16 November 2017

We recently visited GPR’s Woodlark Gold Project

(WGP), located on Woodlark Island in the Milne Bay

province of PNG. GPR’s technical team have had a

busy year on site, with extensive validation of existing

data, over 23,000m of new drilling for resource,

reserve and metallurgical purposes and various

studies to feed into an updated DFS. This work is

suggesting Woodlark will be a large tonnage, low

strip ratio, long life (>10yrs) deposit which will

provide a robust foundation for the development of a

straightforward gold operation. Importantly, the

project is fully permitted, with the location of

Woodlark allowing for a unique set of circumstances

including easy access & logistics, supportive locals,

flat topography & abundant road-building materials

(coronus); these features should allow a rapid, low-

risk & cost-effective build process to be implemented.

We expect construction to commence in 2H CY18,

with first gold in 2H CY19. Maintain BUY with

unchanged price target of A$0.10/sh (1xP/NPV15).

Woodlark is being rapidly de-risked

• Extensive review & validation of all historical data

including reinterpretation of geology & integration of

best-practice methods of data capture and QAQC

• Robust understanding of geology, structure and

mineralisation, bulking-out the deposits will ensure low-

risk, low strip ratio pit designs & long mine life

• Recent drilling focused on infill, extensional and

compliance holes to extend mineralisation & meet

JORC 2012 requirements; aiming to create large, high

confidence pits with high proportion of Measured &

Indicated to drive maximum conversion into reserves

• Additional metallurgical drilling completed

• Updated resource & reserve in Q1 CY18, with DFS

likely to be completed around mid CY18

• Significant exploration upside to add mine life

Fully permitted, easy access will allow a quick build

• Woodlark resides on a fully permitted mining lease

• Easy deep water access, allowing delivery of

large/bulk items eg. bulk fuel deliveries etc

• Potential to pre-fabricate processing plant offsite,

allowing large sections to be delivered to site and

reassembled; would see a quick & low risk build period

Price target (1xP/PNV) unchanged at $0.10/sh, BUY

• We are yet to make changes to our dev’t or operating

assumptions which include a $150m capex for

104kozpa over 11yrs at 5.2:1 strip & A$950/oz AISC

Company Data

Shares – ordinary (M) 1,802

Market capitalisation ($M) A$48.7

12 month low/high ($) $0.022 / $0.046

Average monthly turnover ($M) $0.5m

GICS Industry Diversified metals & mining

Financial Summary (fully diluted/normalised)

Year end June 2016A 2017F 2018F 2019F 2020F

Revenue ($M) 0.1 0.0 0.0 62.5 140.2

Costs ($M) 1.9 2.0 3.5 30.3 66.6

EBITDA ($M) -1.9 -2.0 -3.5 32.1 73.6

NPAT ($M) -4.1 -1.8 -3.1 18.3 35.8

EPS (¢ps) -0.4 -0.1 -0.2 1.1 2.2

PER (x) na na na 692.9 95.3

Cashflow ($M) na na na 2.4 1.2

CFPS (¢ps) -3.5 -4.0 -3.1 29.2 59.0

PCFPS (x) -0.3 -0.2 -0.2 1.8 3.6

Enterprise Value ($M) na na na 1.5 0.8

EV / EBITDA (x) 20 25 76 142 91

Dividends (¢ps) -10.5 -12.6 -21.6 4.4 1.2

Yield (%) 0.0 0.0 0.0 0.0 0.0

GPR – performance over one year

Disclosure and Disclaimer

This report must be read with the disclosure and disclaimer on the final page of this document. Petra Capital Pty Ltd acted as sole lead manager and bookrunner for GPR’s placement of $15m at A$0.043/share on 18 August 2016, for which a fee was received.

Geopacific Resources (GPR) BUY Share Price: A$0.027

Woodlark site visit - proving up a robust gold project Target Price: A$0.10

Brett McKay

+61 2 9239 9605

This report is prepared solely for the use of Phoebe Lee of Geopacific Resources Limited

16 November 2017

2

Analysis

Source: Petra Capital

Geopacific Resources Share Price ($) 0.027

(GPR) Iss. Shares (current) (M) 1152.3

Iss. Shares (diluted) (M) 1735.3

7-Nov-17 Unlisted Options (M) 0.0

Year End 31 Dec A$ Mkt Cap. ($M) 31.1

PROFIT & LOSS 2015A 2016A 2017F 2018F 2019F 2020F RESOURCES INVENTORY 2015A 2016A 2017F 2018F 2019F 2020F

Sales Revenue $M 0.0 0.0 0.0 0.0 62.5 140.2 Mining Inventory

Other Income $M 0.1 0.1 0.0 0.0 0.0 0.0 Tonnes Mt 0.0 0.0 19.0 19 18 16

Operating Costs $M 1.9 1.9 2.0 3.5 30.3 66.6 Grade g/t 0.0 0.0 2.0 2.0 2.00 2.00

Exploration $M 0.0 0.0 0.0 0.0 0.0 0.0 Contained Gold oz 0 0 0 1,221,728 1,170,287 1,054,544

