Woodlark Faces Funding and Permit Risks Despite Strong DFS and Resource Upgrade

Resource Upgrade and Ore Reserve Confirmation

Geopacific Resources Limited (ASX:GPR) has lifted the stakes at its Woodlark Gold Project in Papua New Guinea with a significant update to its 2026 Definitive Feasibility Study (DFS). The combined Mineral Resource Estimate (MRE) has increased by 19% to 70.1 million tonnes grading 0.88 g/t gold, containing 1.98 million ounces of gold. This upgrade is largely driven by a lower cut-off grade of 0.3 g/t Au, reflecting a higher gold price assumption of A$3,788/oz, and updated pit shell constraints.

Underpinning the DFS is a new Ore Reserve Estimate totalling 34.3 million tonnes at 1.09 g/t Au for 1.2 million ounces of gold, split between 2.3 million tonnes of Proved Reserves at 2.54 g/t and 32 million tonnes of Probable Reserves at 0.98 g/t. This Ore Reserve is based on Measured and Indicated Mineral Resources within the life-of-mine open pit designs and marks a 19% increase in tonnage and 15% increase in contained gold compared to the 2018 reserve, despite a slight dip in average grade by 3%.

Robust Project Economics and Production Profile

The DFS paints a compelling financial picture, with a post-tax net present value (NPV) of A$1.3 billion and an internal rate of return (IRR) of 50.6% based on a gold price of A$5,500 per ounce. The project promises rapid capital payback within approximately 18 months of first production, expected in November 2028 following a targeted final investment decision (FID) in late 2026.

Woodlark’s processing facility is designed for 3.5 million tonnes per annum (Mtpa) throughput through a conventional carbon-in-leach (CIL) plant, with an average gold recovery of 89.7%. The life-of-mine average annual gold production is forecast at 100,200 ounces, peaking at 116,900 ounces in year four. The all-in sustaining cost (AISC) is estimated at A$1,966 per ounce, underscoring the project's competitive margin.

Mining and Processing Details

Mining will be conducted via open pit using conventional truck and excavator fleets, with a total material movement of 221.6 million tonnes and a strip ratio of 5.2:1. The mine plan prioritises higher-grade, near-surface material early in the schedule to optimise cash flow and payback.

The processing flowsheet leverages proven technology, including single-stage jaw crushing, SAG and ball milling, gravity concentration, and a hybrid leach/CIL circuit. Metallurgical testwork confirms high recoveries, although elevated arsenic in some Busai ore zones may reduce gold recovery, a risk mitigated through ore blending and predictive recovery models.

Permitting, Community Engagement, and Environmental Management

Woodlark holds key permits, including Mining Lease 508 valid until 2034 with extensions underway, and an Environmental Permit amended in March 2026 to accommodate increased throughput and infrastructure changes. The PNG Minister for Mining extended the construction and commissioning deadline to October 2027, reflecting governmental support.

Community relocation agreements are well advanced, with approximately 79% of rehousing commitments completed, including schools, churches, and health clinics. Environmental management plans address acid rock drainage, sediment control, tailings management via a deep-sea tailings placement system, and biodiversity protection, aligning with PNG regulatory requirements and international standards.

Funding and Next Steps

Geopacific has appointed Argonaut Capital and Taylor Collison as joint financial advisers to progress project financing, targeting a mix of debt, equity, and strategic partnerships to fund the estimated A$650 million development cost. Early works including site access road upgrades and final permitting activities are planned ahead of the FID.

The project’s robust economics, high proportion of Measured and Indicated resources, and established permitting framework position Woodlark as a development-ready gold project in a supportive jurisdiction. Exploration upside remains with near-mine targets and untested copper-gold porphyry potential on the island.

These developments come after the company’s recent leadership changes, including the appointment of Hamish Bohannan as Managing Director, aligning management for the transition from DFS to development Geopacific Appoints New MD. The DFS update also follows a major permit upgrade from PNG authorities earlier this year, which increased throughput capacity and reinforced government backing PNG Greenlights Woodlark Permit.