geopacific resources ltd...kith meng is the chairman of royal group, an australian-educated khmer...

BBY Limited ABN 80 006 707 777

BBY Company Research 4 June 2014

Geopacific Resources Ltd

GPR A$0.07 TARGET PRICE N/A SPECULATIVE BUY

Geopacific Resources Limited is a mineral exploration company focused on copper and gold projects in Cambodia and Fiji.

Kurt Worden +61 2 9226 0100 [email protected]

Mike Harrowell +61 2 9226 0043 [email protected]

This Research has been prepared and issued by BBY Ltd and remains the property of BBY Ltd. No material contained in this Research may be reproduced or distributed without prior written approval of BBY, except as allowed by the Copyright Act. This Research is current at the date of publishing. For updates or further information regarding this research, please contact your advisor. BBY does or seeks to undertake business with companies covered in its research and therefore, Investors should consider this report as only a single factor in making their investment decisions. For explanations regarding ratings and other important disclosures, please refer to the disclosure section at the end of this document.

Promising copper-gold prospects in Cambodia

Geopacific Resources (GPR, Speculative Buy) is currently exploring a potential 8km copper-gold zonedefined by soil geochemistry, outcropping gossans andlimited drilling at Kou Sa, Cambodia, where it has anoption to acquire the tenement for US$14M. High gradedrilling results during the evaluation period are supportive of the company achieving its initial inground mineral inventory target of 300kt copper equivalent before deciding to proceed with the acquisition. It is too early to determine a price target; our Speculative Buy recommendation reflects the project delivery skills of themanagement team, the prospectivity of the geology, andthe supportive stance of the Cambodian government.

Exciting Geology

Early drilling (Prospect 150) has returned intersections of upto 30m grading 1.3% copper 25g/t gold. While it is early days,GPR has tested two 300m strike sections of an 8km trend,and Prospect 150 will go a long way toward underpinning thecompany’s initial target mineral inventory.

Management has project delivery skills

The team has delivered 8 projects to production in six countries, including Indonesia, Australia, China, Mongolia,and Ghana. They have a strong track record of creatingshareholder value, including Straits Asia Resources andAdamus Resources.

Cambodia – emerging opportunity

The government is keen to develop a mining industry, andGPR is well connected via its Cambodian corporate JVpartner Royal Group. International fund RCF has backedGPR, assuming a 32% stake in the company after a lengthydue diligence process.

Fijian projects – not in focus, but could attract the majors

Fijian projects require a major to assist with exploration; theymay come into focus if sovereign risk concerns abate.

Risks

1. Commodity and currency - market sentiment drivers

2. Country – legal, political, judicial, local, JV partner

3. Operational – geological. Should GPR not be convinced ofthe endowment, they could walk away from the project.

4. Funding - GPR had $1.4M cash at 31 March. Additionalexploration funding for exploration will be needed to evaluateKou Sa, then fund the acquisition if results are supportive.

Company Data Number of shares 194MMarket capitalisation $14MFree Float (%) 33.012 month high/low $0.10/$0.03Average monthly turnover $0M% S&P/ASX 200 n/a% All Ordinaries n/aDDM Ranking n/aESG Disclaimer Score (Ranking) n/aGICS Industry Group Materials

BBY Technical View – as at 3/06/2014

Short Term Downtrend Resistance $0.087Long Term Uptrend Support $0.045

-

GPR Share Price Performance

Geopacific Resources Ltd BBY Research

BBY Limited 4 June 2014 2

Investment Proposition – exciting copper-gold in an emerging jurisdiction Geopacific Resources (GPR) offers exposure to promising copper-gold exploration in Cambodia, an

emerging jurisdiction keen to develop an industry which has delivered economic benefits to its neighbours.

Country risk is mitigated by 1) joint venture partner the Royal Group, which is well connected to the Cambodian government, and 2) by Resource Capital Funds (RCF) taking a 32% stake in the company after a lengthy due diligence process.

Management is respected, having developed eight operations in six nations to date. Recent drilling results have received market attention, with the share price doubling since the end of April.

There is potential for GPR to identify its initial target 300kt contained copper before executing its option over the tenement, but this will be contingent on further exploration success.

The company also has exploration projects in Fiji, which are not a current priority.

Chart 1. Cambodian copper gold focus Chart 2. Fijian projects

Source: GPR Source: GPR

Key strategic JV partner secured prior to asset selection GPR’s interest in the Kou Sa project is via Cambodian subsidiary company Royal Australian Resources,

which has an option to acquire 100% of the tenement. Royal Australian Resources is a company owned 85% by GPR and 15% by JV partner Royal Group, and will be the vehicle by which GPR and RoyalGroup will explore for metals across Cambodia. Royal Group is a Cambodian corporate entity which operates 28 divisions including mobile phone networks, television stations, as well as joint ventures withANZ bank, Toll Transport Group (ports and rail) and Telecommunications (Mobitel, Samsung, Motorola, and Siemens). Kith Meng is the Chairman of Royal Group, an Australian-educated Khmer refugee who returned to Cambodia once democracy was restored in 1991. Meng is President of Cambodia’sChamber of Commerce, and is highly regarded, with the title of ‘Neak Oknha” conferred by the RoyalFamily. He could be compared to Thailand’s Thaksin Shinawatra, although he intends to stay out of politics. He often accompanies Prime Minister Hun Sen to promote Cambodia’s economic interests.

Board – track record of delivery GPR’s board have developed eight operations in six countries including Indonesia, Ghana, and

Australia. These included taking Adamus Resources’ Nzema project through feasibility to production ontime and on budget. Adamus subsequently merged with Endeavour Mining in August 2011 to form a$600M mid-tier gold mining company. The Board also has a strong Asian experience via its Straits Asiaoperations (Sebuku and Jembayan thermal coal mines, Mt Muro gold mine in Kalimantan).

