PERTH (miningweekly.com) – ASX-listed Geopacific Resources will consolidate its holding in the Woodlark gold project, in Papua New Guinea, after receiving approval to acquire partner Kula Gold’s stake in the project.

Geopacific in March this year announced plans to gain full ownership of Woodlark by issuing Kula 150-million of its own shares, and paying an estimated A$700 000 in cash to Kula, while also cancelling its entire existing 85% interest in the company.

Kula will cease to be a subsidiary of Geopacific and will pursue new opportunities, with the company using the cash payment to repay a A$740 000 loan from Geopacific.

Both sets of shareholders have now voted in favour of the transaction, clearing the way for Geopacific to gain full ownership of Woodlark.

“Moving to 100% ownership of the 1.6-million ounce Woodlark project is a major milestone for the company,” said Geopacific MD Ron Heeks.

“Full ownership simplifies project financing discussions and further enhances the company’s attractiveness and general market appeal. Additional benefits of the simplified cost structure also includes a substantial reduction in corporate costs.”

Heeks said that the timing of the transaction coincided with the near completion of the project finance due diligence, and also a strengthening gold price that was well above the pricing assumptions in the definitive feasibility study.

“Progression in these work streams alongside the increasing gold price is a positive step in taking advantage of the increasing margin,” he added.

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-yearmine 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 some A$343-million over the life of the mine.