Other $M 0.0 0.0 0.0 0.0 0.0 0.0 Resources

EBITDA $M (1.9) (1.9) (2.0) (3.5) 32.1 73.6 Tonnes Mt 0.0 0.0 45 45 44 43

Dep. & Amort. $M 0.1 0.1 0.0 0.0 3.0 15.7 Grade g/t 0.0 0.0 1.5 1.5 1.5 1.5

EBIT $M (2.0) (1.9) (2.0) (3.5) 29.2 57.9 Contained Gold oz 0 0 0 2,174,998 2,123,557 2,007,814

Net Interest $M 0.0 0.0 (0.2) (0.4) 3.0 6.7

Pre-Tax Profit $M (2.0) (1.9) (1.8) (3.1) 26.2 51.2 PRODUCTION (100%)

Tax $M 0.0 2.2 0.0 0.0 7.9 15.3 Ore Milled Mt 0.00 0.00 0.00 0.00 0.8 1.8

Minorities $M 0.0 0.0 0.0 0.0 0.0 0.0 Grade g/t 0.0 0.0 0.0 0.0 2.0 2.0

Net Profit $M (2.0) (4.1) (1.8) (3.1) 18.3 35.8 Recovery % 0% 0% 0% 0% 90% 90%

Abnormal $M 0.0 0.0 0.0 0.0 0.0 0.0 Gold Produced oz 0 0 0 0 46,297 104,168

Reported Profit $M (2.0) (4.1) (1.8) (3.1) 18.3 35.8

Dividends Paid $M 0.0 0.0 0.0 0.0 0.0 0.0 REVENUE (attributable)

Adjustments $M 0.0 0.0 0.0 0.0 0.0 0.0 Woodlark $M 0.0 0.0 0.0 0.0 62.5 140.2

Retained Earnings $M (14.0) (18.2) (19.9) (23.0) (4.7) 31.1 Other $M 0.0 0.0 0.0 0.0 0.0 0.0

CASH FLOW Total $M 0.0 0.0 0.0 0.0 62.5 140.2

Revenue $M 0.0 0.0 0.0 0.0 62.5 140.2

Costs $M (1.7) (3.6) (2.0) (3.5) (30.3) (66.6) COSTS (attributable)

Net Interest $M 0.0 0.1 0.2 0.4 (3.0) (6.7) Cash costs A$/oz 0 0 0 0 724 757

Tax Paid $M 0.0 0.0 (2.2) 0.0 0.0 (7.9) All in sustaining costs A$/oz 0 0 0 0 800 825

Gross Cash Flow $M (1.7) (3.5) (4.0) (3.1) 29.2 59.0 Cash costs US$/oz 0 0 0 0 543 560

Net Capex $M (0.0) (0.0) 0.0 (69.3) (90.7) (2.8) All in sustaining costs US$/oz 0 0 0 0 600 610

Exploration $M (10.8) (12.1) (8.0) (8.0) (5.0) (5.0) Cash costs $M 0.0 0.0 0.0 0.0 26.8 63.1

Dividends $M 0.0 0.0 0.0 0.0 0.0 0.0 Other/corporate $M 0.0 2.0 2.0 4 4 4

Other $M (5.0) 0.0 0.0 0.0 0.0 0.0 Total $M 0.0 2.0 2.0 3.5 30.3 66.6

Free Cashflow $M (17.5) (15.7) (12.0) (80.4) (66.5) 51.2

Equity Issues $M 25.4 14.6 20.0 30.0 0.0 0.0 CAPEX (attributable)

Net Borrowings $M (0.1) 0.0 0.0 50.0 50.0 (20.0) Woodlark $M 0.0 0.0 0.0 69.3 90.7 2.8

Net Investments $M 0.0 0.0 0.0 0.0 0.0 0.0 Other $M 0.0 0.0 0.0 0.0 0.0 0.0

Surplus Cash Flow $M 7.8 (1.1) 8.0 (0.4) (16.5) 31.2 Total $M 0.0 0.0 0.0 69.3 90.7 2.8

BALANCE SHEET

Cash $M 12.6 11.5 19.5 19.1 2.5 33.8 DEPRECIATION (attributable)

