Aspiring gold producer Geopacific Resources is on the verge of putting its own stamp on the Woodlark Island Gold Project in PNG after a previous operator spent $150m on it.
Since picking up nearly 90% of the project for around $10m in cash and script, Geopacific has sunk 30,000 metres of drilling into it, not content to rely on the 290,000 metres drilled by the previous operator without verification.
This week management laid out a detailed plan specifying timelines for achieving major milestones in 2018 at Woodlark with shareholders now expecting a flood of material news over the next few months.
Geopacific is confident the development program completed during 2017 has added significant value to the project and that it will ultimately be enough to catapult the company into producer status.
That work program included targeted infill and extensional drilling designed to increase confidence in mineral resource estimates and increase tonnages and ounces.
The Company is targeting an updated ore reserve estimation of 1 million ounces plus when it releases its new estimation in March this year.
An ore reserve of this nature could be enough to provide sufficient inventory for a 10 year plus initial mine life at Woodlark, based on a proposed production rate of 1.8 Mtpa.
The current mineral resource estimate for the Project is 45.1 Mt @ 1.5 g/t Au for 2.12 Moz.
The re-estimation of mineral resources and ore reserves during the first Quarter of 2018 will dovetail into a Definitive Feasibility Study for the Project scheduled for release during the third quarter of 2018.
Geopacific Managing director Ron Heeks said: “Geopacific is well-positioned to deliver value in 2018 and on track to announce milestones which demonstrate the work we’ve completed. Robust resources and reserves form the cornerstones of any successful project. To deliver a result that we can hang our hats on, we made the decision to focus our efforts on these aspects rather than rushing the timeline in 2017. With that running smoothly, we now have the opportunity to bring the considerable value of the exploration upside into the picture.”
The Woodlark Gold Project is located on Woodlark Island in the Milne Bay Province of PNG and has a long history of artisanal gold mining and underground gold production stretching back to 1895.
Gold mineralisation is hosted within a low sulphidation epithermal system, underlain by a deeper porphyritic intrusion. Consequently, the gold is free-milling with recoveries generally close to 90%.
Mineralisation is dominantly of two styles; disseminated lower grade gold mineralisation within a broad envelope of breccias and stockwork zones that contain narrower, high grade, nuggetty quartz veined lodes associated with a strongly developed alteration overprint. The clayey nature of the host rocks could allow for extensive free digging and lower mining costs at the open cut operation.
The current Project consists of three deposits, Kulumadau, Busai and Woodlark King, which are all located within a 5 km hauling distance of the proposed plant area in centre of Woodlark Island. The mining lease covers an area of 60 km2 and was granted in July 2014 with a further 580 km2 tied up in exploration licences that envelope the mining lease.
Importantly the project already has its key environmental, social and mining permits.
Historical exploration at Woodlark confirms the vast potential of the geological terrain surrounding the proposed mine hub.
Company geologists are now evaluating the potential of this terrain by using available data to prioritise future targets for ore feed.
Geopacific now owns 86% of the Woodlark Gold Project, after consolidating its holdings during 2017.
The economics of Woodlark look promising for Geopacific as the company now awaits an updated mineral resource estimate and new ore reserve, which will steer the final engineering design and costings for completion of the DFS and then its on to production.
By Matt Birney
