Canadian mining company Angkor Gold has announced that Cambodia's Ministry of Mines and Energy has issued a licence for Mesco Gold’s Phum Syarung mine.

Approval of the licence on 12km² represents the final step for Mesco Group-owned Mesco to bring its Phum Syarung gold mine into production.

In 2013, Mesco Gold had signed an agreement to acquire the rights to develop and mine Phum Syarung from Angkor.

In return, Angkor negotiated a net smelter royalty agreement to get a share of any gold that would be extracted from the mine, the Phnom Penh Post reported.

"A new stage in the evolution of the mining industry in the country has begun."

Mesco Group chairman JK Singh said: “With the grant of the first fully approved mining licence in Cambodia to Mesco Gold, a new stage in the evolution of the mining industry in the country has begun, which so far was limited to exploration only."

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Angkor will retain a sliding scale 2% to 7.5% net smelter return (NSR) on the project.

Angkor Gold operations vice-president JP Dau said: “This is a very important transaction for Cambodia.

"We are now working with our partners Jogmec and Blue River towards building a better understanding of our joint-venture projects with an end-goal of securing future income streams for the company."

Angkor’s six exploration licences in Cambodia cover 1,352km², which the company has been exploring over the past six years.