Geopacific to acquire full ownership of Woodlark

Geopacific Resources will acquire all of Kula Gold’s rights and interests in the Woodlark gold project in Papua New Guinea, consolidating Geopacific’s direct ownership of the project.

This will lift Geopacific’s ownership from 85 per cent to 100 per cent, in return for 150 million Geopacific shares and an estimated $7 million in cash.

Kula directors have recommended shareholders vote for the transaction.

Acquiring 100 per cent direct interest in Woodlark is a positive step in the project’s development pathway, according to Geopacific managing director Ron Heeks.

“The simplified ownership structure enhances its attractiveness to potential financiers and positions it to take advantage of the growing Australian Dollar margin as projected revenues and most costs are to be in Australian Dollars,” Heeks said.

Ownership consolidation takes place as the gold price moves well above the definitive feasibility study (DFS) pricing assumption of $1650 per ounce.

Kula will immediately pay the cash forward to settle its estimated $0.68 million loan from Geopacific. It will also cease to be a subsidiary and joint venture partner of Geopacific and “pursue new opportunities”.

On completion of the transaction, Messrs Heeks and Smith will both retire from the Kula board. The company does not expect to appoint any further directors at this stage.

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