The fresh support comes from Lingbao Gold International Company, a wholly owned subsidiary of Hong Kong listed Lingbao Gold Group, which has producing gold operations in China, Mongolia and Kyrgyzstan.
Just last month Geopacific (ASX:GPR) released its Woodlark Scoping Study, which forecast robust operating margins and significant free cash flow over 12 years with a rapid payback.
This was backed up a couple of weeks ago with GPR’s announcement of an increase in the project’s resource to 1.67 million ounces of gold thanks to compilation and interpretation of historic drilling at two satellite gold deposits.
Drill planning is now underway to test for further extensions at both those satellite deposits, Great Northern and Wayai Creek, along with Little MacKenzie, which all have significant potential for further resource growth.
The newly secured funds will be put to use to advance and derisk the 100% owned PNG Project, including preparation for drilling at identified high-priority target areas and general working capital.
Adding to Woodlark’s near-term production appeal, key licences are already in place and plant engineering is more than 90% done.
As well as the support of Lingbao, a subsidiary of Hong Kong listed Lingbao Gold Group, GPR also has commitments from 2Invest AG and Deutsche Balaton AG, members of existing substantial shareholder, the Deutsche Balaton Group.
The German group will apply funds owing under certain bearer bonds, including outstanding fees and interest, totalling approximately $2.8 million, to subscribe for shares in GPR at the same 2.1 cents per share price as the placement.
Geopacific CEO James Fox said: “Lingbao is a major gold producer with mining interests in several countries. To secure their support as a new substantial shareholder, in parallel with the debt-to-equity agreement with a bond-holder and existing substantial shareholder, is a strong endorsement of the underlying value of the Woodlark Gold Project.
“Having recently identified numerous highly prospective gold targets with scope for further resource inventory growth, we believe there is a clear pathway for significant shareholder value creation that continues to be recognised.
“We look forward to completing a site visit with Lingbao over the coming weeks.”
Lingbao Overseas Business Division General Manager Peng Sun said: “Geopacific’s Woodlark Gold Project is a promising investment for Lingbao and a key step in our international strategic plan. We hope to strengthen our partnership with the Geopacific team and collaborate to promote the smooth progress of the project by participating in this private placement”.
Woodlark is on 529km2 of the highly prospective Woodlark Island, where the company is the only explorer or miner.
The mineralisation at Woodlark is commonly associated with large-scale porphyry copper-gold deposits, a style of geology known to host some of the world’s largest reservoirs of the yellow metal.
