement occurs on a periodic basis.
The Group does not enter into hedging transactions that have provisions for
margin calls.
The minimum total revenue generated from these programs will be US$719 million
(2001: US$737 million, 2000: US$640 million). Revenue generated from the same
number of ounces at the prevailing spot price at 31 December 2002 of US$342.75
(2001: US$276.50, 2000: US$272.25) per ounce would be US$747 million (2001
US$634 million, 2000: US$532 million).
On 31 December 2002, the estimated fair value of the total hedge program as
determined by an independent party, based on the ruling spot price of US$342.75
(2001: US$276.50, 2000: US$272.25), was US$65.8 million out-of-the-money (2001:
US$59.8 million in-the-money, 2000: US$54.4 million in-the-money). At the
spot price plus 10% (US$377.00) the estimated fair value would be approximately
US$150 million out of the money. Conversely at the spot price less 10%
(US$308.5) the estimated fair value would be US$ nil. The fair value of
commodity contracts is estimated based on quotes from the market makers of
these instruments and represents the estimated amounts that the Company would
expect to receive or pay to terminate the agreements at the reporting date.
Fair value of options is an estimate based on relevant market information such
as: volatility of similar options, futures prices and the contracted strike
price.
Net profit for 2002 included revaluation revenue relating to ineffective hedges
of US$2.3 million (2001: US$5.0 million, 2000: US$ nil). The hedge
effectiveness provisions of IAS 39 require that the ineffective portion of the
hedge be passed through the income statement. During the latter part of 2000
and early 2001, gold lease rates were historically high. In locking in the
gold price for future production, Lihir elected to retain a floating rate
exposure to lease rates by way of gold lease rate swaps. The US$2.3 million
(2001: US$5.0 million, 2000: US$ nil) revenue has primarily arisen due to lease
rates falling to historical levels, across the curve.
The effective portion of the hedge is retained in equity, to be recycled to
earnings on delivery of designated production. At 31 December 2002,
shareholders equity included a hedging fair value reserve of negative US$69.5
million (2001: positive US$53.6 million, 2000: US$ nil).
During the latter half of 2002, following an increase in the gold price to over
US$300 / ounce, approval was sought and obtained from the syndicate lenders to
vary the minimum hedge requirements under the syndicated loan facility,
enabling the hedgebook to be restructured to provide shareholders with
additional exposure to the spot price. This was achieved through the rollout
and re-designation of existing hedge positions against longer dated production.
Any gain or loss recognised on the effective portion of the hedge at the time
of rollout was crystallised in equity to be recycled to earnings on the
delivery of the originally designated production. Subsequent movements in
market value of the effective portion of the re-designated hedge are to be
recycled to earnings on maturity.
The net amount of gains losses, arising from early closure and redesignation of
hedge structures, retained in equity at 31 December 2002 was a loss of US$11.4
million.
The Company does not use financial instruments to hedge future interest rates
or foreign exchange transactions.
NOTE 25: SEGMENT REPORTING
The Group produces gold in Papua New Guinea.
F-31
Table of Contents
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
NOTE 26: RELATED PARTY TRANSACTIONS
Transactions between related parties are on normal commercial terms and
conditions that are no more favourable than those available to other parties.
Lihir Management Company Limited (LMC) manages the Company pursuant to a
Management Agreement dated 17 March 1995. LMC is a wholly owned subsidiary of
Rio Tinto plc, which is a significant beneficial owner of equity in the
Company. LMC receives a management fee according to the terms of this
agreement, which is calculated as the greater of:
•
US$250,000 per month set in 1995, and increased annually thereafter
according to application of the Implicit Price Deflator for the US Gross
National Product, and
•
1.5% of the average operating costs (excluding the management fee)
for the preceding 3 months.
There are three directors who are on the Board of the Company and LMC.
There is one director who is on the Board of the Company and Lakaka Limited.
There is one director who is a consultant to Blake Dawson Waldron, who provide
general legal advice to the Company.
Lihir provided debt to the Lakaka group and to Kuridala during the year as
disclosed in note 10. There are no exposure to losses in these companies apart
from the credit risk exposure for amounts owed. All the amounts advanced are
deemed as recoverable.
The Lakaka Group provides various services to the Company under long term
contracts for earthmoving and road maintenance. In addition, the Lakaka Group
has interests in other entities that provide services in catering, stevedoring
and various retail enterprises. Kuridala provides, for a fixed rental fee, 6
heavy earthmoving trucks used by the Company in its mining operations.
