GEOPACIFIC RESOURCES LTD - Interim / Quarterly Report 2021

ASX: GPR 30 April 2021

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Quarterly Activities Report

For the period ending 31 March 2021

Geopacific Resources Ltd (‘ Geopacific’ or ‘the Company’ ; ASX: GPR) is pleased to provide an update on its activities and cashflow for the quarter ended 31 March 2021.

Highlights

Successful completion of $140 million placement and $1.87M Share Purchase Plan (‘ SPP ’)
Funds from the placement coupled with the US$100m of announced project financing pending with Sprott Private Resource Lending II L.P.[1] provide the capital to develop the high margin, high returning Woodlark Gold Project
Early phase works have continued for the Woodlark Gold Project (the ‘ Project ’)during the quarter:
Letter of Intent (LOI) to support the placement of order for first phase of mining equipment
Order placed by GR Engineering Services (‘ GRES ’) for procurement of the SAG and ball mills
Design, supply and construction of the permanent camp awarded to Pacific Rim Constructers (‘ PacRim ’), with detailed camp design and pad preparation underway
The Company remains well placed to achieve December 2022 Quarter target for first gold production
Appointed Graeme Rapley as Project Director with oversight of all construction activities on Woodlark Island
No lost time injuries during the quarter. Our workforce and access to site remains unaffected by COVD-19

Chief Executive Officer, Tim Richards commented

“It was exceptionally pleasing to be able to significantly advance development activities at our high margin Woodlark Gold Project during the quarter. Pre-construction activities continued un-affected on site and the Company placed orders for long lead time components, reflecting our commitment to the Project. The LOI for the first phase of mining fleet ensures that equipment will be onsite to commence pre-strip in Q4 2021. The prudent capital spend on our pre-construction activities, coupled with the appointment of Graeme Rapley to oversee all of the on-island construction activities will ensure the Project remains on track for first gold pour in Q4 2022.

I would like to thank all of our new and existing Shareholders for their support of our equity placement and SPP. The funds from the placement, coupled with the project financing from Sprott provide the capital required for the development of the Woodlark Gold Project as well as the ongoing exploration ativities of the Company.

On a community level the village relocation is progressing well with positive feedback from Stakeholders on the design and construction quality.

The significant achievements over the past quarter see Geopacific well placed to commence process plant construction in the current quarter and I look forward to updating you on our progress.”

1 Refer to the ASX announcement on 6 October 2020.

Geopacific Resources Limited

www.geopacific.com.au

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THE WOODLARK GOLD PROJECT

The Woodlark Gold Project is a high margin gold project with significant exploration upside located on the Woodlark Island in Papua New Guinea. Key Metrics from the Project Execution Update (ref ASX release 30 November 2021[2] ) are detailed below.

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Key Metrics
Average All-in Sustaining Costs
High Margin
(AISC) of $1,239/oz (US$904/oz)
Rapid Project Rapid post-tax project payback
Payback period of 1.8 years.
+1 Moz of +1 million ounce mine plan
gold in Ore underpinned by Measured and
Reserve Indicated Ore Reserves [3] .
+10 Year Current Ore Reserve provides 13
Project years of process plant feed
Simple Mining
Conventional open pit mining of
and Process
near surface mineralisation
Route
Untapped Three phased exploration strategy
Exploration developed to target high value
Potential opportunities.
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FINANCIAL ACTIVITIES

Successful $140 Million Placement to fund development of the Woodlark Gold Project

During the quarter the Company completed a successful $140 million placement with shareholders, after an Extraordinary General Meeting (EGM) approving Tranche 2 of the capital placement announced in December 2020. The Placement consisted of two tranches:

Tranche 1: 43.7 million shares were issued in December 2020 raising $18.4 million. The raise was made pursuant to the Company’s placement capacity under Listing Rule 7.1 and Listing Rule 7.1A; and
Tranche 2: 289.6 million shares were issued in February 2021, post the EGM to raise $121.6 million under Listing Rules 7.1 and 10.11.

The Company has also completed a SPP at $0.42 per share, the same price as the Placement, to raise a further $1.87 million.

The Company held $143 million of cash and equivalents at the end of the period. The work program to finalise the US$100 million of project funding from Sprott Resource Lending is well advanced and sees the Company well positioned to complete the funding package for the capital construction cost of the Woodlark Gold Project in the June 2021 Quarter.

2 All material assumptions underpinning the production target and forecast financial information continue to apply and have not changed materially.

3 Refer to the Ore Reserve Estimate as announced on 7 November 2018.

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Table 1: Source and Use of Funds

Source of Funds	A$m		Use of Funds	A$m
Cash on hand (31 March 2021) 143 Remaining Development Costs* 222 Proposed funding from Sprott Resources Lending 130 Financing Costs & Reserve Accounts 26 Exploration 3 Corporate & Management Reserve 22
Total 273 Total 273

The Sprott Resource Lending facilities are non-binding and subject to the conditions. A$ value is based on an exchange rate of 0.77 AUD:USD. *Total capital estimate of $254.8m less project costs incurred up to 31 March 2021. Establishment capital estimate completed to a -2%/+8% level of accuracy.

