Adelaide, Sep 27, 2006 AEST (ABN Newswire) - An Australian resources company is to expand into Cambodia's minerals exploration sector in a search for gold and base metals under a Memorandum of Understanding (MoU) announced today.
It is the first overseas drive for Adelaide-based Southern Gold Limited (ASX: SAU) which has signed the MoU with the Cambodian Ministry of Industry, Mines and Energy Ministry.
The agreement covers 959 square kilometres of acreage enclosed within four tenements in the Kratie and Mondulkiri provinces in the east of Cambodia, a country which only in the past three years has accelerated moves to open up its mineral wealth to foreign investment.
"Our exploration objective is the discovery of world-class deposits of gold and base metals of the magnitude of Chatree and Sepon in neighbouring Thailand and Laos," Southern Gold's Chairman, Mr Ric Horn, said today.
"We plan an aggressive exploration program in Cambodia, but without reducing activity on our Australian projects," Mr Horn said.
"The four blocks are highly prospective for gold and base metals, contain numerous sites of current and prior artisinal mining and have returned sample assays showing values of up to 34g/tonne gold, 3% copper, 20% lead and 18% zinc.
"Significantly, our Cambodian tenements are contained within the Loei-Petchabun volcanic belt which hosts within the same Indo China region, such >US$1billion resources as the Chatree gold deposit in Thailand and the Sepon copper gold, Phu Bia gold and Phu Kham copper gold projects in Laos.
"Oxiana also has interests nearby with one tenement adjoining and others within several kilometres.
Mr Horn said the terms of the MoU provided Southern Gold with an initial six month window of opportunity to undertake early stage exploration activities and negotiate terms for subsequent exploration, development, and exploitation including royalties from any discovery.
First work on the tenements - to be 100% owned by Southern Gold - will comprise low impact exploration activities for target definition, and negotiations for exploration licences.
The Company has established an office in Phnom Penh and appointed Australian geologist, Mr Nicholas Steel, as General Manager - Cambodia.
"We are reviewing all potential funding options and joint venture discussions with a number of parties are in progress," Mr Horn said.
"The opportunity to invest in mining and exploration in Cambodia has only emerged in the past three years with the establishment of appropriate legislation and a regulatory structure.
"However, the country boasts a stable democracy, low sovereign risk and a rapidly emerging resources industry and is highly receptive to foreign investment.
"Western and other Australian explorers have recently targeted the country for both minerals and oil and gas and a major Australian bank has established a presence."
The expansion into Cambodia is the latest in a range of growth strategies for Southern Gold.
The Company last week announced that drill results from its joint venture with the world's largest uranium explorer, Mega, had identified significant indicators of "roll-front" style uranium mineralisation within a major new palaeochannel province in the Gawler Craton in the far west of South Australia.
Southern Gold has also recently acquired a package of base metals prospects in New South Wales including the 125-year old Eurow copper gold mine near Parkes. This project is to be extensively drilled by the Company in a new exploration program commencing in December.
Contact
Kevin Skinner
Senior Consultant
FIELD PUBLIC RELATIONS
231 South Road
MILE END SA 5031
Tel: (08) 8234 9555
Fax: (08) 8234 9566
Mob: 0414 822 631
kevin@fieldpr.com.au
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