It has been just over a year since Vancouver-based Angkor Gold (ANK-V) went public with its stable of Cambodian exploration projects, and it is looking like the company’s early mover strategy in the developing Southeast Asian nation might be poised to pay off.
To kick off the new year, Angkor entered into an agreement with a partnership that includes Chinese gold miner Canxiang Mining to sell a portion of its Oyadao gold-silver property for US$2.4 million in cash. Angkor chairperson and CEO Michael Weeks says the transaction is part of a deal-making strategy that would let the company fund exploration on its expansive Cambodian land package with limited equity dilution.
Under the agreement, Angkor would sell 78 sq. km of its Oyadao property — which sits in northeastern Cambodia along the Vietnam border — while retaining 100% ownership in the remaining 222 sq. km of the project under a new exploration licence. The updated exploration licence would include Angkor’s Phum Puik, Sesan North and Phum Lomh prospects.
“We wanted to move Angkor from a junior explorer to a company with a history of generating viable mineral-development projects in Cambodia,” Weeks says. “This initial transaction accomplishes just that at a value that is in-line with other recent transactions we have observed in frontier opportunities.”
Angkor has drilled 68 diamond holes over 7,300 metres to date at Oyadao, and identified structurally controlled quartz-carbonate veins at its Border North and Border Central targets.
The company announced results from a 31-hole program at the site in July, with highlights including: 6 metres grading 4.81 grams gold per tonne from 59 metres in hole 12-060D, and 6.7 metres averaging 2.44 grams gold from 24 metres depth in hole 12-059D, which included a higher-grade intercept carrying 10.25 grams gold over 1.5 metres.
The sale could mark the first step in Angkor’s strategy to develop a project-generation model in Cambodia. The company retains a 100% stake in 2,800 sq. km in the country, and spent US$10 million privately during extensive surface campaigns that included airborne magnetics, sampling and trenching on its properties.
“We’re intending shortly to release more details on our platform for 2013, including our expanded exploration program,” Weeks says. “Our Cambodian story will continue to gain momentum. Combined with our massive land package and project-generation capabilities, it would be a mistake to overlook us as the newest frontier opportunity.”
Though drilling has focused on the Border targets at Oyadao, Angkor has also drilled holes collared at the Phum Syarung prospect located on its Oyadao South tenement. The company released results from drilling at the target in late September, and Weeks says that Phum Syarung is a priority for Angkor going into the 2013 field season.
Highlights from discovery holes at Phum Syarung include: 4 metres grading 16.65 grams gold and 17.4 grams silver from 60 metres depth in hole 12-018D, 3.3 metres averaging 6.67 grams gold from 105 metres in hole 12-013D and 3.3 metres grading 5.07 grams gold from 91 metres in hole 12-016D.
Angkor has traded within a 52-week range of 26¢ and 60¢, and has 75 million shares outstanding. The company closed at 33¢ per share at press time and maintained a $25-million market capitalization. The Oyadao transaction is expected to close within 45 days.
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