Tag Archives: Geopacific Resources

Woodlark MP Lashes Out At MRA

Construction work has already started for the Woodlark gold mine. Image: Geopacific Resources.

‘We do not want to repeat the same mistake we did for Misima mine which is just a few kilometers away….’

Post Courier | January 27, 2020

Samarai Murua MP Isi Henry Leonard has hit out at the Mineral Resources Authority (MRA) for acting independently on matters relating to an upcoming mine on Woodlark Island in Milne Bay Province.

Mr Leonard told a media conference last week that MRA had failed to consult provincial and district authorities, LLG and landowners in its dealing with this mining prospect.

Queries raised by the Post-Courier with the MRA were not answered but the MP was reportedly told through his office that mining activities would start following a mining lease awarded six years ago.

The MP’s office also understood that MRA officers flew to Alotau last Thursday to have a meeting with provincial and district authorities.
However, this did not go down well with Mr Leonard who reminded MRA that he represented the people of Woodlark Island and his office should be consulted.

“Even the current company wants to start to with the construction phase prior to a mining lease awarded six years ago, relevant government authorities on the ground should be aware of such intentions and plans,” the MP said.

He said that the mining lease as described by MRA should provide mining development plans, a memorandum of agreement (MOA) between all stakeholders, environmental plan, waste disposal plan, relocation plan for locals living around the vicinity and mining closer plan amongst others.

Mr Leonard said considerable efforts should be undertaken by the MRA for the good of the national, provincial and local level governments and its people.

“We (Samarai Murua) do not want to repeat the same mistake we did for Misima mine which is in the same electorate and just a few kilometers away. We want a MOA and this MOA should be reviewed every four or five years to ensure compliancy and also a mine closure plan should be in place,” the MP said.

He said those were some of the fundamental aspects that Misima Mine failed to capture and the legacy is inflicted on the lives of the people, adding that this was a ‘reminder’ not to be repeated.

Mr Leonard said MRA should communicate with relevant government authorities on the ground and should refrain from directing decisions from Konedabu in Port Moresby.

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Geopacific launches Woodlark construction

Construction has started at the Woodlark gold project. Image: Geopacific Resources.

Salomae Haselgrove | Australian Mining | December 16, 2019

Geopacific Resources has started construction at the Woodlark gold project in the Milne Bay province of Papua New Guinea.

Following a successful $40 million capital raising announced in October, the first design work has begun in preparation for process plant construction.

The work will include road upgrades, new wharf construction, process plant site clearing, Kulumadau Village relocation and Woodlark mine camp upgrades.

Once upgraded, the mine camp will be able to accommodate an additional 250 people.

The civil earthmoving will be completed by HBS Machinery while international project manager Rhodes Projects will build house and village amenities.

Geopacific Resources managing director Ron Heeks said the company was excited to begin construction activities in such a short timeframe since the capital raising.

“Extensive work was undertaken to achieve this commencement date as we aim to deliver gold production in a safe, timely and cost-efficient manner,” Heeks said.

“Geopacific has made a commitment to engage as many Woodlark residents as possible for all aspects of the project, including the Kulumadau relocation.

“This is expected to create a skills transfer and sense of community ownership of the new village and they are excited to see the benefits of skills training, employment opportunities, health and education as a result of Woodlark’s advancement.”

The village will be relocated a short distance to new areas outside the mining lease selected by the residents. New houses, trade stores, churches, schools and other amenities will be built.

With tranche two of the $40 million placement approved, Geopacific’s issued capital share consolidation is under way, converting every 25 shares into one share.

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Geopacific sets up Woodlark development with $45m package

Geopacific’s Woodlark gold project is in the pacific ‘ring of fire’, home to some of the world’s best gold projects. Image: Geopacific.

Australian Mining | October 21, 2019

Geopacific Resources has completed a $40 million share placement to fund development of the Woodlark gold project in Papua New Guinea.

Additionally, Geopacific has also offered eligible Australian and New Zealand shareholders a share purchase plan, which will deliver a further $5 million.

The placement was made to sophisticated and professional investors for 1600 million fully paid ordinary shares at $0.025 per share, representing a 10.7 per cent discount to the last close.

