Geopacific Resources : Annual Financial Statements - 31 December 2021

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GEOPACIFIC RESOURCES LIMITED

ABN 57 003 208 393 and controlled entities

ASX code: GPR

Financial Statements

for the year ended 31 December 2021

CONTENTS
Corporate Directory	2
Review of Operations	3
Ore Reserves and Mineral Resources	12
Directors' Report	14
Remuneration Report	23
Auditor's Independence Declaration	42
Independent Auditor's Report	43
Directors' Declaration	50
Consolidated Statement of Profit or Loss and Other Comprehensive Income	51
Consolidated Statement of Financial Position	53
Consolidated Statement of Changes in Equity	54
Consolidated Statement of Cash Flows	55
Notes to the Financial Statements	56
Shareholder Information	108
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CORPORATE DIRECTORY

Geopacific Resources Limited

Public listed Company (ASX Code: GPR) incorporated in New South Wales in 1986

Australian Business Number (ABN)

57 003 208 393

Non-Executive Chairman Non-Executive Director Non-Executive Director Non-Executive Director

Chief Financial Officer & Company Secretary

REVIEW OF OPERATIONS

REVIEW OF OPERATIONS

The Woodlark Gold Project (the Project) is a potentially high margin gold deposit, located on Woodlark Island in Papua New Guinea (PNG).

During the 2021 reporting period, activities at the Project focussed on infrastructure development and the ongoing community relocation program. Key long lead items such as the SAG and ball mills were ordered and engineering and design work, principally for the processing facilities was progressed.

In November 2021, the Company announced that earthwork activities associated with the development of the Project had been delayed due to a combination of inclement weather, deteriorating ground conditions and the impact of COVID-19 limiting the availability of site access and overall worker productivity rates. In addition, a decision was taken to reassess the original wharf design and evaluate a potential upgrade of the existing wharf facility to reduce cost and construction complexity while providing greater opportunities for local community participation in the Project. Delays were also experienced in issuance of the construction tender for the offshore tailings line and the local community relocation program. Due to the impact of the delays, the Company made the decision to defer all non-essential activities at the Project.

As part of the deferral of non-essential work, the Company commenced a critical path analysis to minimise the impact of the delays on the overall project schedule as well as launching a review of the schedule and cost estimate to determine the impact on the development budget.

On 15 December 2021, the Company requested a voluntary suspension of trading in its ordinary shares listed on the ASX. This request arose after preliminary results from the review initiated in November 2021 indicated that there was likely to be a material increase in the capital cost for development of the Project. The Company continued to undertake the detailed work program to define and quantify the extent of the increase which extended into the 2022 financial year.

Post financial year end, it was determined from the ongoing review that changes were required to preserve the Company's financial and asset position. In view of the ongoing delays in the project schedule and the consequent implications for capital cost escalation, a range of steps were taken, including suspending all detailed engineering and civil works at the Project pending the conclusion of the review of the Company's strategic options and instigating a redundancy program across the organisation.

Whilst development of the Project was suspended early in the 2022 financial year, Geopacific remains committed to engagement with the local communities on Woodlark Island and activities associated with the community relocation program are continuing. Geopacific also continues to support other community programs as on the island, including education facilities and health care services.

Geopacific remains focussed on realising the full potential of the Project and has commenced a drilling program aimed at pit extension and step-out targets across Woodlark Island.

REVIEW OF OPERATIONS

Exploration

During the year, the Company commenced a 20,000m grade control and near pit drilling campaign, representing the first RC drilling activity conducted on Woodlark Island since 2018. Drilling contractor, Quest Exploration Drilling (QED), mobilised on site in September 2021 and to date have drilled approximately 80 holes. The drilling campaign has been undertaken to further define and substantiate the upside optionality that resides within the existing pit shells (via grade control drilling) and across the broader mining and exploration leases on Woodlark Island.

Since the commencement of the program, the Company has received assays from 34 grade control holes with a substantial number reporting significant high-grade intercepts (all within 60 metres of surface), supporting our view that there is considerable upside potential within the existing pit shells. Key assay results from Kulumadau include:

• • 080KUL146 with 58 metres at 4.67g/t Au (271 gram metres), from surface;

• • 080KUL160 with 39 metres at 5.33g/t Au (208 gram metres), from 21 metres;

• • 080KUL145 with 37 metres at 5.59g/t Au (207 gram metres) from 8 metres;

• • 080KUL175 with 26 metres at 7.38g/t Au (192 gram metres) from 34 metres and 9 metres at 20.2g/t Au (182 gram metres), from 20 metres; and

• • 080KUL167 with 9 metres at 15.5g/t Au (140 gram metres), from surface.

A larger drill rig was mobilised to site in January 2022 to facilitate the drilling of deeper holes to test down dip and extension targets associated with the current pits.

The resource extension drilling results to date from Kulumadau and Busai reinforce the potential for pit extension possibilities, with all three planned pits at the Project open along strike and at depth. To date a total of 12 resource extension holes have been assayed at Busai and Kulumadau with highly encouraging results, all within 100 metres of surface. Key results from the resource drilling campaign include:

Busai:

• • BSRC21140 with 14 metres at 5.01g/t Au, from 73 metres;

• • BSRC21141 with 8 metres at 2.14g/t Au, from 19 metres; and

• • BSRC21136 with 11 metres at 1.99g/t Au, from 16 metres.

Kulumadau:

• • KURC21027 with 17 metres at 0.97g/t Au, from 22 metres; and

• • KURC21024 with 12 metres at 0.76g/t Au, from 65 metres.

A further 25 grade control holes and 5 resource extension holes from the Kulumadau deposit have been completed with samples in the laboratory awaiting assay1.

Exploration drilling to the north and east of the current Kulumadau resource commenced in February 2022 and is ongoing. There are 14 holes from this program awaiting assay1.

1 As at 17 March 2022