Precious Metals

Steppe Gold Ltd. (TSX: STGO) ("Steppe Gold" or the "Company") announced that effective October 15, 2021, BDO Limited (the "Former Auditor") has been terminated as the independent auditor of the Company and Kingston Ross Pasnak LLP has been appointed as the successor auditor (the "Successor Auditor").

There are no "reportable events" (as such term is defined in National Instrument 51-102 - Continuous Disclosure Obligations ("NI 51-102")) in connection with the audits for "relevant period" (as such term is defined in NI 51-102) other than as described below:

  • the board of directors (the "Board") and audit committee of the Company (the "Audit Committee") is of the opinion there are disagreements (as such term is defined in NI 51-102) with respect to the application of accounting principles relating to stream obligations, equity instrument valuation and control of a subsidiary entity. The Audit Committee discussed such disagreements with the Former Auditor. The Company has authorized the Former Auditor to respond fully to inquiries by the Successor Auditor concerning the disagreements;
  • the Board and Audit Committee is of the opinion there is a consultation (as such term is defined in NI 51-102), whereby the Successor Auditor was consulted with respect to the application of accounting principles relating to the aforementioned disagreements with the Former Auditor. The consultation was conducted both orally and in written communication and was considered by the Company in reaching its decision with respect to the accounting and financial reporting issues. These communications considered the Audit Committee's positions on the aforementioned disagreements with the Former Auditor, and the Successor Auditor arrived in agreement with the position taken by the Board and Audit Committee. These communications also agreed with the positions as stated in the annual financial statements of the Company for the years ended December 31, 2020 and 2019, on which an unmodified opinion was issued on March 29, 2021, by a previous auditor. The Company has consulted with the Former Auditor concerning the aforementioned disagreements but has been unable to reach common ground; and
  • the Board and Audit Committee is of the opinion there is an unresolved issue (as such term is defined in NI 51-102), whereby the Former Auditor was unable to complete the review of the Company's Q2 financial statements despite the Company informing the Former Auditor of the reporting deadline and providing all requested information during the review period. The Audit Committee discussed the unresolved issue with the Former Auditor. The Company has authorized the Former Auditor to respond fully to inquiries by the Successor Auditor concerning the unresolved issue.

The change of the auditor and the recommendation to appoint the Successor Auditor was approved by the Audit Committee and the Board. In accordance with NI 51-102, the notice of change of auditor, together with the required letters from the Former Auditor and the Successor Auditor, have been reviewed by the Board and filed on SEDAR.

Steppe Gold Ltd.

Steppe Gold is Mongolia's premier precious metals company.

For Further Information, please contact:

Bataa Tumur‐Ochir, CEO and President

Shangri‐La office, Suite 1201, Olympic street
19A, Sukhbaatar District 1,
Ulaanbaatar 14241, Mongolia
Tel: +976 7732 1914

The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.


News Provided by GlobeNewswire via QuoteMedia

Steppe Gold

Steppe Gold

Overview

Steppe Gold (TSX:STGO) is a precious metals development company and gold producer in Mongolia. The company owns the Altan Tsaagan Ovoo (ATO) and the Uudam Khundii (UK) gold projects in Mongolia.

Steppe Gold has recently commenced gold production at its flagship ATO project. The company has mined, crushed and stacked approximately 715,000 tonnes of ore with an average grade of approximately 2 g/t gold to date. As of June 2020, Steppe Gold has produced and sold a total of 15,389 ounces of gold and 4,978 ounces of silver generating US$25.3 million. The company is on pace to meet its production goal of 60,000 ounces of gold in 2020.

Now that the company has commenced gold production, Steppe Gold intends to continue its feasibility study into the development of the much larger fresh rock resource underlying the current mining operation. The proposed development of a cyanide in leach operation for processing fresh rock is expected to have a life of mine of approximately 12 to 15 years.

