Geopacific Resources has closed a A$10m ($7.57m) placement to raise funds for exploration at its Woodlark project in Papua New Guinea (PNG).

Geopacific plans to issue 280 million shares at an offer price of A$0.036 as part of the initiative, which is conditional upon the receipt of shareholder approval.

The company has already undertaken a pre-feasibility study (PFS) for the Woodlark project, while work on the definitive feasibility study (DFS) is currently in progress and slated for completion in the third quarter of this year.

The placement has received support from institutional investors.

"Any new discoveries have the potential to ultimately improve the forecast gold production profile in excess of the current 100,000oz per annum and extend the mine-life."

Geopacific Resources managing director Ron Heeks said: “Having established Woodlark as a robust gold development project, it’s encouraging to see strong financial support for our strategy to finalise the DFS and bring a significant exploration programme online to continue to grow the project.

“The upcoming drill programme will define the broader exploration potential of what we believe is at least a five-million-ounce (Moz) goldfield at Woodlark.

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“This is intended to expand the project beyond previous drilling, which concentrated on near-pit Reserve drilling.

“Any new discoveries have the potential to ultimately improve the forecast gold production profile in excess of the current 100,000oz per annum and extend the mine-life.”

The regional exploration at the project will involve the deployment of two rigs to test the highly prospective Woodlark goldfield.

Results from the PFS determined that the open-pit operation has the ability to produce an average annual output of 100,000oz of gold over an initial mine-life of ten years.

The company aims to extend the life of the mine through the discovery of additional resources.

Recent work has indicated sufficient current resource and reserve base to expand beyond the Kulumadau and Busai areas.

The company also noted that there is potential for new gold deposits to be hosted on several other areas.

A portion of the placement funding is expected to be used to support two recent gold-silver discoveries at the Kou Sa project in Cambodia, as well as to meet various working capital costs.