Gold

Steppe Gold Ltd (TSX: STGO) (OTCQX:STPGF) (FSE:2J9) ("Steppe Gold" or the "Company") is extremely pleased to announce that it has reached agreement for up to $65m (all figures in US$ unless otherwise stated) in debt capital (the "Loans") to fast track its phase two construction of the ATO Gold Mine.

Of the total $65m in Loans, MNT 170 billion or approximately US$59.7m (the "2021 Gold-2 Loan"), has been funded through the Gold-2 National Program, facilitated through the Central Bank of Mongolia. The 2021 Gold-2 Loan proceeds were advanced during the third quarter to Steppe Gold by the Trade and Development Bank of Mongolia ("TDBM").

The 2021 Gold-2 Loan is a special purpose covenant-light loan, with a three-year term at 9% interest and full prepayment rights without penalty. All interest amounts are paid monthly. Draw down of the loan proceeds will commence on completion of registration of security, expected later this month.

Further the Company has reached agreement for an additional US$5m for allocation to working capital to be funded directly from TDBM in the form of a prepaid gold sales loan (the "TDBM Gold Loan"). The TDBM Gold Loan will be repaid over a period of 12 months based on gold sales, with repayments in cash equivalent at MongolBank gold prices.

With its Phase 2 Expansion headline numbers announced on October 27 and construction already commenced on the expanded crushing circuit the Company will now allocate the proceeds of the Gold-2 Loan to fast track the construction of the Phase 2 Expansion Project.

Bataa Tumur-Ochir, the President and CEO of Steppe Gold, commented "Following on the recent completion of the Feasibility Study for the Phase 2 expansion of the ATO Gold Mine, we are now very proud to announce this landmark US$65M financing package. With over 170 bn in funding from the Central Bank of Mongolia, Steppe Gold has cemented its position as Mongolia's premier precious metals group.

The Company is highly encouraged by the trust placed in us by leading Mongolian financial institutions. This is a tremendous vote of support for Steppe Gold, for the Mongolian mining industry and will add value to Mongolia's export revenue and foreign reserves position.

The Phase 2 Expansion will generate an additional 300 jobs and further solidify our role as the one of the largest investors and employers in the region. The Phase 2 expansion has all major permits to fast-track the development and construction of the expanded crushing circuit is nearing completion.

While Steppe Gold has faced significant headwinds from COVID lockdowns, border closing and supply chain issues, the Company continued full scale mining and stacking operations in 2021. As of November 1, 2021, Steppe Gold has a total of over 2.2m tonnes of ore stacked on the leach and ROM pads, with approximately 45,000 ounces of gold recoverable in the short term.

Steppe Gold is proud that 100% of its suppliers are Mongolian and 99% of employees are Mongolian nationals. Within the framework of its social responsibility agenda, the Company commenced a scholarship program, providing financial support to over 1,000 students since 2017.

Steppe Gold believes 2022 will be the year of rapid growth and expansion with full production and further financing for the Phase 2 expansion project. Steppe Gold wants to thank all of its stakeholders for their support and for placing their confidence in us as Steppe Gold focuses on building and delivering sustainable and tangible value. "

Enkhtaivan Ganbold, the Deputy Governor of the Central Bank of Mongolia commented, "the Central Bank of Mongolia is supporting leading responsible mining companies to accelerate gold production in Mongolia. Gold production and export plays a vital role in the Mongolia economy, as it supports our foreign reserves and export capacity. We are pleased to expand our support for Steppe Gold's Phase 2 Expansion through the Gold-2 National Program of the Government of Mongolia."

Mr. Banzragch Оrig, First Deputy CEO of TDBM commented, "we are very pleased to support leading Mongolian gold producers in the Gold-2 National Program. Steppe Gold continues to be a great success story in the Mongolian mining industry, showing leadership in safety, community support and environmental stewardship. We are glad to support Steppe Gold's exciting Phase 2 expansion plans."

About the Gold-2 National Program

The Gold-2 National Program aims at ensuring the sustainable growth of the economy, increase foreign exchange reserves, and support the gold industry to increase central bank's gold purchase, maintain legal stability, and promote environmentally responsible mining. Several ministries including the Ministry of Mining and Heavy Industry, Ministry of Environment and Tourism and Central Bank of Mongolia, commercial banks and the private sector are cooperating as part of the program.

Steppe Gold Limited:
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

Cautionary Note Regarding Forward-Looking Statements:
The above contains forward-looking statements that are subject to a number of known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those anticipated in our forward-looking statements. Factors that could cause such differences include: changes in world commodity markets, equity markets, costs and supply of materials relevant to the mining industry, change in government and changes to regulations affecting the mining industry. Forward-looking statements in this release include, among other things, statements regarding the trading of the Common Shares and business, economic, and political conditions in Mongolia. Although we believe the expectations reflected in our forward-looking statements are reasonable, results may vary, and we cannot guarantee future results, levels of activity, performance or achievements. We disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law.

The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the content 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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