Australian firm bets on Bavet + More business with Oz sought + Ron Heeks

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Australian firm bets on Bavet

Wed, 28 May 2014

Eddie Morton

Australian-listed Cell Aquaculture (CAQ) – a onetime a marine technology company – has purchased a casino on the Cambodia-Vietnam border in a bid to generate much-needed revenue after nearing bankruptcy in 2013.

On May 26, CAQ announced in a statement to the Australian Stock Exchange that it had hosted a soft opening for the Roxy Casino, which is located 200 metres from the border crossing in Bavet town, after a full renovation and refurbishment of the once-defunct operation.

Richard Soo, director of CAQ, said the renovation had cost the firm US$1.2 million thus far.

“We have had a team here since early January, building. Then, with furnishing and hiring of more personnel, we have incurred another US$250,000 cost. The costs are in line with our budgeted plans of US$1.5 million to US$2 million,” he added.

Soo, who also has interests in Malaysian playing-card maker Leisurematics, said he anticipates making up the initial investment in Roxy within the first six months of its operations, following a grand opening slated for August.

“As per the requirements of the ASX, CAQ will adhere to full disclosure of the casino’s financial operations,” he said.

According to the ASX filing, the new Roxy Casino will operate 24 hours a day, with 15 traditional gaming tables, eight online gaming tables, sports betting and 20 hotel rooms.

CAQ was placed into administration and suspended from trading on the ASX in November 2012 after posting a A$3.5 million (US$3.2 million) loss for the 2012 financial year. In an effort regain its position, CAQ in July last year issued an additional 250 million new shares, which in turn generated A$300 million for the company. CAQ was reinstated to the ASX on September 20, 2013.

“When the company’s owners realised current operations were no longer feasible or viable, they decided to look for a new direction for the firm. And with our China operations only 46 per cent complete so far, the company needed a more immediate source of income,” Soo said.

In March, CAQ agreed to purchase the Roxy Casino along with the rights to a free-trade zone in China for A$83 million, to be paid in the form of 553 million CAQ shares. The deal is expected to be finalised by July.

But the Australian company’s casino venture may not be the quick-fix it set out for.

Hor Chenda, deputy head of Bavet International Border Gate, said yesterday that the Roxy Casino had gone bankrupt prior to CAQ’s purchase of the property due to slumping gambler numbers crossing the Vietnam border.

“I have observed that the number of gamblers arriving here [bavet] has declined, and as a result a few casinos have been faced with shutting down operations,” Chenda told the Post, adding that there are currently 10 casinos still operating in the border town.

“Most gamblers come from Vietnam. Historically, as a share of the number of Vietnamese crossing the border, around 40 per cent come for gambling. But that has declined noticeably recently.”

Along with the Roxy Casino project and as part of the March agreement, CAQ purchased the rights to Haikou Free Trade Zone on Hainan Island, in southern China.

CAQ stock spiked mid-March following the firm’s casino and Haikou Project announcement reaching $0.129 per share. At yesterday’s ASX close, CAQ’s share price was stable, trading at $0.115 cents per share.

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More business with Oz sought

Tue, 27 May 2014

Chan Muyhong

The Ministry of Foreign Affairs yesterday urged Cambodia and Australia to increase trade ties and encouraged greater investment from the Pacific country.

Speaking at a seminar in Phnom Penh to mark the 40th anniversary of ASEAN-Australia relations, Soeung Ratchavy, secretary of state at Ministry of Foreign Affairs and International Cooperation, said that in the wake of a recent fall in overall trade, the two countries should set higher targets for their economic relationship.

“Foreign direct investment from Australia to Cambodia in 2013 stood at $2.89 million. So, in my opinion, we need to do more on trade and investment,” she said.

“In this regard, I think Cambodia and Australia need to set out more ambitious bilateral trade and investment and tourism flow targets in order to maximise our economic trade and tourism cooperation.”

Agriculture and tourism are two sectors that could especially benefit from Australian investment, Ratchavy said, and called on the government to provide incentives for investment in the fields.

Grant Knuckey, CEO of ANZ Royal, said yesterday that the investment environment in Cambodia was healthy and likely to improve when new investment laws come in
to place.

“Cambodia is seen as a country where a good idea can find a market, with a relatively simple set-up process and a liberal regulatory environment,” he said.

“It is always tempting to pigeon-hole potential Australian investment into areas like mining where it has a global profile, but the truth is there are a multitude of sectors that Australian companies can create and are creating value [in] here,” he added.

