13th June 2013
http://www.miningweekly.com
TORONTO (miningweekly.com) – Breaking away from its troubled past,
modern Cambodia is outward looking, vibrant and developing quickly;
between 2010 and 2012 it recorded an annual growth rate of more than 6%.
However, the country still faces major hurdles, with education,
poverty, and infrastructure all requiring urgent attention.
As part of its development strategy, the Cambodian government is keen
to foster a modern resource sector, with mining to play a critical role.
It has carefully noted the positive economic impact that the Sepon
openpit copper and gold mine has had in neighbouring Laos, TSX-V-listed
project developer Angkor Gold CEO Mike Weeks told Mining Weekly Online in a recent interview.
“The Cambodian government is rapidly getting up to speed and has some
excellent mining legislation in place, much of it based on Australian
mining law,” he added.
The potential for first movers into the country is enormous. “Everyone
knows there’s lots of mineralisation in Cambodia, but modern exploration
has yet to have been really implemented. Before the mid-2000s, most of
Cambodia’s mining was undertaken by artisan producers,” Weeks said.
Angkor is an exploration junior that holds five land tenements in
eastern Cambodia for a total of just over 1 100 km2. It uses a project
generator economic model, exploring prospects to attract a buyer. Angkor
then seeks to retain a stake, either as a net smelter return (NSR)
royalty or by other means.
In January it also completed its first outright sale. Privately-owned
All Solutions (Cambodia), which works in partnership with Chinese gold
miner Canxiang Mining, acquired a 78-km2 subsection of Angkor’s Oyadao tenement, adjacent to Vietnam, for $2.4-million.
The remaining 222 km2 Oyadao territory contains the Phum
Syarung prospect, which the company sold to Mesco Gold, a subsidiary of
India-based Mesco Steel, in January for $1.2-million and a 10% NSR. The
first tranche payment of $700 000 was made to Angkor on May 2.
Mesco Gold was quick to start a drill programme and unveiled four drill
results on May 23, including hole PS13-020D, which returned an
intersect of 8.11 g/t gold, 6.49 g/t silver, 0.12% copper, 1.04% lead
and 0.47% zinc from 89.25 m to 95.55 m.
Progress at Phum Syarung will be comparatively swift, according to
Weeks. “Mesco isn’t required to obtain a [National Instrument] NI 43-101
reserve in order to start mining, so there won’t be 100 holes or so
drilled; instead, Mesco will drill about ten or 15 holes,” he said.
“It’s likely Mesco will achieve an early-2015 start [Phum Syarung],” Angkor Gold’s VP for corporate development, Fletcher Morgan, said in a separate interview. “Also, I believe the environmental impact assessment is already underway.”
OTHER PROSPECTS
Angkor’s other focal points are its Otray and Okalla prospects. The
company reported encouraging early-stage exploratory results at Otray on
May 29. “[The results] are strongly suggestive of a high-sulphidation
zone in a gold/copper epithermal environment,” the company said.
“With the visible gold we saw in the soil samples and with how
everything else lines up … the indications are that there’s something
massive there,” Weeks said. “We think this will be a company maker.”
Alongside usual early-stage exploration methods, samples were taken from around 11 400 termite mounds over a 15 km2
area and analysed. "We’re confident the samples we're getting from the
termite mounds are representative of more traditional techniques,”
Morgan said.
"These little critters burrow down to the water table, even if it means
going through a basalt layer or whatever else. They deposit material
onto the mound when returning to the surface,” he explained. “They’re
effective little miners, sometimes burrowing down to as much as 30- or
40-metres deep.”
Angkor will continue field work at Otray until July, when the rainy
season starts. It will then compile and further analyse the results
obtained, considering the options for potential drilling.
Meanwhile, at Okalla, a gold/copper/molybdenum prospect, Angkor has
already drilled 33 holes for over 5 400 m. The company is hoping to
pinpoint targets of greater opportunity during 2013.
“Last year, we did some drilling on the property but the results were
lower grade on both the copper and gold sides. This told us that we were
in a root zone but not the pay zone,” Morgan said. “Eugenio Cayo, a porphyry specialist is now working on site … he is identifying our targets.”
“Our drill programme at Okalla will start soon,” he added. “We’ll drill
through the rainy season, which is feasible, albeit somewhat more
difficult than during the dry season.”
The company’s other Cambodian prospects will also command attention.
“We have quite a few other systems similar to Phum Syarung, so we’re
blessed with several other prospects,” Weeks said.
WORKING MODEL
Meanwhile, community and social relations are critically important for
Angkor, according to Weeks. “A big part of what we do is based on social
responsibility,” he said. “We follow World Bank guidelines, obtaining
local consent before we go into an area.”
“Our relationship is about creating tangible work, while also helping
out with medical supplies and assisting the local educational system,”
he added.
“We’ve established a full-time social responsibility group that’s
completely self-funded, which means our investors’ money goes straight
into exploration; I don't think there are many other companies around
doing that,” Weeks said.
For financing, the company has money in reserve and, by adhering to its
project generator model, believes it has a greater stability within
current market conditions. “By being a project generator we avoid having
to return to the market, attempting to raise money at $0.05-0.10 a
share as many other juniors are forced to do,” Weeks said.
“It’s all about our overall goal: showing the potential of a site that
enables us to attract an interested buyer – the larger the better, of
course – and to reach an agreement,” Morgan added.
However, Otray might be beyond the company’s usual parameters.
“Thinking about Otray right now; well, let’s just say I don't know if it
would be up for sale,” Weeks quipped. “Still, if one of the big players
really believed in Otray, we’d certainly be happy to see what comes
through the pipeline.”
Edited by: Henry Lazenby
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