trending Market Intelligence /marketintelligence/en/news-insights/trending/irpp-pq23ki8ift4q_xong2 content esgSubNav
In This List

Geopacific happy to see some private equity exit even as stock slides 11.5%


Japan M&A By the Numbers: Q4 2023


Infographic: The Big Picture 2024 – Energy Transition Outlook

Case Study

An Oil and Gas Company's Roadmap for Strategic Insights in a Quickly Evolving Regulatory Landscape


Essential IR Insights Newsletter Fall - 2023

Geopacific happy to see some private equity exit even as stock slides 11.5%

Geopacific Resources Ltd.'s ASX stock fell as much as 11.5% on Sept. 6 after Pacific Road Capital sold its 6% stake in the Papua New Guinea-focused gold junior, whose Managing Director Ron Heeks is happy to see the back of all that private equity which he did not want more of in his share register.

Geopacific announced Sept. 6 that Pacific Road on-sold the 6% which were held in a fund approaching the end of its term to a range of existing institutional and sophisticated investors.

Heeks told S&P Global Market Intelligence that the specific fund was due to end its 10-year life, and Geopacific was the last holding the fund needed to exit before closing, and said it had been something of a burden as it was an overhang from its takeover of Kula Gold Ltd., its partner in the Woodlark joint venture of which Geopacific recently acquired 51%.

He said that while it was good of Pacific Road — which collectively includes the holdings of Pacific Road Capital Management Pty Ltd., Pacific Road Holdings SARL, Pacific Road Capital A Pty Ltd.and Pacific Road Capital B Ltd. — to come across with the Kula transaction, they had to wind up that particular fund, and besides, "I definitely didn't want more private equity."

"Everybody that we talk to, as much as they say 'you've got a spectacular register,' they immediately then say 'you've got a lot of PE.' So to take 6% of private equity off the register was excellent. It's a lot more flexible now so I'm more than happy about that. I wouldn't have liked it to go back into private equity," he said.

Geopacific also engaged Ironstone Capital Pty Ltd. in the second quarter as debt adviser for the A$180 million Woodlark project in Papua New Guinea, with the definitive feasibility study due by the end of September, and hopes to have the financing wrapped up by the end of the year for project.

Heeks said he expects the debt-equity split to be roughly the standard 60% debt, 40% equity for such a project, and that Woodlark had received plenty of interest from conventional banks and larger private equity among other institutions, though Geopacific also has Tembo Capital Management Ltd RCF Management LLC and U.S. holding company Franklin Resources Inc., also known as Franklin Templeton Investments, on its register which could present themselves as finance options.

"One of the things in our favor is that next year we'll be one of the few companies with a 1 million ounce DFS that's fully permitted and ready to go. So the people who fund mining projects for a living don't have too many people to talk to," he said.

Regional sampling underway has returned high-grade rock chip results and identified a number of major gold soil anomalies, from which the first targets will be drilled in October.