Related Companies
2002
US$'000
2001
US$'000
2000
US$'000
The Rio Tinto Group supplies labour on a
secondment basis and bears expenses on
behalf of the Company which are subsequently recharged to the Company
709
1,434
1,817
LMC Management fee
3,402
3,341
3,127
Interest received from related entities
on finance provided (refer note 10)
281
181
32
Lakaka group supplies various services
to the Group on an arms length basis
4,080
4,255
4,045
Blake Dawson Waldron provide legal
advice to the Group on an arms length
basis
23
11
17
Kuridala, a landowner company, supplies
various services to the group on an arms
length basis
1,710
1,673
265
F-32
Table of Contents
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
NOTE 27: EARNINGS PER SHARE
The number of ordinary shares has been based on the weighted average number of
ordinary shares on issue during the year. At 31 December 2002 no options were
outstanding.
2002
2001
2000
Net profit / (loss) attributable to ordinary shareholders
US$'000
53,247
59,176
(99,355
)
Weighted average number of ordinary shares
'000
1,142,334
1,142,334
1,137,150
Basic EPS (US$/share)
0.047
0.052
(0.087
)
Conversion of options into ordinary shares
'000
—
—
5,076
Diluted number of ordinary shares
'000
1,142,334
1,142,334
1,142,226
Diluted EPS (US$/share)
0.047
0.052
(0.087
)
NOTE 28: MERGER WITH NIUGINI MINING LIMITED
On October 6, 1999 the Company announced its agreement with Niugini Mining
Limited, subject to various conditions, to merge by Scheme of Arrangement under
Papua New Guinea Law. The basis of the merger was set out in the notice of
special meeting forwarded to shareholders on November 27, 1999. Shareholders
on December 15, 1999 approved the required resolutions to progress the merger.
Niugini Mining shareholders also approved the required resolutions in early
January 2000 and final approval from the National Court of Papua New Guinea was
obtained by Niugini Mining on February 1, 2000. The merger was effective on
February 2, 2000.
As a result of the merger, Niugini Mining became a 100 % owned subsidiary of
the Company. Niugini Mining continues to hold 161,527,405 ordinary shares in
the company, which have been reclassified as "B" class shares, refer Note 19.
The fair value of net assets and liabilities acquired in Niugini Mining Limited
were as follows:
US$000
Sundry receivables
1,329
Sundry payables
(1,087
)
Cash and bank
54,355
Investment in Lihir Gold shares
90,560
Fair value of net assets acquired
145,157
Shares issued as consideration
145,157
Less elimination of cross shareholding
(90,560
)
Net proceeds of issuing shares on consolidation
54,597
Cash effect on acquisition
54,355
Cash paid
(1,814
)
Cash obtained
52,541
Contingent liabilities relating to Niugini Mining Limited and its subsidiary
Niugini Mining Australia (Pty) Limited are disclosed in Note 21.
F-33
Table of Contents
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
NOTE 29: RECONCILIATION TO US GAAP
The basis of preparation of these financial statements is set out in Note 1.
These accounting policies vary in certain important respects from the
accounting principles generally accepted in the United States ("US GAAP"). The
material differences affecting the profit and loss account and shareholders'
equity between generally accepted accounting principles followed by the Company
and those generally accepted in the US are summarised below.
(i)
Rehabilitation, restoration and environmental provisions: Under
IFRS, site closure, removal and rehabilitation costs are accounted for
using the full liability method under which the liability is recognised at
the present value of the expected cash outflows when the obligation is
incurred with a corresponding asset that is capitalised as a mine
property. For the purposes of US GAAP, the total (undiscounted) liability
is accrued incrementally over the life of the mine. Also, under IFRS, the
Company records an asset for these costs under the full liability method.
Under US GAAP, no asset would be recorded under the incremental method. In 2003
this difference will largely be eliminated by the adoption of FAS 143 for
US reporting purposes.
(ii)
Project financing: Prior to 1997, certain equity issuance and other
offering costs were capitalized as a part of mine properties for IFRS
purposes. US GAAP requires equity issuance costs to be offset against
shareholders' equity.
(iii)
Interest capitalization as part of mine properties: Under IFRS, only
interest directly attributable to acquiring a qualifying asset is
capitalized whereas under US GAAP, the amount of interest capitalized is
based on an available interest concept, which results in additional
interest being capitalized under US GAAP.
