Woodlark Island Gold Project
GPR recently announced they had entered into a project-level, earn-in agreement to acquire up to a 75% interest in the Woodlark Island Gold Project (Woodlark) in Papua New Guinea. Woodlark has a reserve and resource of 776koz and 2.1Moz of gold respectively, and a DFS completed in 2012 highlighted the potential for a 1.8Mtpa facility to produce more than 100koz gold over an initial 9 year mine life.
Kou Sa Cu-Au Project
The Kou Sa project is an advanced exploration asset in Cambodia. Drilling at the project has encountered a number of high grade copper/gold intercepts (inc. 17m @ 12.38% Cu eq. from 19m; 41m at 1.69% Cu eq from 55m). The company recently announced a maiden resource at Kou Sa of 51,000t Cu eq, with an additional resource upgrade expected in the future.
GPR has one of the largest portfolios of gold/copper exploration assets in Fiji. Drilling is due to commence on the Faddy's Prospect during 2016. GPR has identified a potential opportunity for a toll milling agreement at the Faddy's Prospect in the future.
The Woodlark Island Gold Project appears to be an excellent opportunity for GPR, as it is one of the few open pittable, multi-million ounce gold deposits in the Asia/Pacific region that has not been developed.
We see exploration upside to grow both the reserve and resource further, more importantly we believe a reduction in the initial capital cost estimate (US$160m) is likely, given the original estimate was at the peak of the resources boom (2012). Investors however should be aware there is a risk that the transaction may not proceed as GPR is still in a due diligence period.
We believe there remains good exploration potential at the Kou Sa copper/gold project, although the maiden resource was smaller and at a lower grade than we anticipated. However, with further resource upgrades likely in the near future, Kou Sa could still become Cambodia's first mining operation, however further work and time will be required.
As there is a risk that the Woodlark transaction may not proceed given GPR is still in the due diligence period, we have not valued GPR at this time. We will review this pending the completion of the transaction.
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This information is general information only. Any advice is general advice only. Neither your personal objectives, financial situation or needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice. Adam Kiley (AR No. 458224) is an authorised representative of Intelligent Financial Markets Pty Ltd (AFSL No. 426359).
About Geopacific Resources Ltd
Geopacific Resources Ltd (ASX:GPR) has been listed on the Australian Stock Exchange (ASX) since 2006. The Company's initial activities were on its tenement holdings in Fiji where its exploration activities have identified several highly prospective project areas.
When Geopacific merged with World Wide Mining in 2013 the Company became a regional explorer with an Asia-Pacific-focus – adding the Kou Sa Project in Cambodia to its existing Fijian Projects. Economic conditions then led the Company to adopt a single-project strategy, focussed on Kou Sa. The experience of Geopacific's Board and Senior Management Team equips the Company with the capability and capacity to run projects concurrently – exploration at the Fijian Projects will therefore recommence while work at Kou Sa continues.
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