Thom @ Large: Swimming To Cambodia Gold
By March 1, 2012– Published in on
OYADAO BORDER CAMP -- Cambodia explorer Angkor Gold is little known to travelers who visit this country to tick off Buddhist temples and irrawaddy fresh-water dolphins flipping in the Mekong River.
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That's OK. I hunt alone, as Hong Kong asset manager Marc Faber likes to tell his mates. I am here to see if Angkor Gold’s portfolio of properties contains the world’s next massive mineral deposit, something several geologists, a secretive group of investors and one technician-engineer in this part of the world are telling me.
I come away from 9 days here thinking the extent of Angkor Gold's "country rock" by late 2013 looks set to rival Cambodia's abundance of Buddhist temples, rubber plantations, cashew trees, cassava farms and swim-friendly volcanic lakes. As for the metals, which include gold, copper, silver, molybdenum, zinc, lead and possibly iron ore, I believe Canada-traded Angkor has a legitimate shot at turning its geologists, executives and working Cambodia staff, all vested with stock options, into multi-millionaires.
But for now, even as Angkor's ANK shares in Canada set fresh highs each day, investors must withstand months of data bursts from the growing company. In time, that data will reveal just how much mine-ready ore is contained in Angkor Gold’s 2,600-square kilometers of poly-metallic targets and prospects.
There is some sweet harmony in my visit. Cambodia's prospecting fields are for me the steppe lands of Mongolia in 2002; the Middle Cauca of Colombia in 2006. Ghana’s Kibi Gold Belt in 2007. The nation of 14 million is a former French colony and neighbour of Vietnam, Laos and Thailand.
I like to be first, mostly to make money in misunderstood and sometimes maligned places. This is why I am not next door in Vietnam. Already on the radar,
the government of Vietnam is said to be committed to its fresh laws, instituted July 2011, that promote resource investing. Good luck.
Of Cambodia, 321gold.com’s Bob Moriarty tweaked me today, "I hate you; you found a country I haven't even seen yet." Mr. Moriarty, a veteran writer and metals investor, gets credit for genesis coverage of Tanzania, Ghana, Mexico and eastern Europe, mostly silver and gold. Bob also gets credit for piloting scores of USA attacks on the enemy during the Vietnam War more than 40 years ago.
I participated this past wondrous week in various community efforts at medical clinics, a high school and a hospital, all organized by Angkor CEO Mike Weeks and family and friends.
Angkor I am informed means "city" in the Khmer language. I had little time this visit for viewing city or country temples and statues of bellied Buddhas. I might have slipped in a tuk-tuk tour of Phnom Penh, a city as energized as Dar es Salaam in Tanzania or Ulan Bator in Mongolia. Instead, Angkor's resident minerals sage, Dr. Adrian Mann, and peripatetic CEO Mike Weeks, a community-minded former oil-gas negotiator from Alberta, had me touring both gnarly patches of bush and paddy-flat plain and the region's clinics, hospitals, schools and sponsored villages.
[caption id="attachment_1365" align="alignnone" width="300" caption="Mike Weeks cracks open sea container of med supplies & ambulance"][/caption]
At first scan, this nation of workaholics reminds me of an unwashed but gold/coal/copper-crazed city of Ulan Bator circa turn of the decade Mongolia. Or Mali's dusty Kobada gold and copper project of present-day African Gold Group (AGG in Canada), whose termite hills, augur programs and sheer size are an Africa equivalent. Cambodia’s prospecting fields, I have to add, remind me of the ripe red earth of Colombia's Antioquia: drilling grounds of rough and tumble prospectors Sunward Resources (SWD: Canada) and my researched favorite, heavily owned (on my part) Bellhaven Copper & Gold.
Mike Weeks and Delayne Adams' outreaching community chores and contributions in this ragged yet rebounding tropical nation are a big draw for me. On that community aspect, I spent two of my days helping Mr. Weeks of northern Alberta and his wife, Delayne, unload donated medical supplies and an ambulance from a 40-foot shipping container at Angkor HQ in Banlung, Ratanakiri Province.
I assisted as well in clinic visits and cameo appearances at a high school (Photo above Borkeo High School: Thom Calandra) and at villages whose water wells, latrines and other facilities are supported in part by Mr. Weeks, age 54, and by his Alberta network of shareholders and friends.
-- Australia's Oz Minerals (OZMLF in North America) and its pending $40 million transfer and sale of Cambodia gold properties to Renaissance Minerals this month give investors a metric of $18 to $20 an ounce for compliant Khmer gold in the ground. That sounds lukewarm, but the Oz transaction will set a template for Angkor Gold both to distribute some of its own vast property portfolio to worthy partners and to develop the rest all the way to cheaply funded production. "We already know we have half-a-mine here and almost half-a-mine there, and I've taken far less into production," says Dr. Mann, a board member and VP of exploration.
