LGL – Citi rates the stock as Hold, High Risk

Completion of the US$325m raising at A$3.00/share has reduced the broker’s target price to $3.40 (from $3.60). This is driven by 6-7% EPS dilution in 2009 and 2010. The broker maintains its Hold/ High Risk recommendation, but sees possible upside starting to emerge once again in gold stocks as share prices have cooled with the sell-off in the gold price. Sector: Materials.

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Lihir’s Success Comes At A Cost

Lihir Gold (LGL) has managed to become the "other" of Australia’s two locally-owned world class producers despite having all its fortunes once tied to a remote and fickle Papua New Guinean island. Disappointments, delays and disasters at Lihir Island have been par for the course throughout its history leaving gold analysts with a sense of ennui rivalled only by Newcrest’s ((NCM)) much vaunted and highly disappointing Telfer mine.

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