Geopacific Resources will proceed to tranche two of the earn-in agreement with Kula Gold to acquire up to 80% of the Woodlark Gold Project on Woodlark Island in Milne Bay Province of Papua New Guinea. The company’s extensive review and due diligence undertaken during tranche one has highlighted the project’s potential.
Geopacific’s focus is to maximise the project’s development potential in the shortest possible timeframe after which it will look to further exploration potential. The current Woodlark resource is 45.1 million tonnes @ 1.50 grams/tonne gold for 2.12 million ounces, including 26.7 million tonnes for 1.32 million measured and indicated ounces.
The election by the Board of Directors to proceed to tranche two has been made three months ahead of schedule.
The ASX-listed company’s next target is to deliver a 1.2 million ounce gold reserve by spending a maximum of A$8 million, which will see it earn 51% of the project. Geopacific believes this will be a relatively simple task which will be achieved through a development plan comprising a selected development drill-out, re-basing CAPEX and OPEX costs and improving pit designs.
It will undertake limited infill drilling to convert a portion of the 800,000 inferred ounces into the measured and indicated categories at the Busai and Kulumadau deposits. This will focus on infilling wider spaced drilling and extend the known mineralisation to depth and along strike in both areas.
The company is preparing to mobilise three drill rigs to the site and aims to commence the development drill-out program next month. The program will commence with a diamond rig and an RC rig with the third rig to be added in January.
By re-basing costs and improving pit designs Geopacific aims to convert a high proportion of the measured and indicated resources into reserves, reduce build costs and shorten the construction period. The economic studies to re-base the costs are under way.
A recent placement raised $15 million, ensuring that Geopacific is funded to deliver the development plan.
Geopacific managing director Ron Heeks said, “It’s great to be involved in an advanced project that holds the kind of multi-million ounce potential that Woodlark does. The massive upside of the project became more evident on my recent trip to the island.
“Everything about the trip was positive and we’ve have nothing but support from government and community members who we have dealt with in PNG and on Woodlark.
“We look forward to commencing development drilling and delivering Woodlark along the development path into production.”
The feature article in the quarter four edition of The ASIA Miner is about Geopacific Resources and its suite of projects in PNMG, Cambodia and Fiji – read online at www.asiaminer.com