Other Current $M 0.8 2.3 0.0 0.0 0.0 0.0 Woodlark $M 0.0 0.0 0.0 0.0 3.0 15.7

Total Current $M 13.3 13.7 19.5 19.1 2.5 33.8 Other $M 0.0 0.0 0.0 0.0 0.0 0.0

Fixed Assets $M 0.2 0.1 0.1 69.4 157.1 144.2 Total $M 0.0 0.0 0.0 0.0 3.0 15.7

Exploration $M 26.2 33.2 41.2 49.2 54.2 59.2

Intangibles $M 0.0 0.0 0.0 0.0 0.0 0.0 EBITDA (attributable)

Other $M 8.6 13.7 13.7 13.7 13.7 13.7 Woodlark $M 0.0 -2.0 -2.0 -3.5 32.1 73.6

Total NC Assets $M 34.9 47.0 55.0 132.3 225.0 217.1 Other (incl. writedowns) $M 0.0 0.0 0.0 0.0 0.0 0.0

TOTAL ASSETS $M 48.2 60.7 74.5 151.4 227.6 250.9 Total $M 0.0 -2.0 -2.0 -3.5 32.1 73.6

Total Debt $M 0.0 0.0 0.0 50.0 100.0 80.0

Current Liab $M 1.1 0.6 (1.6) (1.6) 6.2 13.7 HEDGING (attributable)

Non Current Liab $M 0.0 2.2 0.3 0.3 0.3 0.3 Gold hedged oz 0 0 0 0 0 0

TOTAL LIAB $M 1.1 2.8 (1.3) 48.7 106.5 94.0 Hedged price US$/oz 0 0 0 0 0 0

NET ASSETS $M 47.1 57.9 75.8 102.7 121.1 156.9 Hedged price A$/oz 0 0 0 0 0 0

SH/HLDRS FUNDS $M 47.1 57.6 75.8 102.7 121.1 156.9 Sales hedged % 0% 0% 0% 0% 0% 0%

RATIO ANALYSIS Ave. deliverable price US$/oz 1160 1247 1264 1280 1265 1245

EPS ¢ (0.3) (0.4) (0.1) (0.2) 1.1 2.2 Ave. deliverable price A$/oz 1,541 1,677 1,648 1,684 1,687 1,682

PER x na na na na 2.4 1.2

EPS Growth % >100 >100 (70.4) 75.7 692.9 95.3 ASSUMPTIONS

EBITDA per share ¢ -0.2 -0.2 -0.1 -0.2 1.9 4.5 Exchange Rate A$/US$ 0.75 0.74 0.77 0.76 0.75 0.74

EBITDA Multiple x -11.4 -16.7 -22.3 -12.7 1.4 0.6 Gold Price US$/oz 1160 1247 1264 1280 1265 1245

EV/EBITDA x -4.7 -10.5 -12.6 -21.6 4.4 1.2 Gold Price A$/oz 1541 1677 1648 1684 1687 1682

CFPS ¢ (0.2) (0.3) (0.2) (0.2) 1.8 3.6 Silver price US$oz 15.71 17.09 18.41 20.00 20.00 20.00

PCFR x na na na na 1.5 0.8 90 day Bank Bills % 2.26 2.14 2.09 2.09 2.09 2.09

DPS ¢ 0.0 0.0 0.0 0.0 0.0 0.0 10 Yr Bond rate % 2.71 2.38 2.78 2.78 2.78 2.78

Yield % 0.0 0.0 0.0 0.0 0.0 0.0 Interest Rate Charged % 6.00 6.00 6.78 6.78 6.78 6.78

Franking % 0 0 0 0 0 0

Payout Ratio % 0% 0% 0% 0% 0% 0%

Gearing D/E % na na na 30.1 80.5 29.5

Interest Cover x 0.0 0.0 8.4 8.6 9.8 8.6 VALUATION (fully diluted) at 15% discount rate A$M A$ps

EBITDA Margin % na na na na 51.5 52.5 Woodlark (80%) 118.8 0.07$

EBIT Margin % na na na na 46.7 41.3 Exploration 40.0 0.02$

Return On Assets % (4.1) (3.2) (2.7) (2.3) 12.8 23.1 Corporate / Other (14) (0.01)$

Return On Equity % (4.2) (7.2) (2.3) (3.0) 15.2 22.8 Net Cash (Debt) 19.5 0.01$

Eff Tax rate % 0 30 30 30 30 30 Total 164.2 0.10$

This report is prepared solely for the use of Phoebe Lee of Geopacific Resources Limited

16 November 2017

3

Site visit to Woodlark builds confidence in the project

We recently visited the Woodlark Gold Project (WGP), located on Woodlark Island approximately

600km east of Port Moresby in the Milne Bay Province of Papua New Guinea (Figure 1). WGP is a

unique project which can be fast-tracked into production, given it is fully permitted, has been

extensively drilled and studied and offers easy logistics owing to its favourable location.

