Lihir Gold and Equigold to merge

Lihir Gold Ltd and Equigold NL are to merge their businesses, creating a global pure gold company with a diversified portfolio of high quality operations, a strong financial base and an exceptional growth profile.

The combined group will have world class assets in Australia, West Africa and Papua New Guinea, producing in excess of 1.2 million ounces of gold a year from 2009 at a cash cost in the lowest quartile of global producers.

The market capitalisation of the combined group will be approximately A$9 billion (based on the closing share price of LGL shares as at 19 March 2008), securing its position in the top 30 companies in Australia and among the world’s largest gold producers.

The merger is to be achieved through a Scheme of Arrangement, with Equigold shareholders to receive 33 LGL shares for every 25 Equigold shares they own. Based on the closing prices of LGL shares as at 19 March 2008, the day prior to the announcement of the Scheme, the offer values Equigold shares at approximately A$5.33. This represents a premium of:

- 24.0% to Equigold’s closing price on 19 March 2008, the day prior to the announcement

- 23.5% to the 1 week VWAP of Equigold shares prior to the announcement

- 35.3% to the 90 day VWAP of Equigold shares prior to the announcement

The merger will bring significant benefits to each of the companies and their shareholders. Directors of Equigold and LGL have unanimously supported the proposed merger. Equigold Directors intend to vote the shares they own or control in favour of the Scheme (in the absence of a superior proposal and subject to the Independent Expert concluding that the Scheme is in the best interests of Equigold shareholders).