-- The fresh per-ounce comparable from Oz and Renaissance will benefit Angkor in coming months as data spill from drill assays, stream sediments, electromagnetic surveys, soil geochem and chip sampling at 5 concessions and targets, perhaps six. There are geochemical and airborne magnetic surveys just ahead, too. Angkor has four licenses and three memoranda of understanding in Cambodia right now, as I understand it. (Photo here: Mike Weeks, far right, and John Paul Dau at his side lead tour of one of the Angkor Gold camps in northern Cambodia)
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-- The licenses and targets I have seen run the range: possible gold and copper porphyry at one. Basalt cover and potassic alteration at another. Veined systems at a third. Breccias and sulfidized epithermal as well on Angkor-operated ground. Even a placer operation in the works, one that could net Angkor Gold an ounce or more of gold daily while curtailing needless smothering and drowning of artisan miners (as my cherished Xtra-Gold Resources currently is doing in Ghana, with great community success and net income to boot).
I expect a data flow in coming weeks and months that might turn away Asia-minded asset managers’ heads from current media darling Myanmar, regulated Vietnam and perhaps farther afield, from troubled New Guinea and administratively challenging Philippines.
-- Cambodia is a wide open jurisdiction: an industrious nation, those 14 million people. Angkor Gold is the only publicly traded Canada junior known to have fully permitted licenses in the democratic nation. Of course, as soon as I put that in print I will hear from someone else, won’t I?
-- Cambodia is cheap. Hiring rates run $300 a month for entry level laborers, the company's legal representative, Lim Sokharaksney, says. A chef costs $400 monthly. Security forces, sometimes rented from the military or from local police forces, are in the same salary range. Mr. Lim is a deputy director of the Cambodia National Police and, like many civil servants, contracts out his services.
-- Angkor Gold has no bank debt and about $2 million of funding. Nearly all of it came via Mike Weeks, Delayne Adams and their oil-gas and helping-hand friends from Alberta. If I were an investment banker, I'd counsel the company to sit tight on any brokered financings until the shares reach 75 cents to 80 cents. To be honest, I'd rather see an Aussie enterprise take a 9.9 percent strategic stake at a premium price, with a half-warrant out of the money. But then, if I were a banker, my commission-minded employer would trash me for saying that.
-- Foreign direct investment at a yearly pace here is $5 billion or approximately double what it was 12 to 18 months ago. Internet, mobile and telecom (largely unregulated) are well above Third World standards. Roads are good to excellent and in places on par with those of more mature Vietnam and in some cases, those of Thailand.
-- VP of Exploration Adrian Mann now has five working camps by my count and 90-plus local geologists, contractors, logistics personnel and support staff in country. Dr. Mann hails from what is now Zimbabwe and once was Rhodesia. His staff include Australians, Khmer natives, Canadians and Laotians. The doctor of geology is 67 and a self-described extreme exploration specialist with a pedigree of success. The local geologists here practically worship him. (See: www.angkorgold.ca for descriptions & slide shows)
-- North Africa oil and gas negotiator Mike Weeks, plus 8-year Cambodia investor and VP of biz-dev Richard Stanger and their ANK team, now control 2,666 square kilometers of properties. That is spooky big and problematic. Testing the properties in rapid yet thorough reviews are geologists, geochemists and shippers from Australia, Canada, Yukon, Africa, New Zealand and Cambodia.
-- Drill rigs are operating round the clicking clock at concessions in Okalla 45 minutes in one direction from Banlung headquarters and in Oyadao by the border, 45 minutes the other way. That Oyadao spread sits almost kitty-corner to a multistory hotel and casino rising in pastel orange a kilometer away. I wonder what arrives first: a ribbon cutting ceremony for the Vietnamese-financed house of cards or heady assays from Oyadao's polymetallic camp of calco-pyritic core specimens? (Photo: Electromagnetic surveyors at Oyadao North prospect)
[caption id="attachment_1366" align="alignnone" width="300" caption="Guillermo Salazar, Grant Roberts performing EM survey"][/caption]
"Suck it and see," said Dr. Mann. Yes, that is a direct quote. And no, the professor of rock is clueless about pop band Arctic Monkeys and its latest disc of the same name. At Dokyong, yet another prospect near the Border area, there is plenty of sucking and seeing (rock chip geochem, auguring) ahead.
