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Why is the Geopacific (ASX:GPR) share price surging 13% today?

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The Geopacific Resources Ltd (ASX: GPR) share price is surging higher today as a weak US dollar leads to strong gold prices for the Australian miner. 

The Geopacific share price is up 13.2% to 39 cents per share today.

Geopacific’s focus is mineral development and exploration, focusing on gold and copper deposits in Papua New Guinea and Cambodia.

Geopacific’s Papua New Guinea gold mining

The key to Geopacific share price increases is its ability to advance its Woodlark Gold Project in Papua New Guinea.

Last month, it ordered a variety of mining equipment, including ball grinding mills, foundation bolts, heat exchanger plates, condition monitoring systems and special tools, to keep the mine operating.

Geopacific is attempting to maintain the project schedule’s integrity as the grinding circuit is on the critical path for plant construction.

Papua New Guinea’s slow response to the COVID-19 outbreak and the toll the pandemic is taking on the country’s economy has also impacted Geopacific’s operations in the country.

But its measures to keep Woodlark operating, combined with strong gold prices, has seen the Geopacific share price recover in recent weeks.

What Geopacific management is saying

Geopacific CEO Tim Richards said the project would continue to be run under strict budgetary controls:

Despite the current pandemic situation in Papua New Guinea, Geopacific remains confident that the project can be delivered on time and budget.

Pre-construction activities on Woodlark Island are continuing as per plan and with the grinding mills being the longest lead time component of the plant, orders have been placed consistent with the timing in the overall project schedule.

This again represents another important milestone for the Woodlark Gold Project, and demonstrates the commitment of the board and management to delivering this project whilst prudently managing risks around the current global health challenges.

Geopacific share price snapshot

The Geopacific share price is now up more than 18% this week and 28% over the past 12 months, as it recovers from a coronavirus impacted year, despite the increase in gold prices.

Its 12-month high was 71 cents in July 2020 – a 30 cent increase on June 2020 – but it’s since fallen back to pre-pandemic values fairly rapidly, losing more than 20 cents between October and December last year.

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Motley Fool contributor Lucas Radbourne-Pugh has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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