PERTH (miningweekly.com) – ASX-listed junior Geopacific Resources has elected to spend a further A$8-million at the Woodlark Island gold project, in Papua New Guinea, following the completion of a due diligence study and the preparation of an initial work programme.
Geopacific is earning an 80% interest in the Woodlark project, which fellow listed Kula Gold owns, through a staged investment.
Tranche 1 of the investment has seen Geopacific earn a 5% share in the Woodlark project by spending A$650 000 to develop a project plan, while tranche 2 will require the company to spend A$8-million over a 24-month period to acquire a 40% shareholding.
Should Geopacific choose to continue its investment in the project, the company could earn a 60% interest in Woodlark by spending a further A$10-million over a 24-month period, during the third tranche.
The company could take its shareholding to 75% or 80% by either completing a definitive feasibility study (DFS) or raising financing for the project.
Geopacific is hoping to deliver a 1.2-million ounce gold reserve during its second round of investment, which the company said was expected to be a relatively simple task, and would be achieved through a development plan combining a selective development drillout, and rebasing capital and operating costs and improving pit designs.
A 2012 DFS estimated that the Woodlark project, which contains a resource of 45.1-million tonnes, grading 1.5 g/t gold for 2.12-million ounces, could support a 1.8-million-tonne-a-year gravity and carbon-in-leach plant, to produce some 100 000 oz/y. Geopacific is hoping to increase this to 150 000 oz/y, over a mine life of ten years.
Kula chairperson David Frecker has welcomed Geopacific’s decision to invest in the Woodlark project, pointing out that Kula would be free carried for the next A$8-million of expenditure.