Angkor Gold CEO Stephen Burega believes Cambodia has the potential to be a mining leader due to its excellent geology and stable political environment.
Angkor Gold (TSXV:ANK,OTC Pink:ANKOF) CEO Stephen Burega believes Cambodia has the potential to be a mining leader due to its excellent geology and stable political environment. Burega believes that the prime minister of the Kingdom of Cambodia, Hun Sen, “is looking to better the country and economy, which is creating a very stable scenario.”
In the interview below, Burega discusses the company’s announcement in February 2019 regarding its interest in entering the oil and gas industry in Cambodia, where it has “applied for and [is] in final negotiations with the government for an oil block.”
He also provides an overview of the company’s partnership with the Japan Oil and Gas Exploration Corporation (JOGMEC) and the work it has completed on Angkor’s Oyadao South copper porphyry project.
Below is a transcript of our interview with Angkor Gold CEO Stephen Burega. It has been edited for clarity and brevity.
Investing News Network: Why is Cambodia a good opportunity for investors?
Angkor Gold CEO Stephen Burega: Cambodia got lost in the mix due to its tragic history, and there’s a hangover associated with that. As a result, not a lot of work has been done in Cambodia. When we arrived in 2007 and 2008, there were no major players, but all the indications of excellent geology were there. Within the first two years, we identified our first copper porphyry and potential epithermal gold targets. Since then, we’ve been working hard to understand the geology.
INN: What have the results been like so far?
SB: We have a massive area that covers five licenses. We started with approximately 2,000 square kilometers, and we’re down to 1,000 square kilometers. We’re developing four of those projects with partners in a prospect generator model. We do the initial work before bringing in a partner to move the project forward with their funding and knowledge.
INN: How do your partners feel about Cambodia as a mining jurisdiction?
SB: The geology in Cambodia speaks for itself. We have received some good results which gets people to the table. What keeps them there is how dramatically Cambodia has grown over the last 30 years since its independence.
They have structured their mining code wisely. They essentially looked at Western Australia’s mining code and adopted it, and they made a wise choice of implementing a flat 30 percent profit tax. They looked at their neighbors and recognized the pitfalls others had fallen into in countries like Thailand, Vietnam and Laos, addressing issues that could potentially pop up. So there are no major impediments, for example, there is no mandated ownership in Cambodia, which means we own 100 percent of our licenses. There’s also a very reasonable 3 percent net smelter return for precious metals.
The banking system in place is exceptional, and Canada has a foothold in it which enables unfettered cash flow in and out of the country. All the necessary infrastructure for a growing mining industry is also in place. When we first arrived in Cambodia, it took us two days to drive from Phnom Penh to our properties. All of the direct foreign investment is building new roads and infrastructure, cutting our drive down to seven hours.
This has all happened in a 10 year window. Cambodia is growing at breakneck speeds and has an average annual GDP growth of about 7 percent. Foreign investment in the country is second to none, so as far as Southeast Asia is concerned, it’s one of the top locations for neighbors such as Japanese and Chinese companies that are looking for base metals, precious metals and oil and gas. I’m confident that Cambodia will have all three sectors here and we’re hoping to be involved.
INN: What gives you confidence that Cambodia will remain a stable jurisdiction?
SB: For the past 30 years, it has been quite stable, but Cambodia is still a young, growing country that will run into some bumps along the way. The country’s current political regime is strong and stable, but depending on who you talk to, there are pros and cons. In our opinion, the prime minister is looking to better the country and economy, which is creating a very stable scenario.
From a legislative perspective, the mining code is strong enough for us to be confident that there will be a direct line from point A to B to C. When we brought our partner JOGMEC online, it lent credence to that fact. They are a massive company looking at exploration around the world and they are working with us in Cambodia. I think that’s a vote of confidence for the future.
INN: What is the relationship between Angkor Gold and JOGMEC?
SB: JOGMEC explores for various commodities. Our current partnership with them is focused on base metals. We’re working with them on the Oyadao South copper porphyry project. It’s a US$3 million, three year commitment. We’re the operators, and they provide funding and knowledge. Our maiden 400 meter drill hole intersected mineralization 99 meters from the surface grading 0.24 percent copper and 2.26 grams per tonne silver, which wasn’t bad but we’re looking to do better. JOGMEC also has an oil and gas arm, but we’re not connected with them at this point.
