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REGIONAL ROUNDUP
Emerald making Okvau sparkle
Emerald Resources NL has cleared a
major development hurdle in its quest
to start construction at the Okvau gold
project in Cambodia.
Cambodia’s Ministry of Environment
last month granted an environmental
contract for Okvau, paving the way for
Emerald to complete its application for
an industrial mining licence as well as
finalise a mineral investment agreement
ahead of first construction works in 2018.
“It’s probably the biggest tick the pro-
ject needed to go forward,” Emerald
managing director Morgan Hart told Pay-
dirt.
“Obviously we’ve still got the funding
that we’re paralleling with the licencing
process and then we’ll be in a position to
seriously start talking about constructing
the project next year.”
Emerald’s mandated debt financier
was also close to completing its due dili-
gence of the project at the time of print.
Approval of the indicative terms of the
financing proposal effectively guaran-
tees funding for the majority of Okvau’s
$US98 million capital requirement.
The award of an environmental con-
tract also ensures the 1.14 moz project
remains at the head of the queue to be-
come Cambodia’s first major commercial
mine. Under the terms of the contract,
Emerald has provided surety for rehabili-
tation of the project area upon the mine’s
closure.
Okvau sits within the Phnom Prich
Wildlife Sanctuary and will need to be
declassed from its current “conservation
zone” to “sustainable use zone” to allow
development works to occur.
“Just over 40% of Cambodia is under
some kind of environmental restrictions,
but the Government allows projects to
be excluded from these zones in envi-
ronmentally sensitive areas if there is a
benefit to the rest of the community,” Hart
said.
“We’ve completed a full environmental
impact assessment on the project, it’s
gone through mediation status with the
Government and the environmental au-
thorities in Cambodia and we’ve come
down to an agreement where they’re
comfortable they can licence the project
and we can move it forward.”
An industrial mining licence cover-
ing up to 11.5sq km could be issued to
Emerald as early as December, with the
mineral investment agreement – allow-
ing companies to lock in the terms of a
project for the duration of its life, but not
PAGE 100 DECEMBER 2017 - JANUARY 2018 AUSTRALIA’S PAYDIRT
Emerald is seeking to begin construction of Okvau in 2018
required to develop or operate a mine –
is expected to follow soon after.
The acquisition of the first of the neces-
sary approvals for Okvau’s development
continues a bumper 12 months for Emer-
ald following its takeover of Renaissance
Minerals in November 2016.
Emerald released a DFS in May which
found the project could support a 2 mtpa
operation producing 106,000 ozpa over
an initial life of 7.2 years, based on a
maiden reserve of 14.3mt @ 2 g/t gold
for 907,000oz.
At a gold price of $US1,250/oz, Okvau
would generate a post-tax NPV of $US110
million, IRR of 40%, gross revenue of
$952 million, pre-tax operating cash flow
Okvau is set to become Cambodia’s first
major commercial mining operation
ASIA
of $US419 million and payback in 2.5
years.
C1 cash costs and AISC are estimated
at $US650/oz and $US731/oz respectively
over the life of mine.
During 2017, Emerald also expanded
its Cambodian footprint from 347sq km
to 1,500sq km after entering into agree-
ments to farm-in to five exploration li-
cences around Okvau.
“Okvau is a very, very robust project
with a lot of exploration upside to it,” Hart
said.
“This is Cambodia’s first big scale min-
ing project and I know the Government
is very keen to see it get away because
they want to attract other mining compa-
nies into Cambodia.”
Hart acknowledged he and other
members of the Emerald team had a
loyal market following because of their
history of successful mine development
stories, including Bonikro (Equigold) and
Duketon (Regis Resources Ltd), with
many expecting them to repeat the trick
at Okvau.
“There have been a lot of people over
the years who have been up to this pro-
ject to have look and I think it’s fair to
say they all leave impressed with the
prospectivity of the area and the region,”
Hart said.
“We’re not necessarily massive pro-
moters of stocks; we just like to do pro-
motion with actions rather than words.
We like to see licences granted, get the
banking done and then construct and op-
erate. We think that’s the best way you
can promote a company or a project.”
– Michael Washbourne