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The Calandra Report: Live from Phnom Penh

Thom Calandra
1 Comment|April 17, 2014

BAN LUNG -- The Chinese are here. They just arrived, 11 of them, largely geologists and engineers.
 
The Indians are here, including the head of the company building Cambodia's first commercial gold mine.  ​The steel magnate took a 7-hour car ride up here from Phnom Penh. ​Just as we did.

All the charter choppers in the capital ​are busy, or on holiday, for Khmer New Year this week.
 
The Canadians are here. Angkor Gold (TSX:V.ANK, Stock Forum) has been here five years. More if you count predecessor Liberty Mining of Australia.
 
JK Singh, chairman of Mesco Steel, says his team has December 2015 as his drop-dead deadline for cash for gold.
 
0416141542b.jpg
 
From the Angkor Gold Phum Syarung mine rapidly rising in the northeastern part of the country. (Estimate: 10,000 ounces a year)
 
0416141607a.jpg
 
This is the fourth visit to Angkor Gold. In that time, Angkor Gold has become one of my largest holdings. It is a member of the TCR 8.
 
If I am correct, a ​$2.25 million equity stake from a China merchant bank with links to the Shandong Institute of Geology​, ​and ​announced this week, will shine a takeover light on tiny Angkor.
 
Angkor Gold now holds 7 concessions in Cambodia. Three properties are joint-ventured, sold outright (to another China entity in 2012) or strategized with an investor that has capital and technical expertise. 
 
​Says Steve Cochrane, a vice president and senior investment adviser at Richardson GMP in Calgary, Canada: "Angkor has not only survived one of the toughest investment environments for Canadian junior miners the last 15 year, but actually thrived. The most recent announcement of a $10 million commitment from a major Chinese investment and mining consortium again highlights Angkor’s ability to think outside the box."
 
In the past two years, Angkor has kept exploration activities moving forward by doing joint ventures, "selling at a profit prospects it has developed, and attracting new partners to co-develop concessions," says Cochrane, who accompanied us on our first TCR visit to Angkor Gold's properties in January 2012.
 
I am most taken, for the moment, with the looming gold mine. Angkor Gold has a 7.5 percent net smelter royalty. The oxidized over-burden alone could hold 6 grams or more of gold per metric ton.
 
Mr. Singh on Wednesday told Angkor Gold CEO Mike Weeks he expects to bring that gold to Mesco's own on-site smelter for an operating cost of between $600 and $700 an ounce.
 
jk-and-mike.jpg
 
The Mesco team handed Mr. Weeks its latest joint-venture payment for Phum Syarung gold mine: $156,000 USD.

More to come on all this. I am in between visits with the Chinese, the Indians and the Canadians. Read the press releases. See our ongoing TCR coverage. For heaven's sake, buy the stock.
 
Every picture: Tells a story. ​Our TCR family heard in January, when last we were here, how rapidly Cambodia's economy is growing. Bicycles are out and Toyotas are in. Skyscrapers, factories, hotels, casinos, rubber plantations and new roads are going into this Buddhist nation at a rate that makes Mongolia's minerals boom look staid.
 
Yes, tourism is hurting a tad because of last summer's protests against the longstanding ruler: Cambodia People's Party, which likely cooked the books on the 2013 elections. Not helping: unrest about pay and conditions for apparel workers.
 
Still, every other vehicle looks like a spanking new Toyota. Farm equipment here in Ban Lung (Ratanakiri Province) is state of the art and readily for sale.
 
credit-boom.JPG
 
A financial newsletter writer, EB Tucker, is with us here this week. He is from Florida and writes for one of North America's largest financial newsletter franchises. One of the photos attached is from Mr. Tucker: a brand-new Range Rover under cover and in the kitchen of a village restaurant. More than 300 kilometers from the capital.​
 
​There is either a credit boom taking place in Cambodia. Or someone is giving away a lot of free cars, trucks, SUVs, motorbikes, and motorized farm equipment. ​
 
Elsewhere: Please see both CEO.ca and 321gold.com for reviews of Desert Star Resources (TSX:V.DSR, Stock Forum), the Arizona, Nevada and New Mexico copper project developer -- grass roots. ​We toured the Arizona projects earlier this month, and I have been purchasing DSR shares.​
 
See: Potential copper fortunes under cover next to Arizona’s largest open pits and Arizona Copper Alternatives

Thom Calandra  
@thomcalandra for Twitter

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tcalandra
Coming Next In The Calandra Report: Copper In Arizona;More From Taipei and Phnom Penh www.thomcalandra.com
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April 21, 2014
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