Geopacific Faces Funding Crunch, Converts Bonds and Raises Capital to Stay Afloat

Quarterly Cash Flow Overview

Geopacific Resources Limited disclosed its cash flow report for the quarter ending 31 December 2024, revealing a net cash outflow of $766,000 from operating activities. The company’s expenditures were primarily driven by exploration and evaluation costs, which amounted to $670,000 for the quarter. Administrative and corporate costs included a notable $0.9 million refund related to PNG GST, partially offsetting expenses.

Investing activities also contributed to cash outflows, with payments of $350,000 mainly related to project studies and community relocation programs. Despite these outflows, the company maintained a cash balance of $1.79 million at the end of the quarter.

Debt Management and Bond Conversions

Geopacific has been actively managing its short-term debt facilities. The company entered into bond subscription agreements with major shareholders Deutsche Balaton AG and 2Invest AG, securing $3.5 million and $1.8 million respectively in unsecured funding. Throughout 2024, the maturity dates of these bonds were extended multiple times in exchange for prolongation fees.

Significantly, in October 2024, portions of these bonds were converted into fully paid ordinary shares, reducing the outstanding bond balance. Subsequently, in January 2025, the remaining bond balances, including fees and interest, were repaid in full, marking a key milestone in deleveraging the company’s balance sheet.

Capital Raise to Support Woodlark Project

With an estimated funding runway of just under two quarters based on current cash burn, Geopacific launched a $40 million pro-rata renounceable entitlement offer in December 2024. The proceeds, received in January 2025, are earmarked to advance the Woodlark Project, the company’s flagship gold development asset.

This capital raise is critical for sustaining operations and progressing project development, given the company’s ongoing exploration and evaluation expenditures. Management has expressed confidence in maintaining current operating cash flows and meeting business objectives with the new funding in place.

Outlook and Strategic Implications

Geopacific’s recent financial maneuvers underscore the challenges junior mining companies face in balancing exploration ambitions with liquidity constraints. The successful entitlement offer alleviates immediate funding pressures but raises expectations for tangible progress at Woodlark to justify investor confidence.

Investors will be watching closely how the company deploys the new capital, manages costs, and navigates commodity price fluctuations. The full repayment of bond facilities also signals a cleaner capital structure, potentially positioning Geopacific for future strategic initiatives.