GPR has completed over 23,000m of drilling on top of the 275,000m achieved prior to its

involvement. Extensive development studies and testwork has also been conducted previously, with

the GPR team in the final stages of reviewing, validating and, in some cases, completing additional

work to ensure the project is well understood, fully derisked and ready to build.

Figure 1: Location of Woodlark Island

Source: Company reports, Petra Capital

Recent work aiming to de-risk the project so it’s ready to build

Since becoming involved in Woodlark in late 2016, GPR has undertaken extensive work programs

aimed at de-risking the various aspects of the project to ensure it is ready to build. This has been

driven by the GPR management team who are experienced in building mining operations,

particularly in remote locations. They require a high degree of certainty in all aspects of a project

before they feel comfortable moving the project into the construction phase.

Areas of focus have included:

• geology and mineralisation, including growing the orebodies along strike and at depth

• ore body optimisation to ensure a robust resource & reserve

• metallurgy

• geotechnical

• mine design, optimisation & scheduling

• processing plant design

• social engagement & acceptance at local, provincial & federal government levels

• access and logistics

With these work programs nearing completion and the data being used in resource/reserve updates

and further studies relating to the DFS, fieldwork will soon turn exploration, including following up on

an extensive number of targets largely generated by previous owners of the project.

This report is prepared solely for the use of Phoebe Lee of Geopacific Resources Limited

16 November 2017

4

Geology, mineralisation & resource/reserves

The WGP is currently focused on three main orebodies located within 5-10km of each other, being

Kulumadau, Busai and Woodlark King which are all located in the granted mining lease (Figure 2).

Around half of the 275,000m of drilling previously conducted at Woodlark has been into these three

deposits, with a resource of 2.1Moz and reserve of 766koz defined by Kula Gold in mid-late 2012.

GPR and its independent resource consultants have thoroughly reviewed all previous drilling to

determine how much of this data can be used in updated resource calculations in accordance with

the JORC 2012 requirements. As part of this validation process, a number of drill holes were

removed from the database and/or are in the process of being re-drilled by GPR for confirmatory

purposes. This drilling is expected to being completed in the coming weeks and will then allow

finalisation of resource calculations with updated reserves soon thereafter.

We anticipate the resource and reserve to be announced in Q1 CY18. The high density of drilling

and extensive data validation undertaken by GPR should allow a high proportion of resources to

report in the Measured and Indicated categories, thus allowing for a high conversion into reserves.

Figure 2: Location of key deposits, infrastructure selected previous exploration results

Source: Company reports, Petra Capital

Both the Kulumadau and Busai deposits are hosted by volcanic and volcaniclastic rocks which have

been subjected to multiple phases of structural deformation as part of a once-active volcanic

complex. Consequently, low sulphidation epithermal mineralisation is largely contained within host

rocks that are extremely sheared and brecciated (Figures 3 & 4). There is a general association

between breccia intensity and better grade mineralisation, however this is not always the case.

Further, areas of base metal sulphide development also tend to host higher grade gold

mineralisation. Gold tends to reside in the finer grained matrix of the breccias, rather than within the

larger breccia clasts.

Brecciation is more intense within the Kulumadau deposit, with gold mineralisation hosted in a

complex structural setting. Breccias are also well developed at Busai, although tends to be less

intense and form a more uniform broad zone of mineralisation. In an effort to better understand the

geology and host rocks to gold mineralisation at both Kulumadau and Busai, GPR has generated a

breccia scoring system. This system is used to categorise the various breccia types and has been

successful in identifying, tracing, extending and predicting breccia geometries and strike-

extensions. This has helped drilling successfully target gold mineralisation both along strike and

down dip, as evidenced by drill results announced by GPR over the last several months.

This report is prepared solely for the use of Phoebe Lee of Geopacific Resources Limited

16 November 2017

5

Figure 3: Brecciated core from Kulumadau Figure 4: Milled clasts in breccia at Kulumadau

Source: Petra Capital Source: Petra Capital

Orebody optimisation and implications for project design

The Kulumadau, Busai and Woodlark King deposits have now all been well drilled, with a sound

understanding of the geology and controls on mineralisation. Further, extensive metallurgical

testwork has been running in parallel with the drilling program, with this work helping to assess the

optimum cut-off grades for the resource calculations. The combination of these key elements is

allowing GPR to assess the best way of designing the project to complement the nature and grade

of mineralisation hosted in the three main deposits.

