30 Mar 2007

PNG's Kainantu gold mine troubles Highlands Pacific

10:17 am on 30 March 2007

Highlands Pacific's Kainantu gold mine in Papua New Guinea has contributed to plunging the company into suffering total losses of US$63.8 million last year.

The National reports the Auditor PriceWaterhouseCoopers said this yesterday after reviewing the company's annual financial returns for 2006.

They said it was uncertain if the company could "realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report".

In the company's annual financial report, Highlands Pacific managing director Ian Holzberger said the company's operating loss last year amounted to US$27.5 million.

The company was also forced to bring forward a hedging loss of US$36.2 million over its ineffective gold forward sales programme.

According to their financial statement, Highlands Pacific last year only received US$5.9 million for gold sales net of hedge payments, while its payments to suppliers and employees amounted to US$30.66 million.