Existing defined fresh rock resources are expected to be supplemented by the new discovery of high-grade gold and silver mineralization on the Mungu trend. Steppe Gold’s exploration is showing that the high-grade Mungu discovery is semi-continuous to the structurally-controlled mineralization drilled at the ATO 4 deposit and that significant resource expansion is possible.

The UK project is the first-of-its-kind joint venture (80/20) between Steppe Gold and the Bayankhongor Provincial Government. The company has completed an initial exploration program on this project consisting of IP and magnetic surveys, as well as rock chip and soil geochemical programs. The program resulted in four discoveries that the company plans to further explore with an extensive program of trenching and drilling in the near-term.

Steppe Gold is continuing to asses a number of additional opportunities to acquire exploration licenses and mining projects across Mongolia.

Steppe Gold’s management team has a track record of success in Mongolia. Keeping projects on track and under budget is Steppe Gold’s General Manager of Processing Grant Smith. Smith has experience in constructing and operating heap leach operations and most recently worked on the Tujuh Bukit gold heap leach project in East Java, Indonesia.

Steppe Gold’s Company Highlights

    • Steppe Gold is a gold producer in Mongolia.
      • Initial capital cost of approximately US$20 million, average cash costs less than US$500 per ounce.
    • Approximately 875,225 tonnes of ore with an average grade of 2 g/t gold has been mined to date at the ATO project
    • On pace to hit 2020 production goal of 60,000 ounces of gold
  • US$28 million gold and silver streaming agreement with Triple Flag Mining Finance Bermuda Ltd. in place.
  • Updated resource estimate and feasibility study underway for the larger fresh rock project underlying the current mining project at open cuttable depths. This larger Phase 2 project would involve the construction of a grinding and CIL circuit and would have an expected life of mine of 12 to 15 years and an annual production profile that could reach approximately 150,000 ounces on a gold equivalent basis.
  • Joint venture partnership in place for the UK project with the Mongolian government.
  • Management has a proven track record of success in Mongolia.

Mining in Mongolia

Mongolia is known as one of the last frontiers for large scale mining projects, offering investors and mining companies alike an interesting opportunity. With the success of Oyu Tolgoi, a tier one producer and one of the largest copper mines in the world, Mongolia has demonstrated the geologic potential for mineral wealth. Mongolia had a GDP of US$11.43 billion in 2017 and has an annual growth rate of approximately six percent. The growth of the economy is supported by commodity exports, such as copper and coal, improved business sentiment and the implementation of a government-led economic adjustment program.

The World Bank believes that Mongolia’s growth outlook is positive and is supported by the mining and manufacturing sectors. Gold exploration accounts for 45 percent of the mining sector and 2.6 percent of the country’s GDP, leading to the implementation of policies and programs to help promote gold mining.

In March 2017, the Mongolian government signed a Foreign Investment Promotion and Protection Agreement (FIPA) with Canada. The agreement provides Canadian investors operating in Mongolia with a legal framework that is expected to help bring greater predictability and certainty to their investments. Canada is a significant investor in Mongolia and has invested approximately $6.4 billion in the country.

Mongolian Assets

Steppe Gold's Mongolia Assets

Steppe Gold’s ATO Gold-Silver Mine

The 5,493-hectare ATO gold-silver project is located in the Dornod province of eastern Mongolia. Steppe Gold’s mining license for the project is fully-permitted for 30 years.

Steppe Gold commenced production at the ATO project in December 2019. As of July 2020, Steppe Gold has produced and sold a total of 15,389 ounces of gold and 4,978 ounces of silver which generated a net cash flow of US$25.3 million. The company has mined, crushed and stacked approximately 715,000 tonnes of ore where leaching continues.

Steppe Gold remains on pace to produce 60,000 ounces of gold in 2020 at cash costs of circa $500 per ounce from the ATO Mine. The company plans to complete the feasibility study for its Stage 2 expansion project at the ATO mine moving forward. The expansion targets an increase in gold production to 150,000 tonnes per annum from underlying fresh rock ores.

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