Geopacific secures investment from Chinese gold miner
ASX-listed Geopacific Resources on Monday announced a A$2.9-million investment from a new investor, Hong Kong-listed Lingbao Gold, to advance its Woodlark mining project, in Papua New Guinea. Lingbao committed to a A$2.1-a-share placement, securing Geopacific A$2.9-million.
At the same time, Geopacific has commitments from 2Invest AG and Deutsche Balaton, members of existing substantial shareholder, the Deutsche Balaton Group, to apply monies owing under certain bearer bonds to subscribe for shares in the company at the same price as the placement.
“Lingbao is a major gold producer with mining interests in several countries. To secure their support as a new substantial shareholder, in parallel with the debt-to-equity agreement with a bond-holder and existing substantial shareholder, is a strong endorsement of the underlying value of the Woodlark gold project,” said Geopacific CEO James Fox.
Lingbao overseas business division general manager, Peng Sun, stated that Woodlark was a “promising investment” for the group.
A July study for the 1.56-million-ounce Woodlark project indicates strong financial returns, including significant free cash flow and rapid payback over an estimated 12-year life-of-mine (LoM).
The project economics indicate a pretax net present value, at an 8% discount rate, of A$625-million (post-tax A$501-million) at a gold price of A$2 900/oz. The pretax internal rate of return stands at 40.5% (post-tax 37.7%), with an estimated 18-month payback period from the first production.
The LoM revenue is projected at A$3.3-billion, with a pretax net cash flow of A$1.3-billion. The LoM all-in sustaining cost is A$1 534/oz gold, while the all-in cost is A$1 820/oz gold.
Total preproduction capital is estimated at A$326-million.
The project’s physicals indicate total gold production of 1.14-million ounces over a 12-year mine life from low-strip openpit mining of more than 97% measured and indicated mineral resources. Average gold production is expected to be about 95 000 oz/y, delivered by conventional carbon-in-leach processing with an average 90.1% gold recovery.
Source: https://www.miningweekly.com/