(iv)
Depreciation of mine properties: Depreciation expense under US GAAP
differs from that under IFRS due to the difference in the basis for mine
properties under the two bases of accounting.
(v)
Impairment: Under IAS 36, the impairment test for determining the
recoverable amount of non-current assets is the higher of net selling
price and value in use. At 31 December 31 1999 and again at 31 December
2000, the Company determined that an impairment charge was necessary as
the discounted cash flows were less than the carrying value of the asset.
Under US GAAP, the mine property assets were evaluated for impairment on
an undiscounted basis and, because the sum of expected (undiscounted)
future cash flows exceeded the asset's carrying amount, no impairment loss
was recognised in 1999. During 2000 the undiscounted value of expected
future cash flows were less than the asset's carrying values which
resulted in an impairment provision calculated on the same basis as for
IFRS. In 2002, having revised critical assumptions, including life of
mine, remaining reserves, a long term gold price assumption of $US305 and
a pre-tax real discount rate of 7.0%, the directors resolved to partially
reverse previously recognised impairments, to the value of $US37.9M. US
GAAP does not allow the reversal of impairment provisions previously
recognised.
(vi)
Deferred tax assets: Under US GAAP, changes in the income tax
valuation provision are recognised in the income statement unless they
relate to gains and losses included in comprehensive income but excluded
from net income. During 2001, the valuation provision was reduced with
the recognition of a deferred tax liability related to the fair value of
derivative financial instruments included in other comprehensive income,
and therefore the tax benefit was taken to other comprehensive income
under US GAAP (Refer to note 15).
(vii)
New effective accounting standards for 2003, which will impact on the
Group accounting policies are:
FAS 143: Accounting for asset retirement obligations
FAS 143 adopts the same principles as in IFRS, described in note 1h, with
possible differences arising from the estimate of future costs, the discount
rate and whether a full liability needs to be created. The Group anticipates
that by adopting FAS 143 in 2003, the reconciling difference currently stated
for the restoration and rehabilitation liability will be eliminated.
F-34
Table of Contents
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
The Group does not expect any impact from the adoption of FASB Interpretation
No. 45: "Guarantor's Accounting and Disclosure Requirements for Guarantees,
Including Indirect Guarantees of Indebtedness of Others" or FASB Interpretation
No. 46 "Consolidation of Variable Interest Entities".
2002
2001
2000
US$'000
US$'000
US$'000
Shareholders' Equity in accordance with IAS GAAP
426,410
496,248
383,456
Adjusted as follows:
Rehabilitation, restoration and environmental (i)
• Provisions
8,874
8,255
7,198
• Capitalized rehabilitation costs (See Note 12)
(9,274
)
(8,281
)
(6,804
)
Mine properties — project financing costs (ii)
(11,470
)
(11,470
)
(11,470
)
Mine properties — capitalised interest (iii)
1,611
1,611
1,611
Depreciation of mine properties (iv)
(8,404
)
(8,404
)
(8,404
)
Impairment provision under IAS GAAP (vi)
319,524
357,417
357,417
Impairment provision under US GAAP (vi)
(339,154
)
(339,154
)
(339,154
)
Accumulated adjustments under US GAAP
(38,293
)
(26
)
394
Shareholders' Equity under US GAAP
388,117
496,222
383,850
2002
2001
2000
US$'000
US$'000
US$'000
Net income / (loss) in accordance with IAS GAAP
53,247
59,176
(99,355
)
Adjusted as follows:
Rehabilitation, restoration and environmental provisions (i)
(374
)
(420
)
(316
)
Mine properties — capitalised interest (ii)
—
—
—
Depreciation of mine properties (iii)
—
—
(9,516
)
Impairment charge / (reversal) under IAS GAAP
(37,893
)
—
120,645
Impairment charge under US GAAP
—
—
(339,154
)
Deferred tax benefit under IAS GAAP
16,426
(16,426
)
—
Deferred tax benefit under US GAAP
—
—
—
Net income / (loss) under US GAAP
31,406
42,330
(327,696
)
US GAAP earnings per share (US$/share)
0.027
0.038
(0.288
)
2002
2001
2000
US$'000
US$'000
US$'000
Comprehensive income
31,406
42,330
(327,696
)
Net income / (loss) under US GAAP
31,406
42,330
(327,696
)
Other comprehensive income under IAS GAAP
(123,085
)
53,616
—
Release of valuation allowance under US GAAP (vi)
(16,426
)
16,426
—
Other comprehensive income under US GAAP
(139,511
)
70,042
—
Comprehensive income / (loss) under US GAAP
(108,105
)
112,372
(327,696
)
F-35
Table of Contents
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
Cash flow statement under US GAAP
In terms of US GAAP bank overdrafts are treated as financing activities and not
as cash. The balance and inflow from financing cash flows per the cash flow
statement under US GAAP would therefore increase by US$1.297 million.
