PERTH (miningweekly.com) – Gold developer Geopacific Resources has completed a A$40-million capital raise, with a further A$5-million raising in its sights, to fund development activities at its Woodlark gold project, in Papua New Guinea.

The company has completed a A$40-million share placement to sophisticated and professional investors, placing 1.6-billion new shares at a price of 2.5c each. The offer price represented a 10.7% discount to Geopacific’s last closing price.

The placement consists of two tranches, with the first raising A$17.2-million, while the second will raise A$22.8-million, subject to shareholder approval.

In addition to the share placement, Geopacific will also undertake a share purchase plan (SPP), priced at 2.5c a share, to raise an additional A$5-million.

The SPP will allow shareholders to subscribe for up to A$30 000 worth of new shares in the company.

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

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

Geopacific is now funded to start the first phase of development at Woodlark and move towards a complete project financing solution. The funds raised will be used for front-end engineering design, project civil construction, mine camp upgrades, project financing costs and other working capital.

A 2018 definitive feasibility study into the Woodlark project estimated that the project would require a capital investment of A$198.5-million, with the mine expected to produce 967 117 oz of gold over a 13-year mine life.

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 about A$343-million over the life of the mine.

Meanwhile, Geopacific on Monday also announced plans for a 25-for-1 share consolidation, following the SPP, subject to shareholder approval.