Geopacific Resources has issued a letter of intent to contract GR Engineering for engineering, procurement and construction (EPC) works at the Woodlark gold project in Papua New Guinea.
The EPC de-risks the largest component of the capital expenditure requirement, as it is expected to be a guaranteed maximum price (GMP) deal.
The Woodlark project is located on an island in the Milne Bay province of Papua New Guinea (PNG). It has one million ounces of gold reserves, with a grade for the first five years of over 1.5 grams a tonne gold.
The project has all-in sustaining costs of $866 an ounce and currently holds a 600 square kilometre exploration licence.
Geopacific managing director Ron Heeks said the company was on track to deliver gold production in a timely and cost-efficient manner.
“GR Engineering has a strong reputation in successfully designing and constructing processing plants on time for a guaranteed maximum price,” Heeks said.
“Geopacific is confident that their recent experience in PNG and strong track record in constructing similar projects will greatly de-risk the construction of Woodlark.”
GR managing director Geoff Jones said, “our clients are increasingly seeking certainty and a track record of performance and GR Engineering has been able to demonstrate this to Woodlark, including by reference to it successful project outcomes in the turnkey design and construction of mineral processing plants in the gold sector.”
The processing plant will be built between the Kulumadau and Busai pits.