Given the structural complexity apparent at both Busai and Kulumadau, it’s likely that a staged,

large tonnage operation may be the optimal way to develop Woodlark. We believe this would de-

risk each orebody by bulking out the tonnes to lessen the emphasis and exposure to structural

controls and potential difficulties which might be expected when attempting to selectively mine

higher grade zones. Based on the cut-off grade for similar open pit, free-milling, lower grade

operations, eg. Simberi, we would expect resources at Kulumadau and Busai to have a cut-of grade

around 0.5g/t Au. Further, testwork is being conducted on mineralised material at lower grades to

determine if the physical properties are conducive to upgrading into a concentrate for CIL

processing through a secondary circuit. This testwork and evaluation is ongoing.

A larger tonnage deposit is therefore likely to be lower grade relative to previous resources and

reserves delivered for Woodlark. However, due to the deposit being ‘bulked-out’, the stripping ratio

is also likely to be materially lower, with this to largely drive better project economics. The

combination of bulk tonnages at low strip ratios means the open pits will be low risk and with a

longer mine life. We believe at a 2Mtpa operating rate, GPR will initially target in excess of 10 years

of mine life with exploration upside likely to extend mine life significantly, in our view.

This report is prepared solely for the use of Phoebe Lee of Geopacific Resources Limited

16 November 2017

6

Metallurgy

Gold mineralisation is typically found as fine free gold disseminations mainly within the fine grained

breccia matrix and within intensely altered volcanic host rocks. There is also a close association

between high grade gold and more abundant pyrite/base metal development throughout the

mineralised zones (Figure 5 & 6). Zones of intense quartz-carbonate veining also tend to host better

grades.

Metallurgical testwork has been conducted on ore from the three main deposits at WGP, with

around 30-35% gravity recoverable gold in combination with a standard CIL processing plant to

deliver an average gold recovery of 92%. Grind size is expected to be around p80 passing 106µm.

Additional metallurgical testwork has been requested by Lycopodium for metallurgical variability

studies as part of reserve calculations and the DFS. Drilling to generate drill core has been

completed, with samples sent to ALS in Perth for analysis.

The project is fully permitted at 1.8Mtpa ± 30%, with a nominal base case of around 2Mtpa likely, in

our view.

Figure 5: Pyrite/base metal mineralisation in breccia Figure 6: Quartz-carbonate veining at Busai

Source: Petra Capital Source: Petra Capital

This report is prepared solely for the use of Phoebe Lee of Geopacific Resources Limited

16 November 2017

7

Geotechnical and hydrological

As part of mine optimisation studies associated with reserve calculations and the DFS, the

geotechnical and hydrological aspects of the project have been reviewed and refined. This has

included analysis of previously designed open pit wall angles which were considered overly shallow

based on the strength of the surrounding wall rock. Further investigation and review is allowing

more realistic wall designs to be considered by GPR. This has included recognition of previous

geotechnical drill holes being positioned in zones of mineralisation rather than wall rocks, which

drove overly shallow wall angle designs and lifted the strip ratio. We expect GPR will be able to

steepen open pit wall angles which will lead to a lower stripping ratio.

Coronus material covers a moderate proportion of the overall resources at WGP, particularly at

Kulumadau East and Boscala. This material is free-digging and will be used extensively for civil

works around the project, particularly road building. GPR is also investigating if coronus building

blocks can be made on site, which could then be used for residential building construction on the

island.

All hydrological studies have been completed, with process water expected to be a combination of

pit dewatering and seawater, with seawater used predominantly to mix tailings to the required

density prior to disposal.

Permitting and social engagement

The WGP is fully permitted for the construction of a 1.8Mtpa (±30%) CIL gold project, associated

infrastructure and tailings disposal. This includes a 20 year mining lease with an updated condition

requiring the project to be built and commissioned by the end of CY19.

GPR has been actively engaging with the Woodlark community since becoming involved in the

project in late CY16. Woodlark Island is approximately 60km long and 20km wide and is currently

home to around 6,000 people according to most recent estimates. Around 2,000 people are

believed to reside in and around the main population centres near the airstrip on the south-eastern

end of the island, as well as numerous smaller villages scattered around the island, including a

larger one at Kulumadau. Given Woodlark is located 600km from Port Moresby and a long open-

ocean boat trip from the Provincial capital of Alotau, access to Woodlark for PNG nationals is

difficult. This has meant very few outside influences on the island, with little/no transient population,

no power, cars or health/social infrastructure. Basic supplies for the locals are barged from the

mainland on an ad-hoc basis.

GPR utilise a World War II airstrip on the south-eastern end of the island with charter flights taking

1.5 hours from Port Moresby. All bulk supplies for the camp and ongoing drilling program (eg. fuel,

drilling supplies, food etc) are barged in, with a 12m deep surveyed channel and existing dock

utilised for unloading. There is an existing 200,000L of fuel storage capacity at the port.