On the trade front, figures from the Ministry of Commerce show that bilateral trade between Cambodia and Australia increased 39 per cent last year, hitting $75.45 million from $54.31 million in 2012.

Ken Ratha, spokesman for the Ministry of Commerce, said yesterday that the government welcomes the opportunity to boost trade with countries within the Asia-Pacific region.

“Australia is a potential market for Cambodia in trade partnerships within the agriculture sector,” he said.

http://www.phnompenhpost.com/business/more-business-oz-sought

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Cambodia mining needs a success

Fri, 30 May 2014

Eddie Morton

While a handful of foreign-owned mining firms continue to spend millions scouring the provinces for valuable mineral deposits, not one has commenced mining. Geopacific Resources, an Australian firm with copper and gold exploration projects in Cambodia and Fiji, under a joint venture agreement with Royal Group, has for the past 18 months been exploring land within Preah Vihear province. This week, managing director of Geopacific, Ron Heeks, spoke with the Post’s Eddie Morton about Cambodia’s evolving mining sector and the gamble that is mineral resource exploration.

Managing director of Geopacific Resources Ron Heeks. Geopacific, with joint-venture partner Royal Group, has mining exploration projects in Preah Vihear province. PHOTO SUPPLIED

What lured Geopacific to Cambodia in the first place?
Cambodia was targeted because it has prospective geology, the rocks are the right type and right age, and there are good signs of gold and copper identified in the region.

Cambodia is a growing economy and has an evolving mineral industry that has had little systematic exploration.

How is exploration going so far?
We are still in the early stages of exploration, having commenced exploration 18 months ago. Our initial results have been promising, but there is a long way to go. Exploration is time-consuming and requires a large amount of information in order to understand the region properly. We’re focused on the Preah Vihear region, and our field camp is at Chaeb district. Our licence covers 158 square kilometres.

If everything went as fast as possible, we could see extraction two years down the track. You couldn’t do it any quicker than that. So far, we have invested about $3.5 million into exploring Cambodia.

Was it a challenge entering the mining sector here?
Most developing countries suffer from a lack of industry-specific knowledge of mining, including the risks, costs and time involved to discover and bring an operation into production. Having no success stories coming out of Cambodia is a challenge because people simply don’t know of the place. If we were talking about a place like Ghana, people are aware of lots of success stories.

Because of this, security of tenure is one of the most critical aspects of working in any region. It is really a gamble. You can go to an area and spend millions of dollars searching and then walk away with nothing.

Consequently, exploration projects are hard to get funding for. And to be frank, the past couple of years have been the hardest I have experienced in terms of raising funds.

Cambodia, however, is an excellent place to work, and it has no specific challenges except that they do not have a mining history from which to base some decisions upon.

What advice do you hope the Ministry of Mines and Energy took from its recent trip to Western Australia?
Cambodia can learn a considerable amount from developed mining countries such as Australia. Managed well, the industry can bring numerous benefits, especially in remote areas. Security of tenure is the most critical aspect. It is impossible to attract investment if there is even a hint that the asset may be lost. This is why you are seeing a move away from some even very mineral-rich countries.

Clear concise laws that do not change are critical and Cambodia is well advanced along this path. Keeping everything transparent from both the mining company and government sides is very important also, so investors know exactly what they are dealing with.

The government said it is considering introducing more lenient tax laws for mining firms, off the back of Australia’s now-scrapped mining-tax scheme. Do you think this is a good move?
The increasing of mining tax dramatically curbed mineral investment in Australia and was removed by the next government. Countries new to exploration need to encourage companies to come, and tax benefits early on can achieve this, combined with clarity of regulation. That Cambodia is looking at these issues is an excellent sign and should help attract more companies into the country.

With reform, do you think Cambodia’s mining sector will prosper in the coming years?
Yes, definitely, if they are internally competitive and transparent. The country is underexplored, and most exploration operations are at very early stages. Few companies are working in this space at present, as the industry is suffering from long-term effect of the global financial crisis of a few years ago. I would not expect a rush, but a slow, steady increase in companies looking. A success story will assist greatly to help new players to look at Cambodia for investment.

And while most neighbouring countries are ahead in terms of regulation and in regards to the amount of on-ground work, any success arising out of all Asean countries would assist in bringing more companies into the region.

This interview has been edited for length and clarity