Japan teams with Aussie junior in Cambodia (March 28, 2008)

A Japanese government-run company has agreed to spend US$4.5 million over three years on two of Southern Gold‘s (SAU-A) Cambodian exploration projects.

Japan Oil, Gas and Metals National Corporation (JOGMEC) has signed a letter of intent to earn a 51% interest in the Phnum Khtong claim known as the Kratie North project and the Preak Khlong and O’Khtong claims which make up the Kratie South project. Both projects are located about 200 km northeast of the capital, Phnom Penh.

JOGMEC, which was formed in 2004 to secure a stable supply of oil, gas, metals and minerals for Japan, has already paid US$400,000 with the signing of the initial letter of intent. A concrete decision for a full joint venture agreement must be made by June 2008.

Southern Gold has a total of eight gold and base metals projects either wholly or majority owned in Cambodia. The company also has gold projects in three Australian states.

Managing director Stephen Biggins says the joint venture will allow the company to bring exploration plans ahead of schedule.

“The agreement ensures we can now commit to substantially larger drilling budgets to test early stage exploration discoveries made by our exploration team in Phnom Penh,” Biggins said in a statement.

Biggins also says the joint venture extends Southern Gold’s direct relationship with some key consumer economies for commodity metals.