The camp is well established, with accommodation and messing for up to 80 people. Also at the

camp location are the core yard, core storage and geology offices; heavy vehicle workshop; offices

and satellite communication facilities (Figure 7). Over $150m has been spent at Woodlark prior to

GPR involvement, including the 275,000m of previous drilling.

GPR has found the local people to be widely accepting of the development of WGP, which was

consistent with our discussion with members of the community on the island. The project also has

Provincial and National Government support. The local community is keen to see employment

opportunities and the development of better health and social infrastructure.

As part of the construction process, GPR is required to relocated c.500 people in 171 houses

mainly from the Kulumadau village on the southern margin of the Kulumadau orebody. The formal

resettlement plan has already been agreed with the locals, with GPR currently budgeting US$7m.

The National Government has already agreed to take a 5% equity ownership stake in Woodlark,

with this to be gifted to the Milne Bay Province and the local Woodlark population. The PNG

Government will be required to pay 5% of sunk costs for this 5% share, with an ongoing

requirement to contribute to costs on a pro-rata basis from that point on.

This report is prepared solely for the use of Phoebe Lee of Geopacific Resources Limited

16 November 2017

8

Figure 7: Core yard, core storage and geology facilities at the Woodlark camp

Source: Petra Capital

Access, infrastructure and topography

Woodlark Island is located in Milne Bay, approximate 280km from the Provincial capital of Alotau

near the eastern tip of the PNG mainland (Figure 1). Outside of GPR’s transport arrangements,

there are no regular transport services accessing Woodlark from anywhere else in PNG. Essential

supplies, food etc for the local population is barged to the island on an as-needed basis. GPR

currently sources its camp and drilling supplies from the mainland via regular barge services.

Access is via a 12m deep surveyed channel into a protected harbour which has a small wharf

capable of supporting the loading/unloading of smaller cargoes.

The harbour and wide, deep water channel will be utilised as a key transport route for the project,

allowing delivery of largely pre-assembled infrastructure and mining/processing equipment to within

5km of the mine where a new wharf will be constructed (Figure 8). GPR envisages the construction

of the full processing plant in a location off the island (likely China), including all electrical wiring and

piping. It’s possible the plant could be completed to the point it can be switched on and tested prior

to being dismantled and transported to site in large sections via barge. Each section will then be

transported from the port around 5km to the location of the processing plant where it will be

reassembled and the electrical and piping simply ‘plugged in’. This will minimise the need to have

numerous trades’ people on site to construct & wire the plant and will also allow a rapid and low risk

build and commissioning process.

Woodlark Island features very minor topography, with the majority of the island quite flat. This

makes for easy road access around the project area. Roads construction will be well considered,

considering the 5m of rain which falls on the island per year; coronus forms a large part of the pre-

strip which will be used extensively for road construction.

GPR personnel currently access the site via 1.5hr flight a charter aircraft direct from Port Moresby.

There is a World War II airstrip on the south-eastern tip of the island; the strip was constructed from

local coronus material and remains in excellent condition (Figure 9). The drive from the airstrip to

the project site takes around 1 hour.

This report is prepared solely for the use of Phoebe Lee of Geopacific Resources Limited

16 November 2017

9

Figure 8: View from Kulumadau over protect bay and port facilities

Source: Company reports, Petra Capital

Figure 9: Airstrip on Woodlark Island

Source: Petra Capital

This report is prepared solely for the use of Phoebe Lee of Geopacific Resources Limited

16 November 2017

10

Drilling successfully extends mineralised zones at Kulumadau & Busai

Drilling undertaken by GPR has been successful in extending mineralisation along strike and at

depth at both Kulumadau and Busai. This will result in larger resources sitting in low risk, low strip

ratio, shallow pit shells (150-175m deep). Importantly, mineralisation remains open in most

directions, with the most compelling upside potential still to come from the ‘Boscala’ and ‘Village’

zones at Kulumadau (Figure 10). These two areas will remain the target of future drilling, given

Boscala was a recent blind discovery which extends the Kulumadau East orebody and remains

open to the north and at depth. The Village area also remains open after early GPR drilling hit 23m

at 4.8g/t which is yet to be follow up due to current access constraints due to the proximity to the

local village. Further extensive drilling will be conducted in these areas once the project moves into

the development phase.

Further, the higher grade core to the Kulumadau deposit remains open at depth, with widths and

grades potentially amenable to underground mining (Figure 11). Ground conditions will be a key

consideration when assessing this opportunity, particularly the mining method; however the weak

ground conditions are confined to the mineralised zones, with competent wall rocks potentially

making for favourable mining conditions.

