Headframe under construction at the the Phum Syarung
mine in Cambodia.

Mesco has established the required surface-level infrastructure and has submitted its environmental impact assessment. It said it can begin extracting ore within weeks of receiving its production license, although it could take up to a year before gold production begins.

Company director Rajeev Moudgil said Mesco has driven two inclines on the 12-km2 tenement and will install hoists. It has also constructed an assay lab and office, as well as access and haul roads.

“The inclines follow the orebody, so technically extraction can start within one or two months of the granting of the mining license,” Moudgil said. “It would take close to 12 months to set up a gold processing plant, hence we expect to start production within 12 months of [receiving the] mining license.” He added that it would take another six months to ramp up production to full daily capacity of 500 mt.

Mesco Gold is a subsidiary of Indian steelmaker Mesco and purchased the rights to develop and mine the Phum Syarung prospect from Canadian exploration company Angkor Gold Corp in 2013. As part of the $1.2 million sale agreement to Mesco, Angkor negotiated a net smelter royalty agreement that will see it receive a share of any gold extracted.

The royalty agreement is based on a sliding scale that depends on the price of gold. The royalty was previously about 7.5%, but falling gold prices have reduced it to a current rate of 4% to 5%.

Angkor Gold estimated that an underground mine built at Phum Syarung could produce 10,000 oz of gold a year over a 10-year mine life.