US firm partners up for gold exploration in Sanakham
Development of a gold mine in Sanakham district of Vientiane province may see rapid progress after the project developer enlisted a new business partner to explore the mining site
The Catalyst Resource Group announced yesterday that it has signed a definitive agreement to acquire an 80 percent equity interest in Laos Minerals Mining, which owns a 68sq km gold concession in Somsanouk village.
The agreement will speed up exploration of the gold deposit in Sanakham district, one of the top potential gold mines in Laos.
According to Marke****ch, part of Dow Jones' Consumer Media Group, the US company will provide its Lao partner with sufficient financial support to continue to conduct further exploration and development of the gold mine in the San 8 and San 60 areas, some 150km north of Vientiane.
According to the media report, exploratory activities on these concession areas were previously carried out by Newmont, BRGM and more recently by Kingsgate Consolidated Ltd. The explorations have shown potential minable gold vein deposits aggregating several hundred thousand ounces.
There is also the possibility of finding up to one million or more ounces of minable gold and a large bulk of base metal deposits. At today's gold price, the total estimated value of these concession areas could range from US$510 million to US$1.7 billion.
The closing of this transaction is scheduled to occur on April 16, 2012, but no later than May 30, 2012. Catalyst Resource Group plans to carry out additional mapping, trenching, sampling and follow-up geophysics to define drill targets. It will then drill these targets in collaboration with a select regional mining contractor or a joint-operation partner.
Catalyst Resource Group is engaged in innovative processing technologies to extract and process gold and platinum group metals while Laos Minerals Mining is a Nevada corporation devoted to the exploration and development of selected mineral deposits in Laos.
Lao miners have for many years considered Sanakham district a top potential area for gold ore deposits, following similar explorations in Vilabouly district of Savannakhet province and Attapeu province.
People living in Sanakham district have long practiced traditional gold extraction activities.
One of the major challenges for mining in this area is that the gold deposits are situated deep underground, driving up investment requirements.
However, the rising price of gold in world markets is expected to attract foreign investment in the project's development, according to Lao gold miners who once explored Sanakham.
At present, the price of gold in world markets is above US$1,700 per ounce and is expected to rise further because people consider investment in the precious metal to be a reliable form of saving amid global economic uncertainty and a weak US dollar.
The International Mining Council has urged the Lao government to explore additional gold deposits in Laos so that it can continue to export gold once mining projects in Phoukham and Sepon are depleted, in order to ensure sustainable economic growth.
Economic growth in Laos is largely driven by the resource sector, most notably mining and hydropower.
