Angkor Gold (CVE:ANK, OTCMKTS:ANKOF) – Important Update

Palisade Research August 8, 2017
Category: Research

Last September Angkor Gold was well on its way to raise $1.5 million to continue its torrid pace of acquiring new land tenements in Cambodia, while continuing to explore its multiple high-potential licenses.

Angkor has an impressive royalty agreement on Phum Syarung, where the construction of the mining infrastructure is progressing quickly. Its partner, Mesco Gold, a subsidiary of a $4B Indian steelmaker, purchased Phum Syarung and invested $1.9 million to acquire 100% of the project, leaving Angkor with a 2.0%-7.5% sliding scale on production.

Even though Mesco now owns 100% of Phum Syarung, Angkor’s direct quotes from Mesco (which is not a reporting issuer in a jurisdiction recognized by Canadian regulatory authorities) regarding operational and geological potential were flagged by the regulators, and in response Angkor produced a NI 43-101 report on the property.

This forced Angkor to halt a financing, and to temporarily divert its manpower and treasury to complete the report.

This report – which Angkor said from the outset would not produce reportable results since Mesco is under no obligation to work to NI 43-101 standards, yet nonetheless reported on the rapid progress of the mining infrastructure – has now been completed. Regardless, there has been considerable progress on its other properties, and Angkor has been executing its prospector generator model to a T.

Angkor Gold currently has four farm-in agreements: Mesco at Oyadao North for $1.25 million; Blue River at the Banlung Tenement for $3.5 million; JOGMEC at Oyadao South for $3.0 million; and Emerald/Renaissance at Khoan Nheak for $2.2 million (all US dollars).

Angkor’s partner, Blue River Resources has commenced diamond drilling at the Okalla West gold target, in the 150-square-kilometre Banlung tenement. Trenching at Okalla West has yielded gold grades of up to 11.5 g/t.

The first phase of drilling will be 500 meters, with the goal to determine the orientation, width and frequency of mineralized structures. The program also aims to confirm the style and intensity of country rock alteration. The second phase of drilling will follow results.

Blue River Resources has a 50% earn-in on Banlung, and must spend $3.5 million USD over 4 years. Blue River can earn another 20% if it completes a Bankable Feasibility Study. Angkor will retain a minimum 30% carried interest with the option to convert to a 5% NSR.

At its 100%-owned Oyadao South, Angkor Gold has commenced a local and regional exploration program with its partner, Japan Oil, Gas and Metals National Corp. (JOGMEC).

The local program will consist of a drill program, a geophysical survey and surface geology on the Halo copper-porphyry-style target. The initial diamond drill program will consist of 1,200 meters of HQ3 drilling, primarily testing targets derived from a previous IP program. Three 400-metre drill holes are planned at the Halo porphyry-style system, where a 7.25 square-kilometer copper anomaly has been identified.

The regional program will consist of geochemical sampling and geological mapping in areas considered prospective for copper-porphyry-style mineralization. Areas with identified airborne magnetic anomalies will be targeted, with a focus on areas with intrusions.

JOGMEC can earn 51% in Oyadao South by spending $3 million over 3 years, with Angkor retaining a minimum 15% interest or converting it to 1.5% NSR.

We expect Angkor Gold to have a lot of exciting news coming down the pipe, and with the formality of the Mesco report finally out of the way, it will be able to complete its financing and move forward. Angkor will continue to explore its multiple licenses, in anticipation of the first NSR payments to come from its first production milestone. This self-sustainability is key to Angkor, and is deserving of a re-rating.

We liked the narrative when we first initiated coverage last October, and nothing has changed. The company is just cheaper.

Palisade Global Investments Limited holds shares of Angkor Gold. We receive either monetary or securities compensation for our services. We stand to benefit from any volume this write-up may generate. The information contained in such write-ups is not intended as individual investment advice and is not designed to meet your personal financial situation. Information contained in this report is obtained from sources we believe to be reliable, but its accuracy cannot be guaranteed. The opinions expressed in this report are those of Palisade Global Investments and are subject to change without notice. The information in this report may become outdated and there is no obligation to update any such information. Do your own due diligence.

 

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