News: Video: Woodlark Island Gold Project

Woodlark Island Gold Project – GPR recently announced they had entered into a project-level, earn-in agreement to acquire up to a 75% interest in the Woodlark Island Gold Project (Woodlark) in Papua New Guinea. Woodlark has a reserve and resource of 776koz and 2.1Moz of gold respectively, and a DFS completed in 2012 highlighted the potential for a 1.8Mtpa facility to produce more than 100koz gold over an initial 9 year mine life.

Kou Sa Cu-Au Project - The Kou Sa project is an advanced exploration asset in Cambodia.  Drilling at the project has encountered a number of high grade copper/gold intercepts (inc. 17m @ 12.38% Cu eq. from 19m; 41m at 1.69% Cu eq from 55m).  The company recently announced a maiden resource at Kou Sa of 51,000t Cu eq, with an additional resource upgrade expected in the future.

Fiji portfolio – GPR has one of the largest portfolios of gold/copper exploration assets in Fiji.  Drilling is due to commence on the Faddy’s Prospect during 2016.  GPR has identified a potential opportunity for a toll milling agreement at the Faddy’s Prospect in the future.

Analyst Comment:  The Woodlark Island Gold Project appears to be an excellent opportunity for GPR, as it is one of the few open pittable, multi-million ounce gold deposits in the Asia/Pacific region that has not been developed.

We see exploration upside to grow both the reserve and resource further, more importantly we believe a reduction in the initial capital cost estimate (US$160m) is likely, given the original estimate was at the peak of the resources boom (2012).  Investors however should be aware there is a risk that the transaction may not proceed as GPR is still in a due diligence period.

We believe there remains good exploration potential at the Kou Sa copper/gold project, although the maiden resource was smaller and at a lower grade than we anticipated.  However, with further resource upgrades likely in the near future, Kou Sa could still become Cambodia’s first mining operation, however further work and time will be required.

Valuation: As there is a risk that the Woodlark transaction may not proceed given GPR is still in the due diligence period, we have not valued GPR at this time.   We will review this pending the completion of the transaction.