The new agreement is the second between ANGKOR and MESCO. It expands mineral rights for MESCO revises an already existing net smelter royalty (NSR) that ANGKOR holds on MESCO’s Phum Syarung Gold Mine; and allows ANGKOR to focus on its core prospects.
The JV Agreement adds to MESCO’s current land holdings in the region which includes the soon-to-be-operating Phum Syarung Gold Mine that is scheduled to begin mining in 2016.
- The JV Agreement on the Oyadao North Concession provides MESCO with the rights to explore the entire licence for minerals and, if deemed warranted, bringing a portion into commercial production by establishing and operating a mine.
- MESCO agrees to spend US$1,250,000.00 on exploration.
- ANGKOR will maintain a 15% free-carried interest on the Oyadao North license without incurring any financial obligations related to the maintenance of the licence and future exploration/mining programs.
- Under the JV agreement, ANGKOR and MESCO have renegotiated the existing net smelter royalty (NSR) agreement on the Phum Syarung minesuch that the new NSR for gold will be at 2.0% while the price of gold is less than US$1,000.00 and will increase 0.25% for every $50.00 that the gold price exceeds $1,000.00 to a maximum of 7.5%. For all other minerals, a 7.5% NSR will be paid.
Angkor Gold CEO, Mike Weeks, stated:
MESCO is very close to receiving final approval for their operations at Phum Syarung Gold Mine, and this deal enhances their ability to continue to explore and expand their operations well into the future, which bodes well for all parties involved. MESCO is incorporated under the laws of the Kingdom of Cambodia and is affiliated with Mesco Steel Ltd., a leading vertically-integrated iron and steel producer based in India that has successfully diversified its operations into other raw materials and commodities, including mining.
Angkor will focus on its core prospects – Halo, Okalla West, Koan Nheak, and CW – for the current work season, and today’s announcement ensures that the Oyadao North license continues to be explored by a world-class team,” stated John-Paul Dau, VP of Operations. He continued, “Our business model for Cambodia continues to be based on the identification and development of mineable assets through joint ventures agreements with a strong NSR and carried interest attached. Today’s transaction furthers those plans towards building long-term shareholder value.
Our early results out of Okalla West have been very promising and we are awaiting test results and interpretations from our recent termite-mound in-fill survey,” said Dau. “And the positive copper mineralization in our soil and rock sampling programs in Halo, with results of over one percent copper from intrusive rocks exposed at surface, are key contributors to our attracting international attention from a number of global players who are especially focused on base metals. We have hosted numerous site visits with these potential partners, with the intention of bringing the right one to the table with the technical and financial power to prove out what our team already believes to be a very large porphyry system.
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