OPERATIONAL ACTIVITIES

Placement of key orders

Geopacific has authorised GRES to place an order for the procurement of the SAG and ball mills and associated hardware and tooling.

Placing the order at this time acts to maintain the integrity of the Project schedule as the grinding circuit is on the critical path for plant construction
GRES completed a detailed tendering process including technical and commercial evaluations in September 2020, with CITIC Heavy Industries Co. Ltd (CITIC) selected as the preferred bidder. CITIC have been manufacturing processing equipment for more than 50 years and have successfully delivered mills to mining projects all over the world
The fabrication, installation and commissioning of the grinding mills is critical on the path for delivery of the Woodlark Gold Project so timely procurement provides significant risk reduction to the overall schedule
The Woodlark Gold Project continues to drive towards mobilisation for construction of the process plant in Q2 of 2021.

Geopacific has issued a LOI to HBS (PNG) Limited (‘ HBS’ ) for the purchase of the first phase of the mining fleet for the Woodlark Gold Project.

The LOI provides HBS with the authority to order five Caterpillar 775 haul trucks and one Caterpillar 6015 excavator
Equipment delivery and commissioning targeted for Q4 2021 consistent with previously disclosed Project schedule
Mining Contract discussions with HBS are progressing well with the contract anticipated to be signed in Q2 2021
The commencement of mining operations in Q4 2021 is consistent with the overall mining strategy, which entails HBS undertaking pre-strip and the first three years of mining, allowing Woodlark to leverage off their in-country expertise and de-risk the early stages of the Woodlark Gold Project.

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Project Execution Update

The design of the permanent camp has been awarded to PacRim and the contractor has commenced work
The temporary construction camp has been procured with first components due for delivery to site in late April 2021
The detail design of the new wharf and causeway has been awarded to Madsen Giersing and work has commenced
Detailed design of the tailings circuit has been awarded to Brass Engineering
Progress of community relocation program significantly ramped up with first houses completed in early April 2021 and handed over to community members
The cost control system (‘ CMS ’) has been implemented and is in operation.

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Figure 1: Current Work Areas

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Finalisation of Key Contracts

Significant progress was made during the quarter in relation to finalising the following major contracts:

Contract	Contractor		Status
EPC	GRES	•	All key contract terms agreed.
		•	Drafting of the long form agreements commenced and is
			expected to be completed in April 2021.
		•	FEED, and engineering is approximately 30% complete at end of
			March 2021.
Mining	HBS	•	All general conditions of the contract agreed.
Services		•	Draftingof the longform agreement completed.
Power	Contract Power	•	All key contract terms agreed and signed.
Station		•	Long form agreements drafted and are being reviewed by the
			GPR legal team,expected to be completed in April 2021.
Drilling	Quest Exploration	•	All general conditions of the contract agreed.
	Drilling	•	Draftingof the longform agreement completed.

Other Activities

Non-core Projects

Geopacific believes that delivering the Woodlark Gold Project into production will generate the greatest return for shareholders. As a result, the Company will focus on the development and financing of the Woodlark Gold Project and review its non-core assets.

Kou Sa Copper Gold Project, Cambodia
The Company is in negotiation with the vendors of the Kou Sa Project to dispose of its interest in the project.
Fijian Gold Projects, Fiji
All licences have been relinquished.

SUSTAINABILTY

Occupational Health and Safety

During the quarter there were no lost time injuries recorded.

As the Woodlark Gold Project advances towards construction, it is crucial that safety management processes and procedures on site appropriately reflect the level and type of activity that the next phase of the Project will bring. A key focus during the quarter was the development and implementation of a new health and safety management system which included:

Board endorsement of an updated Health and Safety Policy
Roll out of a new site induction and Health and Safety training program
Appointment of a Health and Safety Manager (commencing in April 2021)
Appointment of a Senior Site Safety Officer (commenced in January 2021)

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Training

Training activities continued during the quarter focused on:

Continued roll out of internal safety training on site
Construction related training, including logging and dressing of timber as well as introductory building skills
My Potentia surveys continue to be rolled out across Woodlark Island to identify prospective employees. A total of 877 assessments were completed at end of March 2021.

Community and Social Responsibility

One of the key benefits of the Woodlark Gold Project will be the opportunity for landowners on Woodlark Island to benefit from business opportunities that are manageable, sustainable and profitable. Geopacific is committed to partnering with the local community to identify and develop these business opportunities. During the quarter, the specialist team dedicated to facilitating the partnership with the local community to identify and develop the business opportunities, continued their efforts. The team held a number of presentations and workshops at communities across the Woodlark Island to provide an overview of the establishment of an umbrella Landowner company, and underlying sub-clan investment companies to manage, landowner business activities and other landowner investments.

Data collected from the workshops included nominations for directors for the various entities as well as demographic data which will be used to establish the shareholder registries for each of the sub-clan investment companies. Planning is now underway to hold elections for the directorships of the umbrella company and the sub-clan investment companies.

This engagement program is due for completion in the June 2021 quarter, by which time it is expected that all of the necessary registrations and governance processes will be in place to enable Landowner Companies to tender for contract opportunities.

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