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Mesco set to draw first gold from Ratanakkiri mine

Mesco set to draw first gold from Ratanakkiri mine

Mesco Gold has established the required surface-level infrastructure and is awaiting government approval to begin the extraction of gold at its Phum Syarung mine in Ratanakkiri province, the company’s director said yesterday.

The Indian mining firm is poised to become the first operational commercial mine in Cambodia and could begin drawing gold in early 2016.

Rajeev Moudgil, director of Mesco Gold (Cambodia) Ltd, said the company has built two inclines on the 12-square-kilometre plot it bought mining rights to in 2013, and is erecting winders capable of hauling excavated material from underground to the surface. It has also constructed an assay lab and office, as well as access and haul roads.

He said Mesco Gold has already submitted its environmental-impact assessment and was set to begin extracting ore within weeks of receiving its production licence, though it could take up to a year before gold production begins.

“The inclines are following the ore body, so technically extraction can start within one or two months of the granting of the mining licence,” Moudgil said.

“It would take close to 12 months to set up a gold processing plant, hence we expect to start production within 12 months of [receiving the] mining licence.”

It will take another six months to ramp up production to full capacity of 500 tonnes a day, he added.

Mesco Gold – a subsidiary of Indian steelmaker Mesco – purchased the rights to develop and mine the Phum Syarung prospect from Canadian mineral exploration firm Angkor Gold Corp in 2013.

As part of the $1.2 million sale agreement to Mesco, Angkor Gold negotiated a net smelter royalty agreement that would see it receive a share of any gold extracted.

“[It’s] a sliding scale royalty that depends on the price of gold,” said John-Paul Dau, vice president of operations at Angkor Gold.

He said that the royalty was previously about 7.5 per cent, but falling gold prices had reduced it to a current rate of 4 per cent to 5 per cent.

Angkor Gold estimates that an underground mine built at Phum Syarung could produce 10,000 ounces of gold a year over a 10-year mine life.

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