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Angkor bullish on 2016 prospects

John-Paul Dau
John-Paul Dau, country manager at Angkor Gold Corp, talked to the Post from the companies head office in Phnom Penh yesterday. Kimberley McCosker

Angkor bullish on 2016 prospects

Last week, mining firm Angkor Gold announced that Mesco Gold, an Indian company which acquired the extraction rights to one of Angkor’s fields in Ratanakkiri’s O’Yadav district, would begin extracting in 2016 once it acquired a mining license. The Post’s Charles Rollet sat down with John-Paul Dau, country manager at Angkor Gold, to discuss the future of mineral extraction in Cambodia, which currently has no licensed mining operation running.

Tell us about Mesco’s project and what it means for Cambodia.

It is going to be the first royalty-paying, tax-paying, fully-approved by the Ministry of Mines and Energy gold mine in Cambodia. So it’s a significant milestone, both for Cambodia and for Angkor Gold.

What it does for Cambodia is that shows that mining can legitimately happen here. There’s a lot of artisanal mining around the country, there’s a lot of what is basically illegal mining. But the Ministry is being particularly aggressively trying to give the industry a better name for itself.

Why isn’t Angkor Gold exploiting it itself?

We’re an exploration company, not a mining company. We don’t have the resources behind us to start a mine. The only thing that we stay operational in is corporate social responsibility, community development and we try to facilitate as much of the process along toward the mining license with the government as we possibly can.

Mesco previously said extraction would begin this year, but that hasn’t happened. How confident are you that Mesco will begin extracting in 2016 as was announced last week?

I think the prediction, and this is where there’s been a little bit of the confusion, has been for 2015 to have the project fully approved to move forward. 2016 is going to be the year where you’ll see extraction happening.

But in 2016, the big question for everyone is when is Angkor Gold’s royalty, and when is the government’s royalty going to start? When are those royalties going to start to get paid?

How did Mesco begin working with Angkor Gold?

They have significant mining interest in India. Since we were introduced to them in 2013, our CEO went to India and did a tour of all their facilities there and that was the beginning of our relationship. These guys are looking to expand globally and they want to spend their money in a place other than just India.

The villagers in the community are currently mulling the proposal for the mine’s development. What is Mesco’s say in this?

[Mesco and Angkor] have an operational agreement in place and because we actually do get an ongoing royalty, we have an obligation to the community. It doesn’t mean that Mesco’s not doing anything. These guys have to have a presence in meetings; they have to participate in some of the events that we plan.

Mesco has big water treatment programs planned as well. This is all part of the environmental social impact assessment that will be done there probably sometime in October.

As an outsider looking in, it seems like many of these mining operations stall for long periods of time without getting much done.

Cambodia is a unique country from that perspective because of a slightly shaky history. There are advantages to that because I think there’s less low hanging fruit here, stuff that hasn’t been looked at.

But the downside is that you don’t know much before you get off that plane and arrive here. You got a few geological maps, but they’re not very detailed.

It’s a timely, costly, and expensive process. If I walked through the mines department in Canada, they’ve got a database with aeromagnetics, a lot of LIDAR [laser] data, all kinds of things. They’ve got feasibility maps from someone’s who’s typically looked at the ground before.

We’re one of the very few companies going after a project [in Cambodia] continuing to drill, continuing to move forward. Ninety-nine per cent of junior exploration companies have shut down.

What are some of the other challenges of setting up a mine in a country without a single licensed extractive mining operation?

In new areas, sometimes there’s a dispute over who owns what. We’ve talked to the ministry about this, and we want to say that if we can’t find out who owns this land, it makes it very difficult for us to develop the reserve potential energy for it. We need to know who has the title or the deed, the soft title or the communal title.

There’s the Ministry of Land Management, there’s the Ministry of Environment. When you’re talking about parks, you’re dealing with a lot of moving parts here. There’s starting to be more bilateral communication with the ministries. It’s a good thing, it just takes time for these things to develop.

This article has been edited for length and clarity.

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