The share purchase plan will be offered at $0.025 per share, allowing shareholders to acquire up to $30,000 of new shares.

Geopacific managing director Ron Heeks was pleased with the result of the capital raising, saying it showed the company’s shareholders were committed to seeing Woodlark start production.

“The capital raising has provided an excellent result, with shareholders demonstrating their commitment to moving Woodlark into production,” Heeks said.

“All shareholders, new and existing, clearly understand the tasks and rewards ahead and we are delighted and appreciative of their strong support to begin the process of producing gold.

“The raising will allow the company to commence early site works in preparation for process plant construction, which will enable gold production to be reached in a shorter timeframe.”

The capital raising’s net proceeds will fund front end engineering design, civil construction, relocating the Kulumadau village, mine camp upgrades, project financing costs and other development and expansion working capital.

The share purchase plan will open to shareholders on November 4 and close on November 29.

The Woodlark project is on an island in Papua New Guinea’s Milne Bay province. It is surrounded by world-class mines, including Newcrest Mining’s Lihir and St Barbara’s Simberi, and shows promise for a low-cost, simple processing project.

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Geopacific stitches up Woodlark gold project in PNG

The colonisers eye up their pot of gold

Matt Birney | Company Advertorial | The West Australian | 26 June 2019

Geopacific Resources has acquired 100% direct ownership of the flagship Woodlark gold project in Papua New Guinea, buying out fellow Australian Kula Gold’s remaining share in a cash and scrip transaction worth about $3.29m.

Kula will immediately utilise the cash component to repay a loan totalling about $0.72m to Geopacific.

The deal seems like exquisite timing for the company, with the gold price nearly 25% higher than that assumed in November’s definitive feasibility study for Woodlark, which already outlined robust economic metrics and strong margins to develop the project.

Additionally, full ownership streamlines the corporate structure with significant administrative cost reductions and importantly reduces the risk to external financiers, willing to fund the project’s start-up.

Geopacific Managing Director Ron Heeks said: “Moving to 100% ownership of the 1.6Moz Woodlark gold project is a major milestone for the company. Full ownership simplifies project financing discussions and further enhances the company’s attractiveness and general market appeal … (with) additional benefits … (including) a substantial reduction in corporate costs.”

“The timing of the transaction coincides with the near completion of project finance due diligence and a strengthening gold price that is well above the DFS pricing assumption of AUD$1,650/oz. Progression in these work streams alongside the increasing gold price is a positive step in taking advantage of the increasing margin.”

The company is now racing down the final lap with baton in hand and is currently in the closing stages of an Independent Technical Experts, or “ITE”, review of the gold project, with representatives attending a site visit to Woodlark Island this week.

Back in January, the ITE review was commissioned by a consortium of banks and non-bank lenders, after an indicative non-binding term sheet was received.

Perth-based SRK Consulting was appointed as the lead ITE to review the technical aspects of the Woodlark project on behalf of the group of potential lenders.

SRK completed an initial Fatal Flaws Review late in 2018, with none being identified for the project.

With the gold price only strengthening since, the free cash flow position of the proposed initial 13-year mine life project has ballooned with Mr Heeks saying in January: “Every AUD$10 (per ounce) increase in the gold price is an additional ~AUD$10m in revenue which is considerable upside for the +1Moz project …”

November’s DFS study optimised the project at AUD$1,650 per ounce and produced a pre-tax free cash flow of $424m.

Geopacific recently received indicative costs to build the proposed gold processing plant on Woodlark Island from three international standard contractors.

The company said that an initial review of those costs showed that the pricing is in line with the DFS parameters completed last year by Lycopodium.

Total capital establishment costs for the Woodlark gold project come in at just under $200m, with a third of those monies required to construct the processing plant, which is very respectable considering the relatively isolated overseas location.

With respect to the near completion of the ITE review of Woodlark, Mr Heeks added: “The ITE review is progressing well and Geopacific is confident with the technical aspects of the DFS completed by industry-leaders Lycopodium, Mining Plus and MPR Geological.”

“The results from the initial ITE fatals flaws review (built) confidence in the Woodlark project in addition to the conservative approach undertaken in calculating the (mineral) resource. The resource estimate uses a fully diluted resource model with a significant dilution factor.”