Terms of the Option Agreement to acquire the Kou Sa tenement GPR has until 31 January 2015 to decide whether to pay US$14M to acquire the Kou Sa tenement from

the Korean vendors, which hold the tenement via Golden Resource developments Co Ltd, is a company incorporated and registered in the Kingdom of Cambodia. We anticipate there is some flexibility in thisdate, given comments in a recent presentation (May 2014), and that the vendors continue to enjoy acollaborative working relationship with GPR in Cambodia. The US$14M is a considerable acquisitionprice, and GPR wants to make sure that there is sufficient mineral endowment to justify the acquisitionprior to making a decision to proceed.



Table 1. Acquisition timeframe may be extended

Terms of Acquisition US$M Due Status

12 mths exclusivity for evaluation 0.7 31 January 2013 Paid

12 mths extension of exclusivity for evaluation 0.7 31 January 2014 Paid

Fixed if purchased 100% 14.0 31 January 2015 May be extended

Source: GPR

Table 2. Recent transactions in Cambodia

Vendor Acquirer Date Price Area (km2) Commodity Acquisition Indochine Resources (IDC)

Capital Mining (CMY) Oct-13 US$10M 1900 Gold price to earn 85% interest*

Angkor Gold (ANK-TSX-V)

Mesco Gold (subsidiary of Indian Steel Mesco)

Mar-13 US$1.2M 300 Gold +7.5% NSR, rights to mine and develop Phum Syarung project

Korean party Geopacifc Resources (GPR)

Nov-13 US$14M 158 Copper-Gold 100% interest

Southern Gold (SAU)

Mekong Minerals (unlisted) Jul-12 US$5.7M 1500 Gold price to earn 70% interest

OZ Minerals (OZL) Renaissance Minerals (RNS)

Feb-12 ~A$18M# 1100 Gold 100% Okvau/Occhung, 729koz resource

Source: Company info. * Transaction has not completed; # There are a A$22.5M milestone payments in this transaction.

Kou Sa – not alone in the region

GPR has an Option Agreement to acquire a 158km2 exploration licence in Cambodia, where the company has identified five prospects to date, which include, copper, copper-gold, and gold-molybdenum mineralisation. The copper-gold trend has a potential 8km strike length; GPR has drilled two 300m strike length portions to date.

Available geological descriptions and the results to date would indicate a series of copper+/-gold+/-+/-silver+/-zinc and gold only mineralised structures, hosted within volcanic sequences, with limestone and skarn also observed locally in either outcrop or float. Geophysical results also indicate the presence ofmagmatic intrusions at depth.

While it is too early to determine an analogous deposit, the region includes a number of significant copper/copper gold deposits, including PanAust’s Phu Kham and KTL deposits in neighbouring Laos, its undeveloped Puthep deposits in Thailand, and the copper-dominated deposits at MMG’s Sepon project in Laos (eg Thengkham). Mineralisation at these deposits is largely skarn-related (Phu Kham also includes stockwork mineralisation styles), occurring in proximity to felsic intrusions. GPR’s mineralisation may also be skarn-related, although the setting appears to be more back-arc rather than within thecollision zones. Common features include mineralisation type (copper+/-gold); geology (andesitic volcanic/volcaniclastics, limestone, skarns, proximal intrusions), and age (Permo-Carboniferous).

Chart 3. Regional gold and copper deposits Chart 4. Phu Kham – ~1700m x 900m with 1Mt copper, 1.4Moz gold (as at 31 Dec 2013)

Source: Cromie, PW (2010) Geological setting, geochemistry and genesis of the Sepon gold and copper deposits, Laos. PhD thesis, University of Tasmania.

Source: PNA



Chart 5. Kou Sa copper anomalies vs PNA’s Phu Kham deposit footprint

Phu Kham contained 1Mt copper and 1.4Moz gold in resources at 31 December 2013

Source: GPR, PNA

Chart 6. Skarn systems also include MMG’s Thengkham at Sepon

GPR’s deposits likely to be within the dashed green zone around/above instrusions ie skarn systems

Source: http://www.smedg.org.au/Tiger/Sepon.htm. After Sillitoe, 1990.

Is a 300kt contained copper target realistic? GPR needs visibility on a sizeable copper target to exercise its US$14M option over the Kou Sa project.

The company has previously stated ~300kt copper equivalent (equating to an inground value of ca A$2.1Bn, 150x the value of the acquisition) would be a reasonable initial target. At the grades from Prospect 150, a 4-5Mt resource would be a sufficient volume to contain this mineralisation. Prospect 150 occupies 300m strike of an 8km surface copper anomaly.

Chart 7. 300kt resource dimensions Chart 8. Golden Boost to CuEq grade

Grade-Tonnage Curve for 300kt Copper

0

5000

10000

15000

20000

25000

30000

35000

1% 2% 3% 4% 5% 6% 7% 8% 9% 10%

% Copper/Copper Equivalent

To

nn

age

(kt

ore

)

Gold grade as Copper Equivalent

0

2

4

6

8

10

12

14

16

18

20

1% 2% 3% 4% 5% 6% 7% 9% 10% 11%

% Copper Equivalent

Go

ld G

rad

e (g

/t)

Source: BBY Source: BBY. Gold price US$1250/oz, Copper US$7035/t



Trying to dimension Prospect 150

Of the targets drilled to date, Prospect 150 is the most promising, particularly for the high gold grades. Itwould conceptually be used for blending with ore from the other prospects which have lower copper grades. GPR has tested 300m of strike, and encountered two mineralised structures. On two sections a high grade structure was intersected with downhole widths of ~30m (we estimate a conservative true width of 20m), copper grades of 1-1.3%, and gold grades of 5-25g/t. Vertical depths of ~100m are indicated; while mineralisation to 150m depth has been drilled, but assays not published. In Table 3 we dimension the potential contained copper equivalent metal at Prospect 150 at various grades and depths. We emphasise these are speculative dimensions, with additional drilling required. The dimensions we assume will be affected by plunge and grade, and there is currently insufficient information to support our assumptions.

