While Gunns would not provide an update on the project yesterday, pulp and paper analyst Robert Eastment said he expected the project to proceed soon.

``I would say settlement for funding is very well advanced and we would be expecting an announcement soon,'' Mr Eastment said.

``I expect a mix of financing from Europe and a smaller amount from an Asian pulp and paper company and small amount from Gunns.''

Gunns has previously told the ASX that it expected to reach agreement on key terms with a partner by the end of April.

Investor Financial Planning principal Dane Waldron yesterday said a European bank involvement was a likely source of capital, given banks in the region had dealt with similar pulp mill operations in Scandinavia.

``With access to capital restricted, such a bank or group of banks would wish to limit their exposure, whereby a capital injection or joint venture relationship with an Asian forestry participant to raise the additional capital and or provide additional security to the banking syndicate, also seems to be a logical fit,'' Mr Waldron said.

It is understood that Gunns had to order large components for the mill more than 12 months ago and some equipment has started to arrive.

``An awful lot of equipment is arriving at the pulp mill site,'' one insider said.

Gunns says the mill is being maintained in ready status and would proceed on financial close.

It said the project would create 2000 new jobs during a two-year construction period and 1600 new jobs during operation.

``At a time when many companies are making workers redundant, we are one of the few with a major job creation project being progressed,'' managing director John Gay told the ASX in February.