Indian mining company Mesco Gold seems set to operate Cambodia’s first commercial mine with infrastructure at the Phum Syarung mine in Ratanakiri Province well advanced and government approvals pending.
Mesco has established the required surface-level infrastructure and has submitted its environmental impact assessment. It says it can begin extracting ore within weeks of receiving its production licence, although it could take up to a year before gold production begins.
Company director Rajeev Moudgil says Mesco Gold has built two inclines on the 12sqkm tenement 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.
“The inclines follow the ore body, so technically extraction can start within one or two months of the granting of the mining licence,” he says.
“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.” He added that it would take another six months to ramp up production to full daily capacity of 500 tonnes.
Mesco Gold is a subsidiary of Indian steelmaker Mesco and purchased the rights to develop and mine the Phum Syarung prospect from Canadian exploration company Angkor Gold Corp in 2013. As part of the $1.2 million sale agreement to Mesco, Angkor negotiated a net smelter royalty agreement that will see it receive a share of any gold extracted.
The royalty agreement is based on a sliding scale that depends on the price of gold. The royalty was previously about 7.5% but falling gold prices have reduced it to a current rate of 4% to 5%.
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.