Table 3. What could Prospect 150 hold?

Length Width Depth SG Tonnage CuEq Grade (%) Contained CuEq

(m) (m) (m) (kt) (%) (t)

300 20 100 2.7 1620 3.00% 48600300 20 100 2.7 1620 6.00% 97200300 20 100 2.7 1620 9.00% 145800300 20 150 2.7 2430 3.00% 72900300 20 150 2.7 2430 6.00% 145800300 20 150 2.7 2430 9.00% 218700

Source: BBY Estimate

Chart 9. Gold Anomalism at Prospect 150 Chart 10. Copper Anomalism at Prospect 150


Chart 11. Cross sections through Prospect 150

Source: GPR



Chart 12. Prospect 150 – 300m zone of high grade gold, copper mineralisation

Source: GPR

Absence of free gold a bonus

GPR has panned drilled intervals of up to 400g/t gold, and not detected free gold. The close associationwith chalcopyrite mineralisation suggests gold is interstitial with the copper. If this is the case, then the project will not attract artisanal miners (ie unlike Okvau’s experience). Any development at this project would likely involve production of a copper-gold concentrate, which would recover most of the gold with the copper. This would mitigate security risks associated with production of gold doré on site.

Prospect 117 – initial results suggesting a smaller higher grade shoot?

GPR focused on Prospect 117 in the second stage of its initial drilling program, drilling out a further 300m section 7km to the east of Prospect 117. The results revealed lower grade copper and goldresults, over intervals of up to 35m depth. One significant assay included 12m grading 2.34% copper, intersected below the base of oxidation. The early stage drill out at Prospect 117 has determinedmineralised structures can be correlated, although shallow grades are lower than the other prospects.Historic drilling by the Koreans closer to outcropping gossans reveals higher grades over a narrow region; this prospect may reflect a high grade core/plunging shoot within a series of parallel, moreweakly mineralised east-west structures.

Chart 13. P117:300m strike tested, lower grade Chart 14. P117 – narrower high shoot?




Prospect 100

This prospect has received limited attention to date. GPR holes have intersected 3m grading 5.28%copper from 71m and previous Korean drilling results included 10-15m grading up to 2.27% copper. Prospect 100 occurs between Prospect 150 and Prospect 117. GPR recently discovered previous smallscale mining had occurred previously, although given the size of trees inhabiting the mullock, this musthave occurred at least 50 years ago.

Chart 15. Prospect 100 – plan of structures, previous drilling, and mined area

Source: GPR

Chart 16. untested IP target to the west at Prospect 100

Source: GPR



Other Prospects In the southern part of GPR’s tenement, the company has identified four other early stage prospects to

date. Prospect 120 is a copper-sulphide target to the east of Prospect 117, while in the southwesterncorner Prospect 180 is a copper-gold target spatially associated with the geophysical expression of aproximal intrusion at depth. To the southeast of Prospect 117 there are two gold-molybdenum soil anomalies (Prospect 190 and Prospect 170), the latter coinciding with a topographic high (ie moreresistive geology). GPR has drilled a hole at Prospect 170, with assays awaited.

In the northern part of the tenement there has been relatively little exploration. Previous explorers haveidentified a manganese deposit, although GPR has not done any follow up investigation of this ascopper remains the focus.

Table 4. GPR drill results reported to date

Hole ID Easting

(mE) Northing

(mN) Depth

(m) Dip/Azi

(°) Type From

(m) To (m) Interval

(m) Copper

(%) Gold (g/t)

Zinc (%)

