Following a revised scoping study earlier this month, Geopacific has delivered some more good news, with an increase in resources to 48.3 million tonnes grading 1.07 grams per tonne gold for 1.67 million ounces.

Encouragingly, with the addition of 103,000oz comes with the news that almost 88% of the resource is now classed as measured and indicated.

The growth comes with the addition of 37,000oz at 1.53gpt at Great Northern and 66,000 at 1.04gpt at Wayai Creek.

The new resources are based on a 0.4gpt cut-off and A$2400/oz pit shell.

Both proposed satellite pits are only inferred resources and are based on a revised interpretation of drilling results completed more than two years ago.

The deposits could be quickly upgraded as the wider project moves back into development.

Substantial resource growth sought

Extensional drilling is being progressed, with CEO James Fox looking to see substantial resource growth, including at the 1km-long Little MacKenzie prospect. 

Little MacKenzie’s database falls just short of the level required to support a resource estimate.

All are within the granted mining lease that hosts the Kulumadau, Busai, Woodlark King, and Munasi deposits.

The updated scoping study was completed based on the earlier resource estimate of 1.56Moz at 1.07gpt and outlined a project with a 12-year mine life, post-tax net present value of $501 million and post-tax internal rate of return of 37.7% based on a conservative $2900/oz gold price and all-in sustaining costs of $1534/oz.

The study suggested capital costs of $236 million could be repaid over 18 months, with $1.3 billion in pre-tax free cash generated from production of 1.14Moz or sales of around 95,000ozpa.

Woodlark is already essentially permitted, and work since the prospect was paused has focused on reducing the execution risk, including for the proposed plant site, which has been relocated after issues with the former location became apparent during the aborted development.

Likewise, the overall footprint has been streamlined, moving the wharf into the same infrastructure corridor as the tailings line.

The plant has been redesigned at a slightly higher 2.9Mtpa capacity.

Cash coming

Geopacific has around $1.9 million cash, having received the first tranche of a $5 million placement at 2.1c from strategic investor Jingtao Chi for a 19.99% interest in the company.

Deutsche Balaton is maintaining its 37.2% stake by converting $3 million debt into equity.

The balance is pending regulatory approval. 

In late 2019, Geopacific’s then-$255 million Woodlark gold project was fully funded. Construction had started on the 100,000ozpa operation when the wheels came off.