Special Report: Geopacific Resources has raised $8 million in a placement to unlock value and grow resources at the 1.56Moz Woodlark gold project.
New investor Jingtao Chi has cornerstoned the two-tranche deal alongside existing Geopacific Resources (ASX:GPR) shareholder Deutsche Balaton.
The funding will be used to update the feasibility study, due for release in mid-CY2024, following recent exploration highlighting high-priority target areas with strong potential to bolster the existing resource.
The company also plans to pay down $3 million of existing bonds.
Woodlark poised to take off
The Woodlark project covers 529sqkm of highly prospective Woodlark Island, where Geopacific is the only explorer/miner.
The style of gold mineralisation at Woodlark is usually associated with large scale porphyry copper-gold deposits.
With key licences already in place and plant engineering more than 90% complete, Geopacific has also been capturing new data, and digitising historic data, to support the key elements of a targeted exploration process.
Numerous near-surface intercepts from Great Northern that support a potentially higher resource grade include 20m at 4.39 grams per tonne (g/t) of gold from 40m and 18m at 4.40g/t gold from only 22m.
Highlights from Wayai Creek include 5 m at a whopping 16.69g/t gold from 14m and 8m at 2.63g/t gold from 16m.
GPR has also uncovered a large, mineralised surface spanning up to 1km at Little MacKenzie, strategically positioned along the Woodlark King Mining area’s strike.
‘A strong endorsement’
German private equity investment firm Deutsche Balaton is participating in the $8m placement to maintain its 37.2% holding in GPR while Chi will hold a 19.99% stake in Geopacific after completion of Tranche 2.
Chi is the chairman of XXRT Power Investment Company which provides, among other things, engineering solutions to the rapidly growing EV industry in China.
With Chi’s support and network GPR aims to develop strategic partnerships with the aim of becoming the next major PNG gold miner.
“The support from a new strategic investor and existing major shareholder is a strong endorsement of the underlying value of the Woodlark gold project, and a testament to recent work completed to de-risk and advance its development,” Geopacific CEO James Fox says.
“Having recently identified numerous highly prospective gold targets, with key project approvals already in place, and scope for resource inventory growth, we believe there is a clear pathway for significant shareholder value creation.
“We will advance these prospects, and work towards delivering an updated feasibility mid-year to reflect the project de-risking outcomes, increased resource inventory, and the strong gold price environment.”
How the placement works
Tranche 1 comprises 90.3 million shares to raise approximately $1.9 million, with an allotment date of 10 May.
The second tranche of 293.1 million shares to raise approximately $6.2 million is subject to shareholder and other regulatory approvals. GPR will hold an Extraordinary General Meeting on or around June 4, followed by a scheduled allotment date for tranche 2 on 10 June.
The issue price of 2.1c per share represents a discount of 22.2% to the last close and an 8.6% discount to the 30-day volume weighted average price.
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.