The Lure of Cambodian Gold
The general area on which the Cambodian state is drawn is steeped in a rich history of artisanal gold mining dating back to the 12th century, but no modern commercial extraction has ever taken place. Developing countries almost always have poor infrastructure and, in the case of Cambodia, explorers will often find themselves trying to extract minerals from remote jungles. While this has kept many people away from the area, a daring few currently aim to be the first commercial Cambodian gold producers, and it seems as if they are about to pull it off.
My instinct says that commercial gold production in Cambodia is inevitable, but too many people will be waiting for the first success before investing. This trigger is closer than you might think, however; The Royal Government of Cambodia has publicly accepted that minerals extraction is a key part of its economic future, recently granting the first ever gold mining licence for a project sold to Mesco Gold Ltd. (“Mesco”) by Angkor Gold Corp. (TSXV: ANK) (“Angkor”) for US$1.2m. The Phum Syarung project is expected to be up and running within 18 months.
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Angkor is the first North American publicly-traded mineral explorer in Cambodia and currently holds five exploration licenses covering the company’s five flagship projects in Ratanakiri province: Halo, Okalla West, CW, Okalla and Wild Boar, where exploration results have so far been strong. These exploration activities come at a time of stable GDP growth for Cambodia (see graph), while improvements continue to be made to infrastructure supported by significant domestic and Chinese investment.
Since 2009, Angkor have uncovered extensive evidence of gold, copper, silver, molybdenum, and other minerals across all five of their licenses, and each has a strong case for development. The Andong Meas area, however, is the most prospective of the licences; translating into “Well of Gold”, it has a long history of small scale artisanal mining and features eight distinct gold targets thought to be of high value.
The company sees Andong Meas as its crown jewel since it presents a clear opportunity to raise a significant amount of capital on a 100% owned licence. The 187-square-km property includes the Canada Wall, Wild Boar, and South Creek Prospects, each of which have excellent high-grade gold showings. Whilst only a grab sample, these assayed samples have returned wide-ranging values as high as 20 g/t Au, and drilling has revealed exceptionally high molybdenum, tungsten and silver levels.
On its other licences, Angkor has identified multiple polymetallic porphyry systems and has developed some major partnerships, including the Japan Oil, Gas and Metals National Corporation (JOGMEC); the US$12 billion exploration arm of the Japanese government is Angkor’s partner in a Joint-Exploration Agreement on the company’s Oyadao South license, where one such copper system was unearthed in October 2017 and exploration is advancing rapidly.
Additionally, work at the company’s Koan Nheak property has defined a gold-in-soils anomaly of at least 1,000m x 400m in size, and a floated rock chip sample of a quartz vein assayed 9.94 g/t Au. These results support the presence of a fault related, gold anomalous epithermal vein system on the property, adding yet another attractive potential mine to Angkor’s portfolio.
While the risks and costs of establishing a new mining industry are indeed high, the explicit state approval and continuing high levels of investment are proof enough for me that Cambodia is about to do just that. This confidence becoming increasingly common and can be seen in the recent turnaround in Angkor’s share price, which has increased by around 25% over the last month, its largest monthly gain in three years.