PERTH (miningweekly.com) – Embattled Geopacific Resources resumed share trading on the ASX after completing a range of corporate initiatives aimed at cutting costs.
The company earlier this year warned of material increases to the capital cost of its Woodlark gold project, in Papua New Guinea, and subsequently suspended the development of the project.
Geopacific also undertook a round of redundancies across the organisation.
The ASX-listed company on Tuesday told shareholders that the company had now closed out material commercial commitments following the suspension of project development, and had initiated a strategic review to assess alternative options to maximise shareholder value, including potential corporate and asset-level transactions.
In the meantime, Geopacific is advancing a number of concurrent work programmes to progress the project and optimise its future development pathways, including a drill campaign to grow the existing resource and reserve, and an assessment of the implications of the potential mineral resource growth on the design economics of a future project development.
“Having implemented an intensive business transformation programme following suspension of the Woodlark gold project development, we are pleased to recommence ASX trading with a renewed focus and pathway to realise value from this significant project,” said Geopacific chairperson Andrew Bantock.
“With the successful close-out of previous material project commitments, we are now well positioned to grow our 1.6-million ounces of gold mineral resources with A$28-million of cash, no debt, and A$17-million of project long lead equipment assets.
“Our ongoing drilling campaign is delivering encouraging results and step-out holes identifying new mineralised structures. With further drilling success, we see the opportunity to drive increased project value by undertaking studies to re-assess the project design and seeking to capitalise on targeted economies of scale.
“Strategic investors have recognised the opportunity at Woodlark and we have received unsolicited interest in the project from several credible parties. The board has therefore commenced a strategic review process, assisted by Azure Capital and Lisle Group, to assess the best path to maximise shareholder value from the Woodlark project.”
The Woodlark project is expected to produce 980 000 oz over its 13-year mine life, and is expected to have a net present value of A$347-million and an internal rate of return of 34%.