“This provides additional comfort that mining at the estimated grade is achievable. The Woodlark deposit is a permitted project with robust economics that are improving with the current gold price ~AUD$350/oz higher than that used in DFS.”

Last month, the company appointed Ian Clyne as its new Chairman to actively drive financing arrangements for the gold project.

Mr Clyne has been part of the company’s board since 2016 and brings with him a wealth of corporate experience including most recently as Group CEO of Bank South Pacific Limited, based in PNG’s capital Port Moresby for five years.

It was a strategic move for Geopacific, with Mr Clyne being a strong advocate for PNG’s potential and its people and holding a high level of commitment to social and community issues within the mainly rural population of the developing country.

Commenting at the time, Mr Clyne said: “As the Chairman of Geopacific, my priority is to drive the Woodlark gold project towards a successful project finance outcome that will maximise shareholder and stakeholder value and returns.”

“Woodlark Island is one of the most prospective regions of PNG and we take great pride in our positive relationships with the local community, the National & Provincial Governments, and the regulatory authorities who have also demonstrated strong levels of support for the permitted … project.”

The Woodlark project holds an ore reserve of nearly 29 million tonnes grading 1.12g/t gold for 1.04 million ounces, contained within a broader JORC-compliant mineral resource estimated at 1.57 million gold ounces.

This gold resource is also likely to build over time as the project has extensive gold and copper exploration potential, in a region where Geopacific holds the dominant land position on the 912 square kilometre area of Woodlark Island.

Once in production, the company will likely be able to self-fund and potentially sustain its mining operations at the Woodlark gold project to beyond the initial 13-year mine life.

The project area is blessed with flat terrain and soft outcropping ores with average metallurgical gold recoveries exceeding 90% during the first five years of production.

All permitting is granted and the project enjoys strong community support in the proven mining investment hub of PNG.

With full ownership of the exciting project within its grasp, the gold price behaving itself and a new Chairman at the helm, Geopacific now has clear air ahead towards the construction, development and ultimately gold production at the impressive and undervalued Woodlark project.

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Geopacific to fully acquire PNG gold project

Matt Birney | The West Australian | 8 March 2019

ASX listed gold developer Geopacific Resources is set to scoop up the remaining 7% of its JV holding with Kula Gold Ltd it does not already control, giving it full ownership of the emerging Woodlark gold project in PNG.

The timing appears to be quite strategic, with the company’s November DFS for the project delivering strong economic and technical outcomes at a base case scenario using an AUD$1,650 per ounce gold price.

With gold trading 10% higher than that this week, those outcomes are looking rosier by the day.

Back in January, Geopacific’s Managing Director Ron Heeks set it out plainly saying: “… every AUD$10 increase in the gold price is an additional ~AUD$10m in revenue which is a considerable upside for the +1million ounce project optimised at ~AUD$150 less than the current market.”

In fact, a gold price of AUD$1,800 per ounce delivers over AUD$140m in additional free cash to the project over its initial project mine life.

Mr Heeks added this week: “Acquiring 100% direct interest in Woodlark is a positive step in the project’s development pathway. The simplified ownership structure enhances its attractiveness to potential financiers and positions it to take advantage of the growing AUD$ margin as projected revenues and most costs are to be in Australian dollars.”

“Ownership consolidation takes place as the gold price moves well above the DFS pricing assumption of AUD$1,650/oz.”

The company tabled an excellent set of numbers in last year’s Woodlark DFS, headlined by $257m in free cash the project generates in the first five years, or about $51m per year post-tax for the same period.

The study delineated an initial project mine life of 13 years, producing nearly 1 million ounces of gold and spitting out an average of $26m post-tax annually for the life of the mine.

The project produces a post-tax NPV of $197m and an IRR of 29% and post-tax capital payback is estimated to be just over two years.

The all-in sustaining cost for the first five years of production was just AUD$866 per gold ounce, producing high margins at a puny strip ratio of just over 3 to 1.

By comparison, many West Australian open pit gold miners wrestle with double or triple this strip ratio for their narrow shear-hosted deposits.

