Thursday, April 19, 2012

Cambodia Is Now Open for Business: Richard Stanger

Resource investors are always looking for the next untapped region and Richard Stanger thinks he has found it. President and founder of the Cambodian Association of Mining and Exploration Companies, Stanger has been working to get the word out about Cambodia, a growing, stable country with the right geology for some big discoveries. In this interview with The Gold Report, Stanger gives an insider's view of the secrets to investing in Cambodia and explains why he's expecting a land rush.
The Gold Report: Cambodia's gross domestic product (GDP) is roughly $13.2 billion (B) annually, or around $1,000 a person, according to the Association for Southeast Asian Nations. It's clearly an impoverished nation, but until the last few years, the country has done little to develop its mineral wealth. Why?
Richard Stanger: Mainly because there was almost no information available about the geology of the country. Most of it was destroyed during the civil war. The country is a bit of a secret. People don't know much about Cambodia, or, in some cases, even where it is located. The infrastructure was pretty poor until recently. Roads were very difficult to travel. Telecommunications were really undeveloped. There was almost no infrastructure available for exploration.
TGR: How did you find your way to Cambodia?
RS: I was looking for a country that had the right geological setting and a good government with a legal system that is workable. Cambodia fit that bill.
TGR: What is the country's current GDP growth rate?
RS: It's averaging about 6.5% at the moment. I believe that it will be significantly higher this year. It may be double-digits.
TGR: What metals and minerals is Cambodia prospective for?
RS: It's one of those countries where there are not many outcrops. It's not so easy to walk around in the rocks and find things, but they're there. There's a lot of sediment covering the country. However, the country is very prospective for gold, copper and base metals, iron ore and other industrial metals such as zirconium, graphite and titanium. It covers a wide range.
TGR: What would tempt junior mining companies to invest and explore for metals there?
RS: The key to the country is that it's open for business and has a stable, committed government that wants to develop the economy. There is an economic and legal framework for companies and foreign investors to come and work. The country has great financial controls. It's easy to move money in and out of Cambodia.
The people are really excellent—honest, welcoming and hard working. I can't say enough about them. It's a very safe country. The operating costs are low. There is rapidly developing infrastructure, as well as infrastructure specifically related to the mining exploration industry. There are a number of drilling companies and geological services here.
TGR: Are there any assay labs?
RS: Two recently opened.
TGR: Going back 5 to 10 years, Cambodia is similar to what country?
RS: Some people keep saying Colombia, however Mongolia is a really good comparison. I went to Mongolia fairly early. Nothing actually happened there for five years and then it just started booming.
TGR: After decades of civil war, Cambodia is slowly finding its feet and has established democratic elections under a constitutional monarchy. However, according to Transparency International, Cambodia is the fourth most corrupt nation in the world. What are your thoughts on that?
RS: As an investor, I don't understand that rating at all. I'm kind of perplexed about it, really. That rating is purely perceptual and it's non-empirical. I actually think they just flat out got it wrong. And I'm not the only person that would say that.

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