Geopacific Resources (ASX:GPR) has completed a Scoping Study confirming the Woodlark Gold Project in Papua New Guinea will generate “strong” operating margins and free cash flow over a 12-year mine life.
The study validates that mining and processing the Kulumadau, Busia, and Woodlark King gold deposits will produce 1.14 million ounces of gold over the mine life. It will be produced through low-strip open-pit mining of more than 97% of the measured and indicated mineral resources.
Geopacific, which has a market capitalisation of $19.15 million, says the mine will have an average annual gold production of 95,000 ounces delivered through conventional carbon-in-leach processing at a 90.1% gold recovery.
Based on a $2,900 per ounce gold price, the Woodlark Project’s pre-tax net present value totals $625 million and a pre-tax internal rate of return of 40.5%, with an 18-month payback period from the first production.
Woodlark’s undiscounted life of mine revenue totals $3.3 billion, with a pre-tax net cash flow of $1.3 billion.
The study also reveals the total pre-production capital totals $326 million for the mine development, gold plant, and infrastructure costs, as well as first fills and critical sparse.
CEO James Fox says the study builds on the recent mineral resource and infrastructure improvements, and improves the company’s confidence that Woodlark is capable of generating “strong” financial returns over a long life.
“These findings are underpinned by extensive technical and financial information, and are based on conservative estimates, including the assumed gold price of $2,900 per ounce,” Fox says.
“Additionally, Woodlark offers substantial upside exposure to the gold price and ongoing resource inventory growth.
“We look forward to further advancing the project with technical and environmental studies to support infrastructure and project throughput optimisation and de-risking initiatives, and drill planning to progress high-priority exploration targets with potential to augment the project underway.”
Geopacific has reviewed potential development options through the Scoping Study, confirming robust project economics, a high-level of technical confidence, and key approvals in place with a near-term development timeline.
The company notes all leases are wholly owned by Geopacific and all statutory reporting is up to date. As a result, the project is well advanced from a permitting perspective, with all key permits in place.
The Woodlark Project lies on Woodlark Island and hosts a resource of 45.56 million tonnes at 1.07 grams per tonne gold for 1.56 million ounces.
Write to Aaliyah Rogan at Mining.com.au
Images: Geopacific Resources
