Automated Market-Making: A Lifeline for Great Pacific Gold's Liquidity Challenges?

The junior mining sector is rife with volatility, and for companies like Great Pacific Gold Corp. (TSXV: GPAC), maintaining liquidity often becomes a survival imperative. On April 30, 2025, Great Pacific announced an agreement with ICP Securities Inc. (ICP) for automated market-making services—a move that could stabilize its trading liquidity but also underscores the company’s precarious financial state. Let’s dissect the terms, implications, and risks.

The Partnership: Structure and Compliance

The agreement with ICP, a firm specializing in algorithm-driven liquidity solutions, is a four-month trial with automatic monthly renewals unless either party terminates it with 30 days’ notice.

. The fixed monthly fee of C$7,500 plus taxes ensures no performance-based incentives, adhering to TSX policies that prohibit compensation tied to market outcomes. ICP’s proprietary ICP Premium™ algorithm aims to correct “temporary supply and demand imbalances,” a common challenge for thinly traded junior miners.

Crucially, ICP operates as an arm’s-length party, with no pre-existing equity stake in Great Pacific. This structure avoids conflicts of interest, aligning with TSX guidelines to prevent market manipulation. The partnership also excludes third-party funding, ensuring transparency—a critical factor for investors wary of opaque arrangements.

Great Pacific’s Financial Fragility

The need for this service stems from Great Pacific’s dire financial health. As of 2025:
- Zero revenue (trailing twelve months), with net losses of CA$18.17 million.
- A negative P/E ratio (-1.8x) and a market cap of CA$33.18 million, placing it mid-tier among peers like Velocity Minerals (CA$35.5m) and Japan Gold (CA$39.0m).
- A cash runway of less than one year, relying on recent funding injections, including CA$5.05 million in late 2024 and an anticipated CA$5 million in 2025.

The stock has plummeted 72.6% over the year, underperforming the Canadian Metals and Mining sector (+24.4%) and the broader market (+12.3%). Shareholder dilution and insider selling (e.g., CA$356k by the CEO in 2023) further erode confidence.

Market Context: A High-Risk, High-Reward Play

Great Pacific’s projects in Papua New Guinea (e.g., Kesar Creek, Wild Dog) and Australia (Lauriston Gold) hold promise. Recent assays include 5 meters at 166.35 g/t gold and a 4-meter interval at 413 g/t gold, signaling high-grade potential. However, transitioning exploration into production requires sustained funding—a hurdle given its cash constraints.

The partnership with ICP could alleviate liquidity pressures, enabling the company to focus on drilling programs (e.g., 5,000 meters at Kesar Creek) and strategic divestitures (e.g., the April 2025 sale of Reedy Creek to Zincore for CA$35.5m–CA$39m).

Risks and Considerations

1. Market Volatility: GPAC’s stock has seen weekly fluctuations of 16.6%, far exceeding the Canadian market average (9.6%). This instability persists despite the market-making agreement.
2. Execution Risk: While ICP’s algorithm aims to stabilize liquidity, success depends on sustained investor interest in junior miners—a volatile sector.
3. Competitive Landscape: Peers like Velocity Minerals and Japan Gold boast stronger balance sheets, potentially outpacing Great Pacific in capital-intensive exploration.

Conclusion: A Necessary but Unproven Lifeline

The ICP partnership is a prudent, short-term solution to Great Pacific’s liquidity crisis, leveraging technology to reduce trading friction. However, its long-term viability hinges on two critical factors:
1. Exploration Success: High-grade assays must translate into mineable reserves, requiring substantial capital expenditure.
2. Fundraising: The CA$5 million expected in 2025 must be secured, and further dilution avoided to retain investor trust.

While the automated market-making service buys time, Great Pacific’s survival ultimately depends on transforming exploration potential into revenue—a daunting task in a sector where 90% of juniors never achieve commercial production. Investors should monitor cash runway metrics and project milestones closely, while recognizing the steep odds against this high-risk bet.

In sum, the ICP agreement is a tactical move, but without a revenue breakthrough, Great Pacific’s story remains one of speculation over substance.