2002
2001
2000
Statement of changes in equity under US GAAP
US$'000
US$'000
US$'000
Retained earnings / (accumulated Losses)
Balance at January 1
(377,601
)
(489,973
)
(163,971
)
Comprehensive income / (loss)
(108,105
)
112,372
(327,696
)
Dividend — stock options
—
—
1,694
Balance at December 31
(485,706
)
(377,601
)
(489,973
)
US$'000
US$'000
US$'000
Paid up capital
Balance at 1 January
873,822
873,822
820,919
Shares issued
—
—
54,597
Additional paid up capital — stock options (expired January 31, 2000)
—
—
(1,694
)
Balance at 31 December
873,822
873,822
873,822
388,116
496,222
383,850
EPS under US GAAP
2002
2001
2000
Net Earnings                      US$'000
31,406
42,330
(327,695
)
Net Earnings Per Common Share — Basic (US$          per share)
0.027
0.038
(0.288
)
Net Earnings Per Common Share — Diluted (US$          per share)
0.027
0.038
(0.288
)
Basic earnings per share is computed by dividing income available to common
stockholders (the numerator) by the weighted average number of common shares
(the denominator) for the period. The computation of diluted earnings per
share is similar to basic earnings per share, except that the denominator is
increased to include the number of additional common shares that would have
been outstanding if the potentially dilutive common shares had been issued.
In loss making periods basic and diluted earnings per share are identical.
Diluted earnings per share also give effect to the impact common stock options
would have on the average common shares outstanding if converted at the
beginning of the year. Stock options are anti-dilutive and therefore were not
included in the calculation of basic and diluted loss per share in 2000. There
were no outstanding options for 2001 or 2002.
The numerator in calculating both basic and diluted earnings per share for each
year is the reported net income determined above for US GAAP purposes. The
denominator is based on the following weighted average number of common shares:
(in thousands)
2002
2001
2000
Basic
1,142,334
1,142,334
1,137,150
Diluted
1,142,334
1,142,334
1,137,150
F-36
Table of Contents
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
SUBSEQUENT EVENTS (UNAUDITED)
The Board of Directors announced at Lihir's Annual General Meeting on April 29
2003 that a dividend of 2 Australian cents per share would be paid to holders
of ordinary shares in the company. The record date, at which time eligibility
to receive the dividend will be determined, has been declared as July 1 2003
and the payment date as July 16 2003.
A Heads of Agreement was signed on April 27 2003 between Lihir Gold, the
Independent State of Papua New Guinea and representatives of Lihirian
landowners which is intended to resolve issues surrounding Lihirian landowners
ownership of equity in the company. Although this agreement is not legally
binding on any party, it is anticipated that the company will,
during the second half of 2003, contribute approximately US$3.5 million to a
community grant scheme.
F-37
Table of Contents
LIHIR GOLD LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
US$ thousands
Schedule II -
Movement in Valuation Allowances
2002
2001
2000
Provision for Doubtful Debts
Balance, beginning of year
1,041
826
195
Additions: charges to costs and expenses
333
215
631
Write-off's
Balance, end of year
1,374
1,041
826
Provision for Stores Stock Obsolescence
Balance, beginning of year
1,882
896
1,000
Additions: charges to costs and expenses
692
986
—
Write-off's
—
—
(104
)
Balance, end of year
2,574
1,882
896
Provision for Impairment of Mining Properties
Balance, beginning of year
340,111
340,111
223,752
Additions: charges to costs and expenses
—
—
116,359
Write-off's
(36,960
)
—
—
Balance, end of year
303,151
340,111
340,111
Provision for Impairment of Deferred Mining Costs
Balance, beginning of year
1,780
4,286
13,020
Additions: charges to costs and expenses
—
—
4,286
Write-off's
(1,780
)
(2,506
)
(13,020
)
Balance, end of year
0
1,780
4,286
F-38