The project is blessed with flat terrain and soft outcropping ores with average metallurgical gold recoveries exceeding 90% for the first five years of production.

For the life of mine, the AISC was estimated at $1,033 per ounce, largely driving the strong economic outcomes from the DFS.

The sustained increase in the gold price since early October last year has put some icing on the cake for Geopacific and no doubt, was front and centre, in its decision to commence acquiring the Woodlark project outright.

The CAPEX costs for the Woodlark project are pretty tidy too, coming in around AUD$200m, which is a favourable result for any new gold mining operation, particularly one constructed offshore.

Geopacific recently produced an updated ore reserve totalling 28.9 million tonnes grading 1.12g/t gold for 1.04 million ounces, which underpins the project moving forward.

All permitting has been granted and the project enjoys strong community support in the proven mining investment hub of PNG.

The company holds the dominant tenement position on Woodlark Island and administers a very prospective regional exploration portfolio of ground surrounding the granted mining leases.

An island-wide regional geochemical soil sampling program completed over the last six months unearthed a plethora of exciting new gold and copper exploration targets and blue-sky possibilities for Geopacific to consider.

Once in production, the company will be able to self-fund and potentially sustain its mining operations at the Woodlark gold project beyond the initial 13-year mine life.

Acquisition of Kula Gold’s remaining 7% JV holding in Woodlark will come via a cash and scrip transaction that will cost Geopacific about AUD$3.25m

A price it seems willing to fork out to consolidate its interest in the project and simplify the ownership structure, which should also lead to significant corporate cost reductions and administrative overheads.

Simplifying the structure will be beneficial for the company too, as it can get on with the job of financing the project and undertake a full exploration tilt at the very prospective porphyry gold-copper land holdings it controls across Woodlark Island.

The clouds are parting for Geopacific in the PNG, giving greater clarity to its road ahead at the impressive Woodlark gold project.

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Geopacific now holding 93% of PNG goldfield

Matt Birney | The West Australian | 23 August 2018

ASX listed gold developer Geopacific Resources now holds a 51% direct interest in its flagship Woodlark gold project in PNG, after achieving the second tranche incentive milestone with its project JV partner Kula Gold Limited.

The company now holds a 93% economic interest in the project, courtesy of its 85% controlling interest in Kula Gold in addition to its direct interest in the project.

The project level earn-in agreement with Kula dates back to July 2016 and required the company to spend up to A$8m over a 2-year period and complete an estimation of an initial ore reserve exceeding 1.2 million gold ounces to achieve this second tranche.

With both of these hurdles now overcome, Geopacific will concentrate on meeting the requirements of the third and final tranche of the JV agreement with Kula, where it can earn a 95% economic interest in the project, effectively winding up the JV.

The remaining 5% interest will be taken up by the PNG Government, who has agreed to take this stake when the project is ready to be mined, by reimbursing a proportionate share of sunk costs.

Geopacific Managing Director Ron Heeks said: “Geopacific now directly owns 51% of Woodlark Mining Limited and will continue to increase ownership as we move forward with development of the project.”

“The DFS continues as does exploration to scope out the larger goldfield that holds such potential. Our debt advisors Ironstone Capital are also progressing well. The project is coming together as we hoped and continues to move towards a 2019 start to construction.”

The company has strongly focussed its attention on the Woodlark gold project over the last two years in order to stay on schedule for this intriguing opportunity.

Geopacific reported the outcome of its PFS for the Woodlark project in March, saying the results indicated a robust, low-cost, low stripping ratio, open pit operation that could deliver an average of 100,000 ounces of gold annually, over a 10-year initial mine life.

Since that time, the company has commenced an island-wide soil sampling program over its tenements in PNG and has hardly missed a beat, turning up multiple gold and copper targets pretty much everywhere it looks.

This is perhaps unsurprising, given the project’s location in the “ring of fire”, surrounded by multi-million ounce deposits at Lihir, Panguna, Simberi and Misima.

Geopacific has proved up a mineral resource of 1.57 million ounces, whilst developing new exploration targets nearby to potentially add to its arsenal over coming years.

The big picture envisaged by the company more than 2 years ago is finally coming together, with project development well underway, ongoing exploration success outside the main mining leases and consolidation of the project ownership on schedule.

