Photo: Woodlark Project - Geopacific Resources
Geopacific Resources, an Australian mining company, has halted operations on its Woodlark gold and silver project in Milne Bay, Papua New Guinea, as it reviews cost projections and timetables.
Geopacific predicted in December that Woodlark's capital costs would almost certainly rise.
"Having recently been chosen as chairperson, I am focused on ensuring the firm properly works through its strategic choices," said Andrew Bantock.
“The suspension of these activities limits the company’s cash spend as we reassess how to develop the Woodlark gold project in the most efficient manner possible.
“However, we remain focused on the underlying value of the Woodlark gold project which has over one million ounces of gold in reserves, significant untested mineral resource growth potential and has seen over AU$100-million (about K257 million) invested over the past 18 months in project design and development.”
Geopacific Resources Ltd received AU$100 million (K257.5 million) in July to build a gold and silver mine on Woodlark Island in Milne Bay.
Chairman Ian Clyne acknowledged that the money will come from a loan facility.
Jerry Garry, general director of the Mineral Resources Authority (MRA), stated that the company had halted building activity because it wanted more time to recalculate costs.
Over a 13-year mine life, the project cost AU$130 million (K314.88 million).
The Woodlark project was predicted to generate 980 000 oz of gold, with a net present value of AU$347 million (K840 million) and a 34 per cent internal rate of return.
Despite the building halt, Garry claims that Geopacific's house plans for the relocation exercise have improved as a result of MRA's assistance.
He went on to say that the exploratory effort is still ongoing.
"The initial cost of constructing mine has increased dramatically because of the Coronavirus phase," Garry said.
“Costs of building mines now have increased by 16 per cent to 20 per cent.
“Geopacific suspended some of their activities.
“They have to raise further capital.
“Construction work was suspended as of this morning (Thursday).
“All fly in fly out employees were made redundant until further notice. But they continue with relocation exercises of locals and exploration work on gold resources.
“Eighty decent houses were completed for landowners.”
Reference: Pacific Mining Watch (7 February 2022). “Australian miner halts work on Woodlark Gold and Silver project in PNG”.
