Cambodia, Once Secret, Is Now Open for Business:
Source: Brian Sylvester of
The Gold Report
Resource investors are always looking for the next untapped
region and Richard Stanger thinks he has found it. President and
founder of the Cambodian Association of Mining and Exploration
Companies, Stanger has been working to get the word out about
Cambodia, a growing, stable country with the right geology for
some big discoveries. In this exclusive interview with
The Gold Report
, Stanger gives an insider's view of the secrets to investing in
Cambodia and explains why he's expecting a land rush.
The Gold Report:
Cambodia's gross domestic product (
) is roughly $13.2 billion (
) annually, or around $1,000 a person, according to the
Association for Southeast Asian Nations. It's clearly an
impoverished nation, but until the last few years, the country
has done little to develop its mineral wealth. Why?
Mainly because there was almost no information available about
the geology of the country. Most of it was destroyed during the
civil war. The country is a bit of a secret. People don't know
much about Cambodia, or, in some cases, even where it is located.
The infrastructure was pretty poor until recently. Roads were
very difficult to travel. Telecommunications were really
undeveloped. There was almost no infrastructure available for
How did you find your way to Cambodia?
I was looking for a country that had the right geological setting
and a good government with a legal system that is workable.
Cambodia fit that bill.
What is the country's current GDP growth rate?
It's averaging about 6.5% at the moment. I believe that it will
be significantly higher this year. It may be double-digits.
What metals and minerals is Cambodia prospective for?
It's one of those countries where there are not many outcrops.
It's not so easy to walk around in the rocks and find things, but
they're there. There's a lot of sediment covering the country.
However, the country is very prospective for gold, copper and
base metals, iron ore and other industrial metals such as
zirconium, graphite and titanium. It covers a wide range.
What would tempt junior mining companies to invest and explore
for metals there?
The key to the country is that it's open for business and has a
stable, committed government that wants to develop the economy.
There is an economic and legal framework for companies and
foreign investors to come and work. The country has great
financial controls. It's easy to move money in and out of
The people are really excellent-honest, welcoming and hard
working. I can't say enough about them. It's a very safe country.
The operating costs are low. There is rapidly developing
infrastructure, as well as infrastructure specifically related to
the mining exploration industry. There are a number of drilling
companies and geological services here.
Are there any assay labs?
Two recently opened.
Going back 5 to 10 years, Cambodia is similar to what
Some people keep saying Colombia, however Mongolia is a really
good comparison. I went to Mongolia fairly early. Nothing
actually happened there for five years and then it just started
After decades of civil war, Cambodia is slowly finding its feet
and has established democratic elections under a constitutional
monarchy. However, according to Transparency International,
Cambodia is the fourth most corrupt nation in the world. What are
your thoughts on that?
As an investor, I don't understand that rating at all. I'm kind
of perplexed about it, really. That rating is purely perceptual
and it's non-empirical. I actually think they just flat out got
it wrong. And I'm not the only person that would say that.
What are some risks associated with Cambodian investment?
It's really difficult to find too many risks. Cambodia has
internationally recognizable laws, a very stable government that
won by a landslide in the last election, infrastructure
development and an incredible number of companies pouring into
the country to invest. The development is exponential. I know it
sounds unrealistic, but there are very few reasons not to invest
in this country. It's just been a secret for a long time.
Foreign direct investment in Cambodia has almost doubled to $5B
within the last year. Where is that money going?
That figure is likely to be a lot higher this year. A lot of that
money is going into manufacturing. There are some significant
manufacturing facilities being constructed here. It's also going
into agriculture, banking and finance, construction,
infrastructure and development, tourism and food processing.
There really isn't a mining industry in Cambodia yet. It's really
an exploration industry at this point and therefore exploration
expenditure is not included in foreign direct investment.
When money starts pouring into a country that's never really seen
that kind of prosperity before, things can go wrong. Is the
government that's in place able to manage this newfound windfall
I really think so. There's been a lot of growth behind the scenes
over the last few years. This government is very aware of its
position, not only in Asia, but also globally. It's been careful
to develop the economic framework for investment. The government
has well-educated and clever people with international
experience, particularly the prime minister, senior government
leaders and advisers. There are a lot of younger people coming
back to Cambodia after studying and working overseas to help
develop their own country.
Does Cambodia have any form of capital markets?
The stock exchange, which has been in development over the last
three years, opened this month and has run an initial public
offering of the Phnom Penh Water Authority. Cambodia has proper
securities laws, a regulator and an exchange with one company
trading so far.
Not surprisingly, the Chinese are already in Cambodia. Guangxi
Nonferrous Metals Group invested $22 million (
) into construction of a steel processing plant there. Late last
year, China's state-owned Xinhua news agency reported that
Chinese companies planned to invest as much as $500M in Preah
Vihear province. Do the Chinese plan to explore for gold in
There are a couple of companies here looking for gold. However,
Chinese companies are generally not interested in exploration.
They're more interested in development.