Geopacific is well on track to become PNG’s next significant gold producer over the coming year or so.

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PNG miners to present in Sydney

Drilling at Edie Creek

RAPID-FIRE presentations by four companies with interests in Papua New Guinea will be delivered in Australia on Thursday at the inaugural ResourceStocks Sydney conference.

PNG Industry News | 14 May 2018

Kingston Resources is first up at 11.45am, followed by Geopacific Resources, Kalia and Niuminco Group. Each company has a 15-minute slot at the event, which is to be held at the SMC Conference and Function Centre over two days, May 16 and 17.

• Kingston Resources has the advanced exploration Misima gold project which has 2.8 million ounce resource which Kingston aims increase. Misima Island is 625km east of Port Moresby in the Solomon Sea and was operated as an open pit gold mine from 1989 to 2004, producing 3.7Moz gold at an average cost of $218/oz. Kingston owns 49% of Misima and is earning in to 70% and the joint venture partner PPC, is owned by JX Nippon Metals and Mining (66%), and Mitsui Mining and Smelting (34%).

• Geopacific Resources has the advanced exploration Woodlark Island gold project in Milne Bay Province. Geopacific recently released a prefeasibility study on the project which indicated that Woodlark has the potential to be a robust, low-cost, low-stripping ratio open pit operation that can deliver an average of 100,000 ounces of gold per annum over 10 years. Highlights of the study include: an initial head grade of 1.63 grams per tonne gold; an all-in sustaining cost of $A990 per ounce for the first five years and $A1110/oz over the life of mine; capital cost of $A180 million; and a reserve of 34.7 million tonnes at 0.99gpt gold containing more than 1.1 million ounces.

• Kalia describes itself as an exploration company targeting energy metals across a range of mineralisation styles – and one of the company’s areas of interest is Bougainville Island. Kalia says that from the preliminary work completed, including the re-processing of the data collected in 1986 by Fathom Geophysics and the analysis of raw data from other studies, sufficient sites have been identified to begin exploration. 

• Niuminco Group has the brownfields Edie Creek gold project in Morobe Province 120km south of Lae. The mining leases cover nearly four square kilometres and lie in a valley between high slopes. Since becoming involved in the Edie Creek project, Niuminco has upgraded existing buildings and power supplies and constructed service roads in the lease area. Edie Creek ore is currently being processed at an average 15.0 tonnes per day – an increase from the previous 12 month averages of 6.4tpd. With new infrastructure purchased, it is anticipated Edie Creek will scale up to run at more than 40tpd – a three-times increase over recent production rates (13 to 15tpd).

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Geopacific Resources raises $10m for Woodlark gold exploration

Woodlark Island

Ewen Hosie | Australian Mining | May 2, 2018

Gold explorer Geopacific Resources has raised $10 million in exploration funding for its Woodlark gold project in Milne Bay, Papua New Guinea.

The funds were raised in a placement of 280 million shares at $0.036 cents each, a 5.3 per cent discount on the company’s closing price before making the announcement.

Geopacific hopes to establish a drill program to define the project’s wider potential beyond near-pit reserve drilling. The company is targeting an aspirational resource of 5 million ounces (Moz) of gold, a significant expansion on the current resource figure of 1.57Moz.

“Any new discoveries have the potential to ultimately improve the forecast gold production profile in excess of the current 100,000oz per annum and extend the mine life,” said Geopacific managing  director Ron Heeks.

“Having established Woodlark as a robust gold development project it’s encouraging to see strong financial support for our strategy to finalise the definitive feasibility study (DFS) and bring a significant exploration program online to continue to grow the project,” he added.

More than half of the $10 million will go towards resource development and drilling at $5.6 million overall; $900,000 is budgeted for completion of Woodlark’s DFS, $1.1 million for exploration costs at company projects in Cambodia and Fiji, and the remaining $2.4 million will be for working capital, offer and other project costs.

In addition to Woodlark, Geopacific’s projects include the Kou Sa copper-gold project in Cambodia and five gold projects in various stages of exploration in Fiji, being the island nation’s largest licence holder. These include the Nabila, Sabeto, Vuda, Rakiraki and Cakaudrove projects.