Figure 10: Location of Boscala & Village areas Figure 11: Deeper hits at Kulumadau incl. 18m at

10.3g/t

Source: Company reports, Petra Capital Source: Company reports, Petra Capital

This report is prepared solely for the use of Phoebe Lee of Geopacific Resources Limited

16 November 2017

11

Exploration upside likely to be very significant, lead to longer mine life

Woodlark Island has amazing exploration upside, in our view. Given the priority has been

resource/reserve development and getting the project build-ready, GPR is yet to focus on areas

outside the three main gold deposits at Woodlark, despite the extensive number of targets which

warrant further investigation. With resource and metallurgical drilling now close to completion at

Kulumadau and Busai, GPR is starting to review, assess and prioritise exploration opportunities.

These targets are wide-ranging, consisting of early-stage geochemical and geophysical anomalies

through to prospects which have a number of good hits in historical wide-spaced and/or sporadic

drilling (Figure 12). Many of these targets are within close proximity to the proposed mill location

and have the potential, with further work, to be introduced into the mine plan to extend mine life.

Further, there is significant potential to make new gold discoveries under the 5-30m thick cover

(coronus) sequence, as was the case for Kulumadau East and Boscala. Coronus covers a large

part of Woodlark Island and masks the geochemical signature of underlying gold mineralisation. A

combination of geophysics, predictive geology and drilling will need to be employed to further

explore for additional mineralisation beneath the coronus. A key exploration target for GPR is the

5km long corridor between Busai and Kulumadau which is under coronus cover and recognised to

contain a significant regional structure which is likely to be controlling mineralisation. This corridor

has seen no effective drilling in the past.

Figure 12: Select regional exploration results

Source: Company reports

This report is prepared solely for the use of Phoebe Lee of Geopacific Resources Limited

16 November 2017

12

Conclusion

GPR has had a busy year since starting its aggressive drilling and evaluation campaign at

Woodlark in late 2016. After extensive technical review, GPR management are confident all

aspects of the project have been thoroughly considered, with work programs required for the DFS

nearing completion. The updated resource/reserve will likely form the basis to a low-risk mine

development which will see the Kulumadau and Busai deposits bulked-out to deliver significant,

free-milling tonnages at very low strip ratios to be exploited over a mine life in excess of 10 years.

With permitting in-hand, this would be a straightforward base case outcome, in our view.

In addition, exploration upside is significant at Woodlark and will likely drive a longer mine life.

Further drilling will likely grow known deposits, particularly at Kulumadau around the village area to

the south and Boscala to the north. Further, with numerous high quality exploration targets within

easy trucking distance to the processing plant, ongoing exploration success should continue

introducing additional ore sources to further extend mine life.

We are yet to make changes to our development or operating assumptions for Woodlark which

include $150m capex for 104kozpa Au over an 11yr mine life at 5.2:1 strip and A$950/oz AISC.

This generates a NPV of $0.10/sh using a 15% discount rate. We will review these assumptions

once the new resource and reserve is released.

This report is prepared solely for the use of Phoebe Lee of Geopacific Resources Limited

16 November 2017

Petra Capital Level 17, 14 Martin Place, Sydney NSW 2000

Director: George Marias +61 (0)2 9239 9601 gmarias@petracapital.com.au

Research (Resources): Brett McKay +61 (0)2 9239 9605 bmckay@petracapital.com.au

Research (Resources): Matthew Schembri +61 (0)2 9239 9630 mschembri@petracapital.com.au

Research (Industrials): Killian Murphy +61 (0)2 9239 9607 kmurphy@petracapital.com.au

Research (Industrials): Daniel Porter +61 (0)2 9239 9625 dporter@petracapital.com.au

Research (Industrials): James Lennon +61 (0)2 9239 9618 jlennon@petracapital.com.au

Research (Property): Jonathan Kriska +61 (0)2 9239 9633 jkriska@petracapital.com.au

Sales: Frank Barila +61 (0)2 9239 9603 fbarila@petracapital.com.au

Sales: Richard Macphillamy +61 (0)2 9239 9604 rmacphillamy@petracapital.com.au

Sales: Vincent Pisani +61 (0)2 9239 9617 vpisani@petracapital.com.au

Sales: Colin Redmond +61 (0)2 9239 9613 credmond@petracapital.com.au

Sales: Iain Gow +61 (0)2 9239 9608 igow@petracapital.com.au

Sales: Peter Veldhuizen +61 (0)2 9239 9609 pveldhuizen@petracapital.com.au

Sales: Vince Barila +61 (0)2 9239 9627 vbarila@petracapital.com.au

Corporate (ECM): Conrad Anderson +61 (0)2 9239 9610 canderson@petracapital.com.au

