PERTH (miningweekly.com) – The definitive feasibility study (DFS) into the Woodlark gold project, in Papua New Guinea, has increased the estimated capital cost from the A$180-million considered in the March prefeasibility study, to A$198.5-million.

Project developer Geopacific Resources on Wednesday told shareholders that the DFS confirmed that 967 117 oz of gold would be delivered from Woodlark over the 13-year mine life, with 522 034 oz to be produced in the first five years of operation.

“The Woodlark DFS has demonstrated a high margin, long life operation with an enviable exploration upside,” said Geopacific MD Ron Heeks.

“Payback is fast, cash generation is high and exploration has the potential to provide significant organic growth,” he added.

The DFS estimated a pay-back period of just over two years, while all-in sustaining costs have been estimated at A$866/oz over the first five years, and at A$1 033/oz over the life of the mine.

The Woodlark project is estimated to have a post-tax net present value of A$197-million and an internal rate of return of 29%, with post-tax free cash flow expected to be some A$343-million over the life of the mine.

“Woodlark is located in a proven mining investment jurisdiction and surrounded by numerous world-class gold mines, including very similar, profitable gold operations on nearby islands,” said Heeks.

“The majority of these adjoining operations started life with similar mine life profiles and rapidly expanded once mining commenced. Regional exploration to date clearly demonstrates that Woodlark should follow a similar path with every further ounce identified creating an even better project.”

Geopacific has appointed a financial adviser to assist in arranging project finance, with discussions under way with a number of banks and financial institutions.

Heeks said that at the completion of the project financing process, the Geopacific board would meet to consider the project development.