In March, completion of a pre-feasibility study (PFS) on Woodlark allowed Geopacific to increase its interest in the project to 93 per cent under agreement terms with joint venture partner Kula Gold.

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Geopacific kicks off Woodlark DFS in PNG

Geopacific Managing Director Ron Heeks (left) on site in PNG

Matt Birney | The West Australian | 10 April 2018

Aspiring gold producer Geopacific Resources has kicked off its Definitive Feasibility Study for the Woodlark Island project in PNG and all things being equal, should have the completed document on the street by the third quarter of this year.

The DFS follows on from the company’s encouraging Pre-feasibility Study results, which were announced in March, after an extensive work program throughout 2017.

The PFS supports the development of a conventional open pit operation delivering an average output of 100,000 ounces of gold annually for at least 10 years, with an all-in sustaining cost to produce of A$1100 per ounce.

Exhibiting very simple metallurgy, a high gravity gold content, low striping ratios, lowish CAPEX and a post-tax payback of just over 2 years, the Woodlark project appears to be quite robust on paper

According to the company, the epithermal gold mineralisation at the project is amenable to bulk-style, low-grade mining, with large volume, shallow, open pits.

The breadth and rigour of the PFS document, particularly in relation to the estimation of mining costs and metallurgy, which were both done to DFS standards, has shortened the estimated completion time for the DFS.

The aim of the DFS is to finalise and optimise plant design and infrastructure, delivering capital costs to within a 15% level of accuracy.

Importantly, the project sits on a granted mining lease and is already fully permitted, which means that things could move quickly for Geopacific after the DFS is churned out.

Woodlark also has solid regional exploration potential to grow beyond the global mineral resource of 1.58 million ounces, providing an element of blue sky for the 100,000 ounce a year project.

A number of key, near-mine brownfields areas have the potential to materially add to the mine plan at Woodlark, opening up further options for the operation, once in production.

Managing Director Ron Heeks said; “The PFS showed that Woodlark is a robust project that can surpass the critical production level of 100,000oz gold per annum. We see clear potential for upside from the Woodlark PFS estimates as well as significant exploration potential within close proximity to the current 1.1million ounce Reserve.

“Woodlark’s PFS outcomes see the project compare favourably to competing gold development projects on key metrics including the low forecast strip ratio and short post-tax capital payback.”

Heeks continues to put his family money where his mouth is too having recently waded into the market to pick up another 746,000 Geopacific shares in his wife and daughter’s name.

The company now holds a 92.75% interest in Woodlark via both its shareholding in Kula Gold, the project originator and its direct interest in the project, courtesy of a farm in agreement with Kula.

Geopacific is in good company in Papua New Guinea, surrounded by multi-million ounce gold deposits located on the country’s mainland and surrounding archipelago.

If the stars align for the company as expected, construction of the Woodlark project could commence in 2019, with first gold out by the middle of 2020.

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Delay in Woodlark mine causing anxiety: MP

Cedric Patjole | Loop PNG | February 9, 2018

The delay in the Woodlark Island Gold Project is causing a lot of anxiety and undesired expectation from landowners.

Samarai-Murua MP, Isi Leonard, said this in Parliament when asking Mining Minister Johnson Tuke on the status of the Woodlark Island Gold Project.

Leonard said the project has been on development status for well over a decade following numerous delays and a changing of ownership twice.

“The people of Woodlark and Samarai-Murua regard the project as a major catalyst for development. But the delay in its development is causing much anxiety and undesired expectation,” he said.

The member asked Minister Tuke the status of the project, whether the low commodity process hindered project development financing and if the government could step in.

Leonard asked about a previous agreement for a joint venture partnership to develop gold projects on Woodlark and Misima islands.

He also said if the current explorer is moving ahead, can a previous project agreement signed be approved by the Government.

“Geo-pacific Resources is moving the project forward, can the MOA agreed to by stakeholders in December 2015 be approved by the NEC. This will give more confidence to the landowners and the developers of the project,” he said.

Meanwhile, Minister Tuke asked the MP to send his office his series of questions which he will respond in detail as he did not have the information with him.

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