Special Report: Geopacific Resources is emerging with renewed vigour under the leadership of its new CEO, James Fox, and a revamped Board boasting extensive project development and corporate experience.
Geopacific Resources’ (ASX:GPR) flagship 1.6-million-ounce gold project in Papua New Guinea stands as a testament to its potential, armed with key permits and a dual strategy aimed at unlocking both exploration and project development value.
Senior resources executive James Fox was brought in only recently to help Geopacific capitalise on the huge opportunity at Woodlark and he has wasted no time in identifying the key areas to address.
The strategy of Geopacific’s new leadership team is clear – leverage the robust 1.6Moz resource while exploring the untapped potential, positioning itself as a compelling investment opportunity.
There is north of $250m in value still to be realised at the Woodlark project.
“The 1.56Moz Woodlark project holds significant potential with a number of technical development components optimised, de-risked and advanced over the past 12 months,” Fox explained.
“Woodlark is a technically de-risked development project with numerous opportunities for further resource expansion outside of the current pit-designs, to extend and further optimise the future production profile and financial metrics, allowing it to become a world class asset with premium returns for all our stakeholders.”
The Woodlark project spans 529 sq.km of the highly prospective Woodlark Island, and Geopacific is the only explorer/miner in the region, making it a dominant force.
Over 90% of the existing resource is in the higher confidence measured and indicated categories.
The exploration strategy is twofold – targeted exploration to materially increase resources and augment ongoing project development.
The style of gold mineralisation at Woodlark is commonly associated with large scale porphyry copper-gold deposits.
Porphyry deposits provide 60-70% of global copper supply and range from 100 million to several billion tonnes, ranking them among the largest ore deposits on earth.
Geopacific has identified numerous high-ranking untested gold and porphyry copper-gold targets near to existing resources that it can tap into, with the project remaining open down plunge and along strike.
Increasing confidence and grade in near-surface distribution provides Geopacific with optionality during mine planning.
With key licenses in place and plant engineering at 90%, the groundwork is laid to advance development of the project.
Over the next six months, Geopacific aims to accelerate on-ground exploration, preparing for drill-testing and advancing project development through pit optimisation, scheduling, and updated financial modelling.
Unlocking value: A compelling investment opportunity
While Geopacific’s market value currently stands at just $13.1m, trading at less than $10 per ounce of measured and indicated resource, the significant upside potential becomes evident when compared to the peer average of $40/oz.
Geopacific’s enterprise value of $11.8m is well below its fellow explorers, which generally average around $84/oz.
Even factoring in a discount for PNG risk (WA companies tend to trade at a >2x multiple of their non-WA peers) this would still equate to over $40/oz, which would value Geopacific at $60m or higher.
Woodlark Island, situated in a pro-mining jurisdiction with a long and successful mining history, enjoys the support of the PNG government.
PNG hosts a significant regional gold endowment and is home to several world-class mines.
Recent investments in the region include Tolu Minerals’ (ASX:TOK) recent $17m IPO to restart the 2Moz Tolukuma gold mine, a $40m cash injection from Sir Mick Davies’ private equity fund, Vision Blue Resources, in Mayur Resources’ (ASX:MRL) Central lime project, and heavyweight Barrick Gold’s planned restart of the 26Moz Porgera mine.
The stable fiscal environment, coupled with a low 2.5% royalty levy and Australia as a major trade partner within a two-hour flight, positions Geopacific for sustainable growth.
This article was developed in collaboration with Geopacific Resources, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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