Cambodia began issuing new industrial mining licenses last year after adopting new mining legislation.
Based on Western Australian mining codes and international best practises, the regulatory framework offers mining companies a more clearly defined licensing application process, a favorable 30-percent tax and a 3-percent royalty rate on precious metals.
The landmark first mining license was granted to India’s Mesco Gold for the operation of its Phum Syarung gold mine in Ratanakiri province. Mesco Gold Chairman JK Singh said at the time that the mining license was the final step in putting the mine into production and commented that it heralded “a new stage in the evolution of the mining industry” in Cambodia.
Gold mining in Cambodia: Beyond Mesco
Mesco purchased Phum Syarung in 2013 from Canada-based exploration firm Angkor Gold (TSXV:ANK), which retains a net smelter return on a sliding scale of 2 to 7.5 percent. Mesco also agreed to pay Angkor $500,000 upon receipt of a mining license for the mine, and is currently paying that off in instalments; the first payment was made in March of this year.
Angkor itself holds five exploration licenses in Cambodia, and they cover its five flagship projects in Ratanakiri province: Halo, Okalla West, CW, Okalla and Wild Boar. The company currently has a joint exploration agreement with Japan Oil, Gas and Metals National Corporation (JOGMEC) for its wholly owned Oyadao South license. The license includes the Halo project, and the Angkor-JOGMEC team began a drill program there last month.
Angkor also recently started a drill program at Okalla West in cooperation with partner Blue River Resources (TSXV:BXR). The two companies entered into a partnership agreement last June to jointly explore the Angkor-owned Banlung license, which includes both Okalla and Okalla West. The agreement gives Blue River the right to earn a 50-percent interest in the license by spending $3.5 million on exploration over a four-year period.
While Angkor is the only North American publicly traded mining company currently operating in Cambodia, several Australian explorers also have projects in the Southeast Asian country. GeoPacific Resources (ASX:GPR) is exploring for copper and gold at the Kou Sa project in Phreah Vihear province. The company has completed an initial resource estimate for Kou Sa, but in 2017 has been focusing on developing its Woodlark gold project in Papa New Guinea.
Emerald Resources (ASX:EMR) gained ownership of the Okvau and O’Chhung licenses when it acquired Renaissance Minerals. The licenses span 400 square kilometers in a prospective intrusive-related gold district and include the 1.13-million-ounce Okvau gold deposit. The company is focused on Okvau, and recently completed a definitive feasibility study for the project.
Gold mining in Cambodia: The future
Cambodia has maintained more than two decades of strong economic growth. In 2016, the Southeast Asian country achieved 7-percent growth in GDP, making it one of the fastest-growing nations in the region. That growth is expected to remain strong throughout 2017 alongside falling poverty rates, according to the World Bank.
In June 2016, the World Bank’s International Development Association made a commitment to provide $130 million in support of four projects, including road improvement and healthcare. The World Bank’s International Finance Corporation is also increasing its support for the further development of Cambodia’s finance, trade and infrastructure sectors, meaning that the country could become more attractive for additional mining and exploration companies in the future.
This is an updated version of an article originally published by the Investing News Network in 2012.
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Securities Disclosure: I, Sivansh Padhy, do not hold equity interests in any of the companies mentioned in this article.
Editorial Disclosure: Angkor Gold is a client of the Investing News Network. This article is not paid-for content.