P150 KDH001 544,599 1,518,086 500.2 65°/180 DD 49 54.3 5.3 0.19 NSR NSR

And 61.5 61.8 0.3 4.98 NSR NSR

KDH002 544,595 1,518,450 281.3 65°/ 360 DD 33.4 37.3 3.9 4.95 16.47 NSR

KRC001 544,608 1,518,399 61 55°/360 RC 8 16 8 0.33 NSR NSR

KRC002 544,604 1,518,321 150 55°/360 RC 48 61 13 NSR 0.2 NSR

KRC003 544,611 1,518,401 150 55°/360 RC 4 30 26 0.59 NSR NSR

Inc 15 18 3 2.42 NSR NSR

KRC004 544,497 1,518,484 144 55°/360 RC 16 48 32 1.31 25.04 NSR

Inc 16 20 4 0.61 2.03 NSR

And 21 27 6 2.88 126.57 NSR

And 32 41 9 1.14 2.56 NSR

And 45 48 3 2.82 1.64 NSR

And 52 57 5 1.3 0.73 NSR

KRC005 544,400 1,518,528 141 55°/360 RC 0 33 33 0.95 5.02 0.46

Inc 16 27 11 2.02 14.1 0.95

Inc 19 23 4 4.75 35.2 2.27

63 66 3 1.78 0.39 0.19

135 141 6 0.36 NSR NSR

KRC006 544,433 1,518,608 36 55°/360 RC 30 36 6 NSR 0.2 1.02

Inc 34 36 2 0.17 0.19 2.15

KRC007 544,817 1,518,562 159 55°/360 RC No significant results

KRC008 544,605 1,518,417 149 55°/360 RC 0 24 24 0.25 NSR NSR

98 108 10 0.25 NSR NSR

KRC009 544,701 1,518,389 135 55°/360 RC

P100

KDH003 547,199 1,519,111 251.8 45°/360 DD 70.7 73.7 3 5.28 NSR NSR

KRC010 544,498 1,518,448 120 55°/360 RC

KRC011 544,260 1,517,279 96 55°/360 RC

KRC012 544,405 1,518,378 132 55°/180 RC

P117

KRC015 550,238 1,519,019 120 55°/360 RC 4.00 26.00 22.00 0.36

70.00 75.00 5.00 0.19

KRC016 550,239 1,518,956 120 55°/360 RC 7.00 42.00 35.00 0.3

KRC017 550,472 1,518,960 99 55°/360 RC 4.00 20.00 16.00 0.17

60.00 72.00 12.00 0.41

KRC018 550,473 1,518,960 120 55°/040 RC 0.00 4.00 4.00 0.11

12.00 16.00 4.00 0.12

KRC019 550,347 1,519,010 120 55°/360 RC 0.00 16.00 16.00 0.27

36.00 48.00 12.00 2.34

Source: GPR



Chart 17. Tenement Map – eight prospects to date, and good access

Source: GPR

Tenement Location and Logistics

Kou Sa is situated in northern Cambodia, and is three hours’ drive east of major regional centre Siem Reap, and five hours drive north of Phnom Penh. A new highway traverses the tenement, while logisticsare run out of the nearby Chhaeb village, which has mobile phone reception, but battery power only. The tenement is largely flat open terrain, with minor rice cropping and livestock. There are no local residentsinhabiting the tenement. The climate is comparable to the Pilbara region of Western Australia, with a short wet season and long dry season. The wet season runs from May-October. Flooding is not a major issue given the tenement is well away from the Mekong delta.

Cambodia – a new frontier, new opportunity Cambodia remains a relatively young nation, from both a population and political perspective. It has had

a turbulent past, being a Kingdom, French protectorate, communist ally of North Vietnam, then ally ofthe US during the Vietnam War, and then was subjected to the Khmer Rouge regime, which oversaw the death of 20% of the population, resulting in a demographic with half the population aged 25 oryounger. Democracy returned in 1991 after UN intervention, and the current constitutional monarchywas finalised in 1998, after which Cambodia was admitted to ASEAN. The country has enjoyed relative political stability over the past 15 years.

Cambodia has its challenges to face. On global economic surveys it consistently polls below its neighbours, with corruption cited as a major issue, along with tangled bureaucracy, a lack of skilled labour, and poor infrastructure. Minor problems include policy instability, access to finance and poor tax structure.

Cambodia is heavily reliant on foreign aid, which has been diminishing in recent times. Its government is keen to establish a mining industry, having seen the effect mine development has had on neighbouringnations, particularly Laos. There are currently no legal operating mines in Cambodia, other than lateriteand limestone quarrying. This month, a delegation comprising the Secretary of State and two other Mines and Energy representatives visited Perth to examine the WA mining legislation, with a view to improving upon Cambodia’s current framework. Currently, the legislation provides for 20-30% fiscal regime, with the possibility of up to 7yr tax holiday, 2.5% gross revenue royalty, and 100% foreignownership permitted, and no export restrictions on gold. The Cambodian Development Council grantsexploration licences to investors; a master project plan (PFS) is required to obtain a mining licence.



Cambodian geology - short on detail, gold and copper discoveries a positive Most of Cambodia forms part of a stable tectonic region known as the Kontum Massif, which is covered

by the Khorat Basin, a sequence of Triassic-Jurassic sandstones and siltstones, which form a back-arc or continental basin covering northern Thailand and Cambodia, and contains clasts from neighbouring fold belts. This region is bounded to the north and west by the Permo-Carboniferous Loei Fold Belt, which stretches through neighbouring Thailand and Laos and comprises arc-type volcano-sedimentary sequences (andesitic volcanics, limestones). The northeastern margin is bounded by the TruongsonFold Belt, of similar age and geology. These fold belts host the Phu Kham and Sepon deposits in Laos, the epithermal Bong Mieu and Phuoc Son deposits in Vietnam, and the Puthep copper deposit in Thailand.

The Kontum Massif and Khorat Basin have been intruded by numerous small to medium scale granitic to dioritic bodies, particularly in the lower sequences of the Khorat Basin. There is also evidence ofconformable volcanic units (rhyolitic-andesitic) within the upper part of the Khorat Basin (French govtgeology maps 1971).

Much of the central area of Cambodia is covered by a large northwest trending alluvial basin infilled with Quaternary to recent sediments. These sediments are relatively thin over most of the country, butbecome thicker and more pervasive around Tonle Sap (Lake) and the Mekong Delta. In eastern Cambodia, large sheets of flood basalt contribute to the Tertiary cover in places.

Geology within GPR’s tenement includes predominantly andesitic volcanics and volcaniclastics in the southern part, and sediments in the northern part. The geology is sheared, and structures trend north-north west and east-west, with copper typically occurring in repeat structures in the east-west orientation (en-echelon?). Magnetics reveals a demagnetised zone in the southwest of the tenement package, which may reflect the presence of an intrusion at depth. There is a thin lateritic cover across most of thetenement, thickening to the north. There are occasional exposed outcrops, including gossans in the southern part of the tenement.

