Australian miner halts work on Woodlark Gold and Silver project in PNG

 AUSTRALIAN miner Geopacific Resources has suspended construction works on its Woodlark gold and silver project in Milne Bay, Papua New Guinea as it continues to review costs estimates and schedules.

Last December, Geopacific warned that there would be a likely increase in capital cost for Woodlark.

Chairperson Andrew Bantock said: “Having recently been appointed as chairperson, I am focused on ensuring the company thoroughly works through its strategic options.

“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.”

Last July, Geopacific Resources Ltd had secured AU$100 million (K257.5mil) for the construction of its gold and silver mine on Woodlark Island, Milne Bay.

Chairman Ian Clyne had confirmed securing the funding through a debt facility.

Mineral Resources Authority (MRA) managing director Jerry Garry confirmed the firm suspended construction work as it needed time to re-calculate the costs.

Initial project cost was AU$130 million (K314.88 million) over a 13 years’ mine life.

The Woodlark project was expected to produce 980 000 oz and have a net present value of AU$347-million (K840 million) and an internal rate of return of 34 per cent.

Despite the suspension of construction work, Garry said Geopacific had improved its housing designs for the relocation exercise following MRA’s intervention.

He added that exploration work still continues.

Garry told The National: “Initial cost for developing mine has changed significantly because of the Coronavirus period.

“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.”

The National / Pacific Mining Watch

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