PLANS to bring gold production back to the historic Woodlark Island fields are being fast-tracked on the back of the recent entry of Western Australian minerals explorer Geopacific Resources Limit into the Woodlark Island Gold Project Joint Venture.
Geopacific joined the Woodlark Island Gold Project in July after reaching a farm-in agreement with Kula Gold to provide A$18.65 million in funding towards the development of the project. And the company has wasted no time in making its intensions known about its desire to see a new mining development begin on Woodlark as soon as possible.
In early August the company announced an update on the development potential of the large Kulumadau deposit at Woodlark as part of its initial assessment of the current resources at Woodlark.
The aim of that study was to establish which areas hold the best potential to convert a further 500,000 ounces of gold from resources into reserves in order to deliver an overall reserve of 1.2 million ounces in accordance with the earn-in transaction it has agreed to with Kula Gold to acquire up to 80% of the project.
The current resource for Woodlark is 45.1 million tonnes @ 1.50g/t of gold for 2.12 million ounces, including a reserve of 10.9 million tonnes @2.20g/t of gold for 766,000 ounces.
The ongoing assessment began with a detailed evaluation of the Kulumadau Resource area, and Geopacific has reported that it has already identified significant potential to increase both resources and reserves.
The assessment used 3D modelling and according to Geopacific it demonstrates how the resources at Kulumadau are situated in relation to existing pit designs.
Geopacific said this shows there is substantial inferred mineralisation surrounding the pits, including an area with a core of approximately 5g/t Au.
The company believes these resources may be amenable to conversion with a combination of improved economics, selected drilling and updated pit designs.
Busai deposit upgrade
Geopacific subsequently released a similar report on the Busai deposit where the company has identified what is says is significant potential to increase both resources and reserves.
The Busai assessment also used 3D financial modelling to demonstrate the relationship between current pit designs and existing resources, and Geopacific said those studies have demonstrated that, in spite of a substantial portion of the resource being Measured and Indicated (M&I), a large portion has not been converted to reserves because high OPEX costs resulted in the in-pit, cut-off grade being too high.
Geopacific said it believes there is an opportunity to capture this mineralisation by rebasing the costs, which were originally done at the height of the gold boom in 2012.
The company said the assessment also provides it with the opportunity to target optimal areas for development drilling to increase the resource.
Alongside its initial resource study successes, Geopacific has achieved a key corporate milestone with the company receiving very strong support for a capital raising to provide funds for further development at Woodlark.
Via a heavily oversubscribed two tranche share issue, the company raised A$15 million.
Geopacific managing director, Ron Heeks, said investors had shown their backing for its Woodlark plan by their strong support for the capital raising.
“We believe that we have the right strategy to transition from exploration to mining and return value to our shareholders. The support we have received in this capital raising confirms that the market agrees.
“We welcome new shareholders and thank all shareholders for their support.
“The Woodlark Gold Project is a game changer for Geopacific and we plan to deliver.”
Mr Heeks said Geopacific is currently in tranche one of the Kula Gold transaction, which includes working on a development plan, which will allow the company to define a 1.2 million ounce gold reserve.
This is an incentive target and achieving it will see Geopacific earn 51% of Woodlark in tranche two of the transaction, with a proposed third tranche allowing the company to earn an 80% interest if it is successfully completed.
“Woodlark is an advanced-stage, permitted gold project. It adds significant value to our portfolio of gold and copper-gold projects in the Asia-Pacific region,” Mr Heeks said.
“Look at the location – its ‘elephant country’ – two million ounces is a relatively small deposit. The future holds great potential for Woodlark and we look forward to delivering value to our shareholders.”
Geopacific plans to complete the development plan and announce its intention to proceed to tranche two before the end of 2016.
The island has a long history of gold mining dating back to the late 1800’s with records showing an estimated pre-World War II gold production, including alluvial sources, of about 220,000 ounces of gold.
Modern gold exploration was initiated on Woodlark Island in 1962 with the Bureau of Mineral Resources (BMR) undertaking surface geochemistry, limited geophysics and diamond drilling during 1962 and 1963 at Kulumadau.
Woodlark Island, has been subject to 40 years of mostly continuous modern exploration without sufficient Resources being established to warrant investment in a mining operation.
Exploration in the past concentrated around the old historical mining centres of Kulumadau, Busai and Boniavat, with the early exploration strategy being heavily dependent upon surface geochemistry, geophysics and geological mapping.