Geology of Cambodia

Source: GPR



Previous exploration – limited to French survey, recent Korean activity Given its history, Cambodia represents an under-explored frontier in South East Asia, experiencing an

exploration hiatus during the Vietnam War and the Khmer Rouge regime. Early exploration was undertaken by French governmental survey BGRM in the 1960s. Modern exploration has only takenplace since the introduction of laws regarding exploration, mining and foreign investment in 2006/2007.This has been led by Chinese and Korean groups funded by foreign aid, and also companies includingOz Minerals (OZL), which discovered the 729koz Okvau gold deposit (now 1.2Moz), later selling it to junior explorer Renaissance Mining (RNS). Other juniors with Cambodian projects include IndochineMining (IDC), Southern Gold (SAU), Brighton Mining Group (BTN), TSX-V listed Angkor Gold (ANK) andGerman/UK-listed Astra Resources.

Exploration across GPR’s tenement was conducted by the Korean vendor, funded from Korean aid and KORES, the Korean Geological Survey. Exploration included drilling of some 4000m of diamond core attwo prospects, where drilling occurred on or immediately below gossanous outcrops. Collar positionshave been verified, hole trace data is unavailable. GPR has confirmed the intersected copper grades by reassay.

Table 5. Historic Korean drill results

Hole ID Prospect Easting

(mE) Northing

(mN) From (m) To (m) Interval (m) Copper (%) Silver (g/t) Zinc (%)

100-1-A 100 547196 1519218 3.0 23.0 20.0 2.68 5.3 0.32

100-1-B 100 547124 1519196 21.0 23.0 2.0 0.51 1.0 0.29

27.0 30.2 3.2 1.90 2.0 0.35

37.6 39.9 2.4 3.41 4.0 0.02

100-1-E 100 547244 1519209 15.0 27.2 12.2 2.11 15.7 0.34

100-1-F 100 547206 1519196 42.3 43.7 1.4 2.58 3.0 0.02

100-1-G 100 547153 1519182 22.4 28.0 5.7 0.72 0.5 0.02

35.6 45.5 9.9 3.11 4.3 1.26

100-1-G-2 100 547163 1519261 14.1 16.0 1.9 0.52 1.0 0.48

19.2 20.9 1.7 1.17 3.0 0.22

29.8 35.0 5.2 2.81 6.1 0.46

100-1-H 100 547201 1519151 27.3 46.4 19.1 3.65 4.3 0.05

100-1-J 100 547195 1519220 5.0 20.0 15.0 1.21 2.2 0.21

29.6 33.0 3.4 1.60 2.6 0.56

100-1-O 100 547175 1519184 37.9 40.0 2.2 0.76 1.0 0.24

53.0 55.0 2.0 0.83 1.0 0.02

100-1-Q 100 547109 1519231 9.0 18.1 9.1 1.01 2.3 0.16

100-1-S 100 547223 1519160 26.5 33.3 6.8 1.59 1.5 0.05

40.0 42.0 2.0 0.54 2.5 0.13

45.1 50.0 4.9 1.19 1.5 0.13

100-5-A 100 547176 1519365 28.8 34.6 5.8 1.41 1.0 0.51

113-1-A 113 546287 1518650 59.0 60.0 1.0 0.70 6.0 3.07

114-3-A 114 546787 1518956 5.5 7.5 2.0 3.06 6.0 0.23

32.0 33.4 1.4 0.65 2.0 0.01

40.0 43.1 3.1 0.56 1.0 0.04

114-4-A 114 546927 1518623 1.5 3.0 1.5 0.56 6.0 11.65

117-1-12-B 117 550271 1519071 22.0 25.0 3.0 0.58 3.0 0.03

42.0 57.0 15.0 1.02 4.4 0.01

117-1-A 117 550318 1519015 0.0 22.2 22.2 1.96 17.2 0.14

25.0 27.2 2.2 1.51 123.0 0.04

29.2 41.0 11.8 1.35 10.8 0.01

117-1-B 117 550308 1518996 10.9 26.0 15.2 1.97 22.1 0.16

30.0 50.0 20.0 1.54 4.4 0.03

117-1-C 117 550305 1518987 6.0 20.0 14.0 1.11 7.4 0.39

117-1-D 117 550347 1519024 20.0 25.0 5.0 0.61 6.2 0.06

182-1-A 182 544704 1513771 5.3 9.0 3.7 0.58 10.0 2.27

182-1-A-1 182 544704 1513771 24.0 25.5 1.5 0.90 11.0 6.70

Source: GPR. Note: all intervals calculated at a 0.5% copper cut-off.



Fiji – multiple assets, on the backburner for now GPR has 100% interest in four prospect areas in Fiji, three are on the main island Viti Levu, with the

fourth located on Vanua Levu to the northeast. Three of the tenements are current; four have been submitted for renewal. The prospects comprise porphyry and epithermal targets. GPR has a potentialresource of 150koz (non-JORC) at the Faddys prospect at Nabila, which is located on the coast south of Nadi. GPR is focused on its Cambodian asset, with the Fijian asset tenement costing ~$100k/yr to hold. The Fijian projects could attract interest of the majors should they become more comfortable with the sovereign risk. Our contacts suggest this is starting to happen, so GPR’s assets could attract a JVpartner capable of the expensive exploration required to test porphyry and epithermal targets.

Chart 18. GPR’s Fijian assets

Sabeto-Vuda (100%) Sabeto (SPL1361)–Vuda (SPL-1368) is located north of Nadi. Drilling results confirmed the presence of

porphyry style mineralisation with intersections that include a 32m zone grading 0.24g/t gold and 0.12% copper, plus late stage epithermal gold base metal veins grading up to 5.1g/t gold over 0.5m. Results reflect the prospectivity of Sabeto for both gold-rich disseminated porphyry-related gold copper mineralisation and low temperature epithermal vein style gold base metal mineralisation.