What should investors know about Cambodia in your view?
Cambodia is an investor friendly country with a stable democracy,
excellent investment laws, some incentives and a legal and fiscal
system constructed to encourage development. It has a world class
banking system with more than 50 banks, a number of large
commercial banks and none were impacted in the global financial
crisis. There are a lot of places that investors can put their
money in this country. There are so many opportunities here and
it is still early days.
What are some of the mining companies currently operating in
The publicly listed companies areAngkor Gold Corp. (ANK:TSX.V)
,Brighton Mining Group Ltd. (
) ,Southern Gold Ltd. (
) ,Indochine Mining Ltd. (
) andRenaissance Minerals Ltd. (
) . There are also unlisted companies, such as Liberty Mining
What are the primary commodities being sought by those
Gold, copper and base metals are the prime commodities being
sought. Gold is the highest priority at this stage because it's
the easiest to develop in a country that hasn't had a mining
Since it's really about exploration at this point, what companies
have locked up a significant land package? Which have drills
The most active company at this stage is Angkor Gold. It has
three drill rigs operating, more than 10,000 meters (m) planned
this year and probably 150 people working in the field. It's
working on multiple targets and has a large land holding. It's
run by the visionary CEO Mike Weeks, who is also philanthropic in
his outlook. He does a lot of social development work, as well as
the mining exploration.
He's originally an oil and gas guy. Does exploring for gold in
Cambodia seem like a bit of a stretch?
He came from an oil and gas background, but I can tell you from
spending time with him that he's 100% focused on developing
Does Angkor plan to option some of those properties to other
Not at this stage, I believe. However, it could be open to that
further down the track when some of the projects get closer to
the resource stage. I've spoken with management and they would be
open to talking to other companies about coming in to explore
some of the other targets because the company does have a large
Has Angkor had any positive drilling results?
Yes. The two main areas it's focusing on have quite different
geological settings. One of them is a more structurally related,
epithermal gold vein system with a potential of at least 0.5
million ounces in the first stage. The other area is a
copper-gold-moly porphyry system, which is being actively drilled
right now. Both of those areas-the second one in particular-have
huge potential and are getting good results.
Has the copper-gold system been explored before?
The area with the copper-gold-moly system has been explored since
2005. This year, Angkor is getting close to the source of a very
large anomalous area.
Are there other companies on the ground trying to prove up some
ounces with the drill bit?
Renaissance Minerals has a drilled up Indicated resource. It has
quite a land package and a growing resource of currently about
720,000 ounces at the Okvau gold deposit. I am aware that the
company is planning a significant ongoing drilling program to
commence almost immediately. It has probably drilled about
50,000m and has a number of other immediate targets in the area.
Renaissance is a success here and will be one of the early
starters as far as mining is concerned.
Are any other companies that far along?
There are other active companies, such as Indochine Mining. It
has a big land package and is actively exploring it. Indochine
has carried out extensive field work and drilling programs along
with Southern Gold and Brighton Mining Group. However, I believe
those companies do not yet have anything like the advanced
projects of Angkor Gold. I think it's safe to say Angkor will be
the next company up and running with a resource inside of a year
Are you getting more calls from your friends in Australia these
Interestingly, I've had one company after another up here in the
last six to eight months. It's remarkable how many companies are
interested in getting involved in existing projects, joint
venturing, picking up new areas or getting on the ground to learn
about the country. I'm expecting a little bit of a land rush in
the near future. A lot of people are trying to get involved in
the business here now.
I guess Cambodia isn't a secret anymore?
That's what we like to think. We had an international investment
conference here last year; it was well attended. That was one of
the things that was brought up at the conference: Cambodia is no
longer a secret. It's quite staggering. A number of airlines fly
directly into Cambodia now. The flights aren't just for
tourists-they're filled with investors. Investment and venture
capital funds are setting up here. I can't imagine what it will
be like in five years.
Thanks for sharing your insights on Cambodia, Mr. Stanger.
Richard Stanger is the founding and present president of
the CAMEC (Cambodian Association For Mining And Exploration
Companies) and has been actively involved in the development of
mining exploration in Cambodia since 2004. Stanger is an
explorationist/businessman with more than 20 years of
involvement in mining and exploration. Previous experience
includes directorship of several Australian listed public
companies as well as numerous unlisted entities, direct mining
experience and a number of years in the management consulting
industry primarily focused on the mining industry.
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1) Brian Sylvester of
The Gold Report
conducted this interview. He personally and/or his family own
shares of the following companies mentioned in this interview:
2) The following companies mentioned in the interview are
The Gold Report:
Angkor Gold Corp. Streetwise Reports does not accept stock in
exchange for services.
3) Richard Stanger: I personally and/or my family own shares of
the following companies mentioned in this interview: Angkor Gold
Corp., Liberty Mining International Ltd. I personally and/or my
family am paid by the following companies mentioned in this
interview: None. I was not paid by Streetwise Reports for
participating in this story.
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