INN: Is there potential for oil on your property?
SB: Not on our property, but we’ve applied for and are in final negotiations with the government for an oil block. Cambodia has great geology that supports hard rock and oil and gas mining. In Southeast Asia, Thailand and Vietnam have offshore drilling in the Khorat Basin and Cuu Long Basin respectively. Both areas border Cambodia and point to oil and gas opportunities.
It’s the same for hard rock mining. Numerous gold and copper operations surround Cambodia, but there’s nothing in-country. As we all know, geology knows no borders, and there’s no reason why we wouldn’t see a continuation of these trends into Cambodia. We believe that Northeastern Cambodia is great for hard rock and we’re looking at possible oil and gas extension basins that dip down into Cambodia.
Cambodia has a population of 15 million people, and they import almost everything that they use. The idea of oil and gas production in the country is a top priority for the Cambodian government. This summer Singapore-based KrisEnergy (SGX:SK3) will be bringing Cambodia’s first offshore operation online and is building a $1.6 billion refinery to support their operations.
We’re seeing bits and pieces of infrastructure coming online. We’ve been looking at the oil and gas industry for almost six years, waiting for the right opportunity and that opportunity is now. Our management team has significant experience in oil and gas as well.
INN: Who makes up your management team?
SB: I’ve been working in the natural resource sector for 15 years, mostly in Africa, and have worked on a variety of resource plays such as agriculture, hard rock and offshore oil and gas. Our president, John-Paul Dau, has lived in Cambodia for 12 years and has worked in the natural resource sector for 15 years as well. He’s our eyes and ears on the ground in Cambodia. His knowledge and expertise in government relations are next to none.
Our Executive Chairman and Founder Mike Weeks is the heart behind the company. In 2007, he flew to Cambodia to check on our assets and fell in love with the country. He and his wife have spent time in the country, working with our local staff and on social development programs, while also guiding Angkor through the highs and lows.
We also have two vice presidents of exploration with exceptional experience in the oil and gas and hard rock industries. Lorne Rosenthal will be in charge of our oil and gas assets while Dennis Ouellette will focus on our hard rock assets.
We also proudly hire as many local staff as we possibly can, and we have between 20 to 40 Khmer people on staff at any given time. Many of our staff members, with the help of our training program, have gone on to work in high-level government roles.
We work closely with the Ministry of Energy and Mines and have helped them adopt new protocols.
INN: What’s next for Angkor Gold and how does that fit into the company’s long-term goals?
SB: There will be a focus on oil and gas. We’ll be finalizing our negotiations with the government, acquiring our first oil block. We’ll conduct seismic surveys to generate targets, and we’ll be fundraising as well.
Out of our five hard rock assets, four are funded through our partners. We have programs ongoing with JOGMEC, Canada-based Hommy 5 Resources and Australia-based Emerald Resources (ASX:EMR). They’re all exploration-stage assets that we hope to develop resources for. Drill programs are ongoing, and we hope to complete them before the rainy season hits in late June.
On the oil and gas front, what we’re going to do is finalize negotiations with the PSA and the government. We want to acquire our first oil block and move forward with seismic and look at target identification. Of course, fundraising will follow.
INN: It must be an exciting time to be in Cambodia as it continues to grow and develop rapidly.
SB: It certainly is. We’re often referred to as the gold standard by the government because we do the right thing and follow through on our promises. We work with the locals, who provide us with access to remote rural areas and opportunities to speak with the government when necessary. We’re also doing our best to create value for shareholders. I want to show them that it’s the right time to enter into oil and gas. We’re going to do everything we can to give them a win.
This interview is sponsored by Angkor Gold (TSXV:ANK,OTC Pink:ANKOF). This interview provides information which was sourced by the Investing News Network (INN) and approved by Angkor Gold in order to help investors learn more about the company. Angkor Gold is a client of INN. The company’s campaign fees pay for INN to create and update this interview.
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