PHNOM PENH (Khmer Times) – Foreign mining companies are intensifying their gold prospecting operations in Cambodia following promising exploratory drilling results, with one firm expected to begin the Kingdom’s first commercial gold production within a year.
In a statement released Thursday, Australian firm Renaissance Minerals Ltd announced further positive results from its most recent diamond drilling program at the company’s fully-owned Okvau deposit in Mondulkiri province. Independent analysis has estimated the gold resource at the deposit at 1.2 million ounces, with a mineralized vein system lying close to the surface and amenable to open-pit mining.
Renaissance resumed exploratory drilling at the deposit after raising $5.4 million in an equity placement earlier this year. Results from drilling designed to test “up-dip” extensions outside the current resource envelope have yielded promising results, the company said in a disclosure to the ASX.
“The results along the western margin of the Okvau deposit demonstrate the potential to define additional mineralization within the scoping study pit shell in areas that are currently defined as waste material,” Renaissance’s managing director Justin Tremain said. “Additional mineralization such as this will further enhance the robust development economics of the Okvau deposit.”
He said the company was also looking forward to “further results from drilling undertaken on other nearby, previously untested, exploration targets.”
Ready to Draw First Gold
That Cambodia has gold is undisputed. The Kingdom’s long history of artisanal gold mining bears testament to the presence of auriferous rock, particularly in the north and east of the country. Exploration efforts by international mining firms have shown economical deposits in a number of locations, but the country currently has no commercial-scale production.
Canadian-owned Angkor Gold Corp. earlier this month received Cambodian government approval to conduct an environmental impact assessment (EIA) on a 12 square kilometer area in its Oyadao South tenement in Ratanakkiri province along the Vietnamese border. The EIA is a crucial step toward receiving a mining permit that would take the tenement’s Phum Syarung gold mine into production.
The underground mine, acquired by Indian-owned Mesco Gold Ltd. for $1.2 million last year, is set to become the first royalty-generating gold mine in Cambodia. Production could begin by the end of 2015.
TSX-listed Angkor Gold will receive a share of the profits from the offloaded mine, which is expected to produce about 10,000 ounces of gold a year once production begins. As part of the sale agreement to Mesco, the firm negotiated a net smelter royalty agreement that at current world gold prices would see it receive 7 percent of any gold extracted.
“They (Mesco) believe, like we do, that it’s a big resource,” Angkor Gold CEO Mike Weeks told The Northern Miner magazine in May. “At the very least the resource is big enough for them and us to be profitable, and they think it’s a lot bigger. They’ve found three veins down to about 100 meters and believe there is a lot more below that.”
Angkor Gold has seven exploration licenses in Cambodia covering 1,448 square kilometers. In a statement released this week it announced plans to commence test drilling at its China Wall prospect on the Andong Meas tenement in Ratanakkiri province.
“Our team has put a lot of time and effort into the selection of this target,” said Adrian Mann, the company’s Vice President of Exploration, “and we are confident that this drilling will substantiate our team’s work.”
A number of other mineral exploration companies are active in the search for gold, including Australia’s Southern Gold. The Adelaide-based public mining firm holds seven exploration licenses for gold and base metals covering over 1,500 km square kilometers in northeast Cambodia.
In 2009, Southern Gold reported finding “significant” gold mineralization during exploratory drilling at its Anchor Prospect in southern Kratie province. The firm has since claimed to have found evidence of gold and base metals on another tenement in Mondulkiri province, though production could be several years away.
Australian mining firm Geopacific Resources Ltd is reporting similar positive results at its Kou Sa copper-gold prospect in Preah Vihear province. Test drilling results have shown “bonanza-grade” gold and copper mineralization at several sites.
“They’re getting some spectacular results,” Richard Stanger, president of the Cambodian Association for Mining and Exploration Companies (CAMEC), told Khmer Times in September. “It could be quite exciting for Cambodia.”
Eager to pursue these prospects, ASX-listed Geopacific opened offers for a $3 million rights issue on Thursday. The public offering is part of a $5.5 million funding package that includes a $2.5 million private placement by institutional investors.
The net proceeds of the funding package will be used by the company to “aggressively pursue” exploration at its Kou Sa project.