Here is a biscuit for you: mining law here comes straight and plain from the Ministry of Mines & Energy and is modeled along the strictures of New Zealand's New South Wales. The paths to title and to licensed prospecting and drilling seem to me as plain as the grins on Khmer kids' shining high school faces. But then, I am no lawyer. (All photos except one by Thom Calandra)
There is more to come. Geophysical data loom from what Dr. Mann calls a "bull’s-eye target" at Oyadao South, a vast parcel, flat as everything in Mekong Delta style and
looking a lot like shallow copper, gold and silver "company makers" I have seen at Ivanhoe Mines' Oyu Tolgoi in Mongolia, at Antares' Haquira in Peru and possibly at Gold Standard Ventures' Railroad Gold Project near Elko Nevada. (I own GV shares, thanks to exhortations from Gold Standard CEO Jonathan Adwe and large shareholder Carl Pescio.)
There is no shortage of choices in this Cambodia property portfolio. Brecciated ore is a possibility at a rough swath of property called Ogama, for instance.
Most promising in my view look to be scores of Ashanti type artisanal holes at Phum Syarung, a moonscape of termite hills and abandoned lean-tos at the southern end of the border prospects. Dr. Mann says his electromagnetic surveyors will be there within days. The place looks the spitting image of African Gold Group's Kobada in Mali; and yes, I own AGG shares, thanks to several visits to West Africa.
The EM team (Grant Roberts and Francis Thompson of Subsurface Imaging based in New Zealand with an assist from Austhai Geophysical) is on the ground at Border North (Oyadao) right now; no airborne magnetics are permitted to cross a no-fly zone that buffers Cambodia and Vietnam.
The bearded Adrian Mann, a scarecrow wizard when he wears his Chinese cone hat, has a hunch Phum Syarung might be a shallow epithermal deposit of low grade gold with copper credit. (The doctor of geology is seen in one photo here at Phum Syarung)
[caption id="attachment_1367" align="alignleft" width="300" caption="Dr. Mann and logistics assistant at Phum Syarung"][/caption]
It is those multiple Okalla targets stalk everyone at the company. Okalla's contracted rig, operated by a White Horse, Canada, driller, is pulling core that shows a pale orange, vaguely pink hue that indicates potassium feldspar, with sniffs of molybdenum, iron and copper. Potassic alteration at Okalla hole 28, a Kluane company rig twirling as I write this, might be a telescoping indicator of significant gold. We'll know another 50 to 100 meters deeper from here.
On the half-empty: that 2,660 square km of mineral licenses and memoranda of understanding can try the patience of any Buddha. ANK shareholders must breathe deep and allow the company at least a year to sort through the pile. There are surer choices in southeast Asia. Intrepid Mines (IAU in Canada) and its gold-copper porphyry at Tujuh Bukit in Indonesia come to mind.
NOTES: Angkor’s team and its privately held predecessor, Prairie Mining and Liberty Mining, have been at this for several years now in Cambodia. Liberty, controlled by Mike Weeks and Richard Stanger, still owns several Cambodia properties. Mike Weeks assures me anything of interest will find its way into Angkor’s hands at fully disclosed and equitable prices. I believe him, but then, I own ANK shares, more than 300,000 purchased in the open market.
As for Mr. Stanger, he also is founder and president of the Cambodia Association of Mining & Exploration Companies. Richard Stanger, a tall, somewhat reserved Aussie, is recognized by businessmen and businesswomen throughout the nation. Mr. Stanger's CAMEC has about 25 miners, drillers, labs and assorted Cambodian
resource companies supporting it. Many of those will be attending the Cambodia Investment Summit in late April.
I look to return in April for what looks like a benchmark investment show organized by the capital city's Phnom Penh Post newspaper’s Stuart Becker. Mr. Becker, an editor, serves as a kind of gateway into Cambodia investing; he knows the miners, the bankers, the technologists. (Please see details.) I know those who attend will get two days that will set them straight about commerce of all types in Cambodia. The new Sofitel in the capital will host the affair.
Mr. Weeks and his Angkor Gold probably will arrange property tours of company holdings. With luck, those on board might even get to swim across an 800-meter wide volcanic lake, as I did almost every day I was here.
Mr. Weeks, an avid runner and swimmer, knows top lawmakers and mining officials on a first-name basis. That’s his job when he is not either in the field, riding his bicycle to meetings or helping his wife parcel out medical supplies. The company's country manager, John Paul Dau, seems to know every local geologist, logistical engineer and lab engineer in the country.
Two assay labs now operate within the country.
One local driller for Angkor, Vertiek, is Cambodian owned and operated and as precise in its core orientation and efficiency as any I have seen in any nation.
In addition, Angkor Gold's Dr. Mann and board member and geologist Guillermo Salazar know enough talented geo-brethren and women to service much of that land economically. Mr. Salazar hails most recently from Copper Fox, a British Columbia success story. He was in Cambodia during my tour.
Community: The new high school at Borkeo near Angkor Gold's border camp has 40 or so students. It will have to house triple its current student population within 18 months to accommodate new grades (10th, 11th and eventually, 12th). The kids currently are working on improving the latrines when they are not studying the history and evolution of man, algebra and English.