Administration: Krystle Garven +61 (0)2 9239 9635 kgarven@petracapital.com.au

Administration: Samantha Tingley +61 (0)2 9239 9636 stingley@petracapital.com.au

Administration: Silvia Fratta Pasini +61 (0)2 9239 9621 spasini@petracapital.com.au

Administration: Larissa Falvo +61 (0)2 9239 9611 lfalvo@petracapital.com.au

Legal & Compliance: Stephen Newton +61 (0)2 9239 9612 snewton@petracapital.com.au

Financials: Tony Christelis +61 (0)2 9239 9615 tchristelis@petracapital.com.au

Disclosure

This document has been prepared in Australia by Petra Capital Pty Ltd which holds an Australian Financial Services License AFSL 317 944. Petra Capital Pty Ltd is an ASX Market Participant. Petra Capital Pty Ltd and its associates, officers, directors, employees and agents, from time to time, may receive brokerage, commissions, fees or other benefits or advantages, hold securities in companies researched by Petra Capital Pty Ltd and may trade in these securities either as principal or agent. . Petra Capital Pty Ltd acted as sole lead manager and bookrunner for GPR’s placement of $15m at A$0.043/share on 18 August 2016, for which a fee was received.

Disclaimer

The information or advice contained in this report has been obtained from sources that were accurate at the time of issue, however the information has not been independently verified and as such, Petra Capital Pty Ltd cannot warrant its accuracy or reliability. Persons relying on this information do so at their own risk. To the extent permitted by law, Petra Capital Pty Ltd disclaims all liability or responsibility for any direct or indirect loss or damage (including consequential loss or damage) caused by any error or omission within this report, or by persons relying on the contents of this report.

This report is published by Petra Capital Pty Ltd by way of general information or advice only. This report does not take into account specific investment needs or other considerations that may be pertinent to individual investors. Before making any investment decisions based on this report, parties should consider, with or without an investor adviser, whether any relevant part of this report is appropriate to their financial circumstances and investment objectives. Petra Capital Pty Ltd is a licensed institutional/wholesale stockbroking firm. The report is only intended for institutional and sophisticated clients to whom Petra Capital Pty Ltd has issued the report. Petra Capital Pty Ltd is not licensed to advise retail investors – retail investors should contact their own stockbroker or financial adviser/planner for advice.

Key Risks – Resources Companies under Coverage

Key risks in relation to the resources sector and the resources companies that are the subject of research by Petra Capital’s analysts include commodity price volatility, currency risk, technical/licencing/operational risks, litigation/political risk, development risk and sovereign risk for overseas assets, as well as feasibility, permitting and financing risks related to the development of growth projects.

Ratings

Information regarding the scope and expertise of our research services, processes for selection for coverage, and the management of conflicts of interest can be found on Petra Capital’s website at www.petracapital.com.au/research-disclosures. Petra Capital uses the following ratings system and definitions: Buy - Forecast to outperform the Market by more than 5%; Hold - Forecast to perform up to 5% above or below the Market; Sell - Forecast to underperform the Market by more than 5%; Speculative Buy - Speculative Investment; Take Profits - Recommend taking short term profits in a stock we remain fundamentally positive on a medium term view; Accept Offer - For a company under takeover where we see the offer as a fair price with low risk of a competing offer; No Rating - No rating at this time. Market performance is relative to the S&P/ASX Small Ordinaries Index which we assume generates a neutral return on a 12 month basis.

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This material is intended for use by major U.S. institutional investors (as such term is defined in the U.S. Securities Exchange Act of 1934) and “$100 million investors” only and not the general investing public or retail customers. “$100 million investors” means any entity, including any investment adviser (whether or not registered under the U.S. Investment Company Act of 1940) that owns or controls (or in the case on an investment adviser has under management) in excess of US$100 million in aggregate financial assets (i.e. cash, money-market instruments, securities of unaffiliated issues, futures and options on futures and other derivative instruments). Transactions by or on behalf of any US person in any security mentioned in this document may only be effected through Global Alliance Securities, LLC (“Global Alliance”), a U.S. broker dealer. The information upon which this material is based was obtained from sources believed to be reliable, but has not been independently verified. Therefore, its accuracy is not guaranteed. Additional and supporting information is available upon request. This is not an offer or solicitation of an offer to buy or sell any security or to make any investment. Any opinion or estimate constitutes the preparer’s best judgement as of the date of preparation and is subject to change without notice. Petra Capital Pty Ltd or Global Alliance and their associates or affiliates, and their respective officers, directors and employees may buy or sell securities mentioned herein as agent or principal for their own account.

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International investors are encouraged to contact their local regulatory authorities to determine whether restrictions apply in buying/selling this investment.

ABN 95 110 952 782 ACN 110 952 782

AFSL 317 944

This report is prepared solely for the use of Phoebe Lee of Geopacific Resources Limited