Chart 19. Sabeto prospect map Chart 20. Nabila with Faddys gold deposit




Nabila (GPR 100%) The project comprises SPL1216 (Nabila) and SPL1415 (Kavukavu). The area is located on the

southwestern coast of Fiji, and hosts the Faddys gold prospect containing a potential resource ofapproximately 150,000 oz of gold (non JORC compliant) as well as the historic high grade “Mystery”mine workings. Several exploration programmes, including ground geophysics, trenching, mapping andsurface geochemistry were completed in 2012 over the Nabila and Kavukavu tenements.

Chart 21. Map of Rakiraki with drill locations

Chart 22. Caukaudrove geophysical survey


Rakiraki (GPR 50%) The project includes 3 SPLs (SPL1231 (Rakiraki), SPL1373 (Qalau), and SPL1436 (Tabuka). The

tenements are operated via subsidiary company Beta Ltd. The Rakiraki JV Project is prospective forepithermal gold mineralisation, as indicated by results from previous drilling and geological mapping.

A zone of mineralisation was identified in trenching at the Rakiraki JV Project, the zone of veining, whichwas up to 15m wide has a strike length of over 200m produced assays including14.9m @ 1.5g/t gold, including 3m @ 3.75g/t gold and 2m @ 3.36g/t gold, 12.0m @ 0.24g/t gold, including 1m @ 1.36g/t gold,and 15.0m @ 0.28g/t gold, including 2m @ 0.78g/t gold.

Caukaudrove (GPR 100%) Since acquiring the tenement (SPL 1493) in January 2012, Geopacific has identified several areas of

interest from the various geophysical and historic exploration data sets covering the tenement. Twomain targets were identified (Dakuniba and Crossroads prospects) and initial first-pass exploration commenced in 2012. A detailed stream sediment programme was completed covering approximately30sq km of the Cakaudrove project were previous ZTEM geophysical surveys conducted by thecompany have detected deep seated anomalies compatible with porphyry copper-gold mineralisation. A total of 438 locations were sampled over the Dakuniba and Crossroads prospect areas.

Results for the steam sediment sampling programme identified several geochemical anomalies worthyof follow up exploration. Four geochemically different anomalous areas were identified, including a 5km long linear zone of elevated Au, Ag, As, Ba, Mo and Sb, which corresponds to and extends know vein-type gold-silver mineralisation in the Dakuniba vein trend; a 4km x 2km oval shaped zone of anomalous Cu, Zn, Mo, Hg and Ba, which corresponds to a strong ZTEM conductive anomaly; a 1.5km x 1km zone of strong Bi, Te and Mo anomalism, which lies directly above a strong deep seated ZTEM resistive anomaly; and the Crossroads prospect, comprising elevations in Cu and Mo with a surrounding Zn anomaly. Zinc forms a negative anomaly within the Cu-Mo anomaly.



Investment Risks

Country risk: Cambodia is an emerging nation, with no significant mines in operation. There are only ahandful of listed (ASX, TSX, German/UK) exploration companies presently operating, so the legal framework remains largely untested. Representatives from the Cambodian Department of Mines and Energy have recently been in Perth on a fact-finding mission to examine the WA mining legislative framework, which is regarded as best practice and has been the basis for other national frameworks (egin Africa). Fiji has also been regarded as a difficult jurisdiction for mineral exploration, given the politicalhistory, and labour and environmental challenges from locals (eg Vatakoula, Namosi). We understand the majors are now reassessing their views on Fiji’s sovereign risk in a more positive light. The discretionary power of governmental agencies, and legal/judicial frameworks largely untested by foreign entities to deal with are factors to consider.

Commodity, Currency: As an exploration play, GPR may be subject to market sentiment towardscopper and/or gold price. GPR’s expenditures in Cambodia are also in US dollars, so a depreciatingAustralian dollar will increase expenditure commitments.

Operational Risk: GPR’s operations may be affected by various factors, including failure to definedrilling targets, locate or identify mineral deposits; failure to achieve economic grades in exploration andmining; and subsequent operational and technical difficulties encountered in mining; difficulties incommissioning and operating plant and equipment; mechanical failure or plant breakdown;unanticipated metallurgical problems which may affect extraction costs; adverse weather conditions; industrial and environmental accidents; industrial disputes; and unexpected shortages or increases inthe costs of consumables, spare parts, plant and equipment. Maintaining key personnel such as itsIndonesian exploration team is also a risk.

Unexploded ordinance/mines: US forces dropped unexploded ordinance over Cambodia during theVietnam War, while the eastern border also has a proliferation of land mines, clustered due to theproximity of the Ho Chi Min trail. In GPR’s current tenement area, there are no reports of mines or unexploded ordinance, and the area has frequently grazing livestock. Additionally, the areas are clearedby UN mine clearing teams ahead of fieldwork, and parts of the tenements have been cleared on a 40mx 40m spacing without incident.

JV partner: GPR has partnered with a significant Cambodian corporate entity, the Royal Group, forexploration across Cambodia. The Royal Group advises government, and operates 28 business units in Cambodia, including television, mobile phones, as well as JVs with Toll Holdings covering port and railinfrastructure. Should the relationship break down, GPR’s ability to operate in Cambodia could beadversely impacted.

Option Payment: GPR has until January 2015 to make its US$14M option payment to purchase 100% of the Kou Sa project, after which it will own 85%, with the Royal Group owning 15%. If the explorationresults do not support the purchase price, then GPR may walk away from the agreement, relinquishingthe project. Additionally, the current holder of the tenements must keep them in good standing. If they are not kept in good standing, court redress under Cambodian law may be required.

Board and Management

Milan Jerkovic – Chairman

Mr Jerkovic is a qualified geologist with postgraduate qualifications in Mining & Mineral Economics. Hehas over 25 years of experience in the mining industry involving resource evaluation, operations,financing, acquisition, project development and general management. He has previously held positions with WMC, BHP, Nord Pacific, Hargraves, Tritton and Straits Asia. His most recent role was ChiefExecutive Officer of Straits Resources Limited. He is also the founding Chairman of Straits AsiaResources. He is a Fellow of the Australian Institute of Mining and Metallurgy and a member of the Australasian Institute of Company Directors.

Ron Heeks – Managing Director

Mr Heeks has 24 years’ mining industry experience in Asia, Africa, and Australia. He was a foundingpartner in Exploration and Mining Consultants, and has previously held roles with WMC, Newmont andRSG Consulting. Mr Heeks is a Former General Manager – Technical for Straits Asia Indonesian Operations and Chief Technical Officer for Adamus Resources Southern Ashanti Gold Operation. MrHeeks is a member of the Australian Institute of Mining & Metallurgy.

Mark Bojanjac – Non Executive Director

Mr Bojanjac is a Chartered Accountant and holds a Bachelor of Commerce degree. He has over 20years mining industry experience. He was a founding director of Gilt-Edged Mining Limited and wasManaging Director of Batu Mining which developed and financed a Mongolian gold mine. He also co-founded a 4Moz gold project in China (Dragon Mountain Mining). Most recently he was CEO and



Managing Director of Adamus Resources, overseeing its development from an exploration play to a commissioned mine. He has also previously been a Non-Executive Director of Gryphon Minerals, and a Non-Executive Director of Nickelore Limited.

Dr Russell Fountain – Non Executive Director

Dr Fountain has over 42 years’ mining industry experience, having worked for Phelps Dodge ExplorationCorporation, Nord Pacific, and CSR. He holds a PhD in geology, and has worked on Namosi in Fiji. Heis a Fellow of the Australian Institute of Geoscientists. Until August 2013 he was Non Executive Chairman of Finders Resources. He has been involved with the discovery of Granny Smith (Au),Osborne (Cu), Waihi (NZ). His doctorate focused on the Panguna deposit in PNG, and he has alsoworked on the Namosi porphyry copper project in Fiji.

John Lewis – Company Secretary/Chief Financial Officer

Mr Lewis is a Chartered Accountant with 20 years’ post qualification experience working predominantlyin corporate reorganisation, specialising in the mining industry for the last 8 years. Previously Mr Lewis worked in Corporate Advisory at Deloitte. Mr Lewis has worked on a number of mining projects includingrestructuring the business for sale and managing the operations of Croesus Resources NL (now Central Norseman Gold Mines PLC). Mr Lewis was formerly Chief Financial Officer of Nickelore Limited andChief Financial Officer, Director and Company Secretary of Dragon Mountain Gold Limited.

Major Shareholders – Resource Capital Fund holds 32% Shareholder Shares (M) %

Resource Capital Funds 62,383,365 32.21

Laguna Bay Capital Pty Ltd 9,132,417 4.72

HSBC Custody Nominees (Australia) Limited 7,682,995 3.97

Milan & Glenda Janice Jerkovic Super Fund 6,352,942 3.28

Idzan Pty Ltd 4,764,706 2.46

Springtide Capital Pty Ltd 4,669,123 2.41

Jamie John Carter & Kristen Carter 4,308,000 2.22

Anita Cunningham 3,900,000 2.01

Charles Bennett & Sylvia Culham Bass 3,476,364 1.80

JP Morgan Nominees Australia Limited 3,280,871 1.69

Lisa Lewis 2,666,667 1.38

Melissa Narbey 2,666,667 1.38

BNP Paribas Noms Pty Ltd 2,626,088 1.36

Quartz Mountain Mining Pty Ltd 2,515,753 1.30

BLT Offshore Pte Ltd 2,500,000 1.29

Denise Worthington 2,500,000 1.29

Bruce Gordon Morgan 2,017,419 1.04

BLT Offshore Pte Ltd 2,000,000 1.03

Quartz Mountain Mining Pty Ltd 2,000,000 1.03

Ilean Doidge 1,962,785 1.01

Total Top 20 Shareholders 133,406,162 68.88

Total Issue Shares 193,670,521 Source: GPR



This Research has been prepared and issued by BBY Ltd and remains the property of BBY Ltd. No material contained in this Research may be reproduced or distributed, except as allowed by the Copyright Act, without the prior written approval of BBY.

This report has been prepared and issued (in Australia) by BBY Limited (ABN 80 006 707 777/AFS Licence No. 238095) (BBY) and is subject to the disclosures and restrictions set out below.

Analyst Certification:

The research analyst(s) identified on the cover of this report individually certify that in respect of each security or issuer that the research analyst covers that: this report accurately reflects his or her personal views about any and all of the subject issuer(s) or securities; and no part of the research analyst’s compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or views expressed by the research analyst(s) in this report.

Legal Entity Disclosures

Australia: BBY is Participant of the ASX and regulated by ASIC. U.K. BBY is authorised and regulated by the Financial Conduct Authority (FCA) Reference No 146367

Disclosure

Contact with GPR has been made during the preparation of this report for assistance with verification of facts.

BBY and its associates (as defined in Chapter 1 of the Corporations Act 2001), officers, directors, employees and agents, from time to time, may own or have positions in securities of the company(ies) covered in this report and may trade in the securities mentioned either as principal or agent or may be materially interested in such securities.

BBY does and seeks to do business with companies covered in its research reports. As a result, investors should consider this report as only a single factor in making their investment decision.

Disclaimer & Warning

This report may contain general advice or recommendations which, while believed to be accurate at the time of publication, are not appropriate for all persons or accounts. This report does not purport to contain all the information that a prospective investor may require. Before making an investment or trading decision, the recipient must consider Market developments subsequent to the date of this document, and whether the advice is appropriate in light of his or her financial circumstances or seek further advice on its appropriateness or should form his/her own independent view given the person’s investment objectives, financial situation and particular needs regarding any securities or Financial Products mentioned herein. Information in this document has been obtained from sources believed to be true but neither BBY nor its associates make any recommendation or warranty concerning the Financial Products or the accuracy, or reliability or completeness of the information or the performance of the companies referred to in this document. Past performance is not indicative of future performance. This document is not an offer, invitation, solicitation or recommendation with respect to the subscription for, purchase or sale of any Financial Product, and neither this document or anything in it shall form the basis of any contract or commitment. Although every attempt has been made to verify the accuracy of the information contained in the document, liability for any errors or omissions (except any statutory liability which cannot be excluded) is specifically excluded by BBY, its associates, officers, directors, employees and agents. The securities of such company(ies) may not be eligible for sale in all jurisdictions or to all categories of investors.

Country specific disclosures

US Investors: This material is intended for use by “major U.S. institutional investors” (as defined in Rule 15(a)-6 of the U.S. Securities Exchange Act of 1934, (SEA 1934)). Transactions by or on behalf of any “major U.S institutional investors” or “U.S institutional investors” (as defined in Rule 15(a)-6 of the SEA 1934 in any security mentioned in this document may only be effected through BBY and Enclave Capital LLC, together BBY Enclave, U.S. registered 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. BBY Enclave 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.

United Kingdom: This report is issued and distributed by BBY (which is authorised and regulated by the Financial Conduct Authority (FCA) Reference No 146367) only to persons falling within Articles 19 (5), 38, 47 and 49, of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, (all such persons together being referred to as “relevant persons”). Directors, officers and employees of such entities are also included provided their responsibilities regarding those entitles involve engaging in investment activity. Persons who do not have professional experience relating to investments should not rely on this document.

Canada: The investments or investment services referred to in this document are available in Canada only to “Designated Institutions”, as defined by the Securities Act (Ontario).

Analysts’ Compensation: The research analysts responsible for the preparation of this report receive compensation based upon various factors, including the quality and accuracy of the analyst(s) research, client evaluation feedback, independent survey rankings and overall firm revenues, which include revenues from, among other business units and corporate finance.

Other International Investors: International investors outside the US, UK or Canada are encouraged to contact their local regulatory authorities to determine whether any restrictions apply to their ability to purchase this investment.

Recipient Representations/Warranties: By accepting this report, the recipient represents and warrants that he or she is entitled to receive such report in accordance with the restrictions set out in this document and agrees to be bound by the limitations contained herein. Any failure to comply with these limitations may constitute a violation of law.

Meanings of BBY Limited Ratings

Buy – Describes stocks that we expect to provide a total return (price appreciation plus gross yield) of 10% or more within a 12-month period. Underperform – Describes stocks that we expect to provide a total return (price appreciation plus gross yield) of less than 10% within a 12-month period. NR – The investment rating and price target have been temporarily suspended. Such suspensions are in compliance with applicable regulations and/or BBY Limited policies. CS – Coverage Suspended. BBY Limited has suspended coverage of this company. Speculative Buy – Describes stocks we research with a positive bias, whose company fundamentals and financials are being covered, but for which there is insufficient information for BBY Limited to assign a Buy or Underperform rating. Speculative Underperform – Describes stocks we research with a negative bias, whose company fundamentals and financials are being covered, but for which there is insufficient information for BBY Limited to assign a Buy or Underperform rating. Secondary recommendation - Market weight relative to the S&P/ASX 300 under a weighting range of 0-3, with intervals of 0.5 (7 point scale). 1.0 indicates a market weight position in the stock while a weight over 1.0 indicates an overweight position and the current level of analyst conviction. Monitor – Describes stocks whose company fundamentals and financials are being monitored, or for which no financial projections or opinions on the investment merits of the company are provided. It is permitted for the total expected returns to be temporarily outside the prescribed ranges due to extreme market volatility or other justifiable company or industry-specific reasons. Free Float (float / current shares outstanding) *100 – This float figure is the number of shares that are available to the public and is calculated by subtracting the shares held by insiders and those deemed to be stagnant shareholders. Stagnant holders include ESOP's, ESOT's, QUEST's, employee benefit trusts, founding shareholder equity stake plus senior management equity stake, corporations not actively managing money, venture capital companies and shares held by Governments. Terminal Value methodology - BBY's Discounted Cash Flow (DCF) valuation applies a terminal growth rate to the last forecast year's cash flow and discounts the amount using Weighted Average Cost of Capital (WACC). The Terminal Value is tested using ASX-listed company multiples. For resource companies there is no terminal value because cashflows are forecast to the end of mine life.

Valuation Methodology

BBY’s methodology for assigning ratings may include the following: market capitalisation, maturity, growth/value, volatility and expected total return over the next 12 months. The price targets are based on several methodologies, which may include, but are not restricted to, analyses of market risk, growth rate, revenue stream, discounted cash flow (DCF), EBITDA, EPS, cash flow (CF), free cash flow (FCF), EV/EBITDA, P/E, PE/growth, P/CF, P/FCF, premium (discount)/average group EV/EBITDA, premium (discount)/average group P/E, sum of parts, net asset value, discounted dividend model (DDM), franking credits and return on equity (ROE) over the next 12 months.

Technical Analysis

BBY employs technical analysis for forecasting the direction of prices through the study of past market data, primarily price and volume.

geopacific resources ltd...kith meng is the chairman of royal group, an australian-educated khmer...

Documents