Mike Weeks with his oil and gas cognoscenti, and Delayne Adams, owner of a thriving Canada network of ATM cash machines, have made water wells, latrines and a makeshift dormitory at the school a passionate project and one of at least five community efforts of theirs in Cambodia.
[caption id="attachment_1368" align="alignnone" width="300" caption="Audience of Ban Lung and area residents at ambulance ceremony a week ago at Ratanakiri Province Hospital"][/caption]
This past month, Mr. Weeks, Ms. Adams and Canada supporters donated an ambulance and medical supplies to Ratanakiri Provincial Hospital. (Photo: Ceremony at hospital attended by Ministry of Health officials, company staff, a crowd of 200 Banlung and area residents ... and a banker or two )
Mr. Weeks and Ms. Adams brought the 40-foot shipping container with ambulance and medical supplies with the assistance of International Hope Canada of Winnipeg, Manitoba. (Please see: Related articles and photos on Angkor Gold’s community efforts.)
Red flags: The Khmer Rouge is long gone, but there are always red flags when it comes to minerals exploring. Angkor Gold is a highly speculative company in a mostly untested mining jurisdiction. Cambodia and the rivers that course through it still display the scars, and physical landmines, of Pol Pot's gruesome genocide. Add to that the 14-year war Cambodia fought against the Vietnamese to the north, ending I believe in 1989 or so.
Canadians and yes, Americans, even after their bombing of the country during the Vietnam War, are welcomed warmly here in cities and villages. Crisp dollars both USA and Canadian are used as freely as Cambodian riel. Euros are seldom seen. Thai and Vietnamese currencies are recognized in the provinces but usually are awarded the status of a Mekong water rat.
The Khmer people are proud of their cuisine, their monuments and even their own currency. Khmer who fled their country’s genocide are receiving five-star reviews everywhere, most recently this week in the San Francisco Chronicle profile of an overreaching coed college basketball player. Families here are purchasing motor scooters, motorcycles and Japanese cars. The road to Banlung way northeast of the capital is smooth for the most part. The trip takes 7 to 8 hours, which is a third of what it took just six years ago.
Wedding tents line the streets and highways. Scooters and China-made motorbikes carry improbable loads: five-dozen chickens, a week’s worth of cassava, a family of five.
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The government is led by Cambodia Peoples Party, which took 80 percent of the vote in the last national election. The next one is 2013.
The local lagers are refreshing and scrumptious. The fish is fresh. The venison is plentiful and stewed. There is plenty of eel in the rivers and deltas. Squirrel and iguana are delicacies. These and the eel are fried, stewed and even steamed. The bananas are the best ever.
I look to purchase additional shares of Angkor Gold in the coming days and weeks, as I have told those who receive my missives as free subscribers of my work; I am holding until the shares reach fair value, discussed here as anything above $1 Canadian, or until Dr. Adrian Mann and team's data-bursts from assays and other events in coming weeks sway me to reset my expectations.
Warning: if the company fails to manage its large property portfolio quickly and ruthlessly, and chuck its lesser properties to partners, the shares will lose most of their value.
Apology: I make apologies every chance I get for my mistakes some 9 years ago. I am not required to say or disclose this, but it makes me feel good. In 2003, as a journalist and writer, I inadequately reported purchases and sales according to proper USA securities law. I settled the case quickly by acknowledging the matter, paying a penalty and returning profits. Once again, I apologize. I am always willing to discuss what happened. I do not and never have had restrictions on my trading, my research nor my ability to serve as a director or executive of publicly traded companies, thanks to the fairness of USA regulators. I have been both a director and an executive of publicly held companies and I hope to serve in those capacities again.
Notice: I received no payment nor shares from Angkor Gold, nor from Cambodia operating company Prairie Pacific Mining Corp., the private company that already has $8 million plied into the Cambodia dirt. CEO Mike Weeks runs the Angkor show, hoping in part to benefit his stakeholders, folks who include his socially minded Alberta kin of big-boned Canadian oil-gas ranchers, friends and family.
– Thom Calandra’s has appeared in newspapers (San Francisco, London, New York), newsletters, magazines and across the Web. He is a founder of CBS MarketWatch, now Dow Jones MarketWatch. He also founded Ticker Trax for Stockhouse of Canada. His work can be seen at www.babybulls.com, which is a Torrey Hills Capital service. Thom also writes for the publisher of this article, Cambridge House Café, which is a service of Joe Martin’s Cambridge House conference presenter. Thom supports the non-profit and prolific Gold Antitrust Action Committee at www.gata.org. He will be moderating a mining panel at the Cambodia Investment Focus conference in late April. For more, please see: