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Council of Ministers greenlights Australian firm’s gold mine

Gerald Flynn / Khmer Times Share:
People driving a motorcycle near a gold mine in Mondulkiri province. KT/Mai Vireak

Tuesday’s approval from the Council of Ministers has given Renaissance Minerals, a subsidiary of Australia-listed Emerald Resources, the go-ahead to commence mining for gold next year, following the signing of a Minerals Investment Agreement (MIA).

The Okvau Gold Project in Mondulkiri province is set to generate 106,000 gold ounces – just over 3 tonnes – of gold per year, with the licence granted to Renaissance Minerals last year giving the company a 15-year lease of the land, with the potential for two decade-long renewals.

Geologist and Managing Director of Emerald Resources Morgan Hart notes: “The approval of a direct agreement with the Cambodian government for the development of the Okvau Gold Project is a significant milestone for Emerald and the people of Cambodia because it is the first time this has been implemented for a large scale mining project.”

This comes following a review of the 2017 feasibility study conducted by Emerald Resources. The mine exploration company announced they expect to see an even greater value in the Okvau Gold Project.

Based on the prevailing gold price of $1,450 per ounce, the Okvau Gold Project’s net present value has improved significantly to $337 million before tax and, following the newly agreed 3 percent royalties on sales and 25 percent income tax, the project stands to be valued at $238 million after tax.

The company has also secured an exemption from import tax and duties on any equipment needed to complete the project until the end of 2022, with Emerald estimating their development costs to remain at the previously forecast $91 million, allowing for a further $7 million in establishment costs and pre-production mining costs.

Reporting this improvement, Emerald explain the changes because of an increased spot price of gold and a 0.5 percent increase in royalties paid to the government in exchange for a 5 percent decrease in income tax for the first five years of the Okvau Gold Project.

“With the MIA now approved and visibility on these updated Project economics, the board has committed to developing the Okvau Gold Project subject to finalising funding requirements,” said Mr Hart.

Yos Monirath, director-general of the Ministry of Mines and Energy’s General Department of Mineral Resources, told the Khmer Times last week that Renaissance Minerals was currently constructing the infrastructure necessary to support the Okvau Gold Project in Mondulkiri and that he expects to see mining commence early next year, barring adverse weather conditions.

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