Steppe Gold Provides Corporate Update

 Steppe Gold Limited (TSX: STGO) (OTCQX: STPGF) (FSE: 2J9) ("Steppe Gold" or the "Company") is pleased to provide a corporate update together with recent developments on its Phase 2 fresh rock expansion and its current operations at the ATO Gold Mine.

Steppe Gold is pleased to provide the following updates on the ATO Gold Mine (all figures in USD unless stated):

1. 2021 has been an active year for mining and stacking on the heap leach phase at the ATO Gold Mine and this has continued largely uninterrupted, in spite of strong headwinds from COVID since November 2020. With nearly 1.6mm tonnes stacked on the leach pad and a further 0.45m tonnes on the ROM pad, we are pleased to report strong gold and silver inventory build-up through the year.

2. Based on sampling grades on mined and stacked ore, together with estimated unrecovered ore on the leach pad or in the solution or circuit, we estimate that we have a total of approximately 34,000 oz of gold in inventory on the leach pad, ROM pad and in circuit.

3. Solid progress has been made on construction and installation of the new fixed crushing unit and we expect this to be operational by October 2021. Further to the Company's press release of March 24, 2021, the new crusher will have a crushing capacity of 1,000t/hr, more than three times the current crusher capacity, and it will fully support planned mining rates for the fresh rock phase where we have estimated throughput rates of greater than 2mt p.a. Importantly, this will also allow us to drive higher crushing rates in the remaining oxide phase with ample excess capacity in the plant.

4. The boiler house for winter leaching and production is near completion and is expected to be operational by September 2021.

5. As outlined in previous filings and news releases we have been experiencing supply chain issues since the outbreak of COVID 19 in November 2020. This has meant that the Company has experienced more pronounced delays in supply of key goods and services in the second quarter, with particular challenges at the China/Mongolia border crossing. While we are optimistic of a near term resolution, the delays could persist and further impact our production schedule in 2021.

6. We can report that the gold production at the ATO Gold Mine in Q2 2021 was 7,202 oz, with 6,558 oz sold at an average realised sale price of $1,852. While gold production was below our plan, primarily due to the COVID related reagent supply issues, we believe that with reagent supply resumed, we should still finish the year strongly albeit below our initial target. The Company considers this to be revenue deferral only and with higher crushing rates later in the year and strong plant capacity we are optimistic of strong oxide production through the next 24 months. The Company will issue its second quarter 2021 results on August 16.

7. The Definitive Feasibility Study for the fresh rock expansion is nearly complete and headline numbers are expected to be released in the upcoming weeks, with the final report to be filed shortly thereafter.

8. Exploration commenced in June at the ATO Gold Mine with one active drill rig on site and around 2,000m of drilling completed. Results are pending but initial analysis of step-out drilling is supporting the strong mineralization blocks across the licence.

9. Drill rigs will be mobilized to the Uudam Khundii project for maiden drilling on this exciting license in the coming weeks as we look to expand on the promising trenching results from 2020.

Further to the Company's news release of June 30, 2021, Steppe Gold received approval from the Financial Regulatory Commission of Mongolia in relation to its proposed cross-listing on the Mongolian Stock Exchange. The Company expects to raise MNT 5bn (approximately $1.75m) by issuing a total 1,111,110 common shares at a fixed price. Proceeds of this placement will be used for Phase 2 expansion at the Company's ATO Gold Mine. The Company plans to complete this offering in the second half of 2021.

Discussions on project finance options with Mongolian and International lenders continue and negotiations are well advanced on a first tranche of project debt with a leading Mongolian bank. With this due for closing soon, we expect to start work on a further tranche of debt with an international lending syndicate. We aim to have a comprehensive project debt package in place in the first half of 2022.

With an estimated 30% or more of Steppe Gold shareholders now based in Asian time zones, Steppe Gold has been considering for some time the option of a listing on a major Asian stock exchange. We continue to consult with our board and advisors on the options and will have more updates later in 2021.

President and CEO of Steppe Gold, Bataa Tumur-Ochir commented, "While we are glad to report zero COVID cases at our mine site and uninterrupted mining activities through the first half of 2021, the pandemic continues to cause delays in our supply chain. This has caused issues with our production which is below expectations in the second quarter. These issues are impacting most operating mining companies in Mongolia but we are optimistic that the China border issues will be resolved soon and we are working on contingency planning for further delays.

On a positive note, our mining and stacking has continued at or near planned rates and grade reconciliation remains above budget. We now have over 2mm tonnes mined or around 50% of the planned leach pad tonnage, with approximately 34,000 oz of gold in inventory. Together with net cash of approximately $10m, this provides strong support to our liquidity position and our balance sheet. We are also very excited to shortly announce the definitive feasibility study for our fresh rock expansion, following on from the very strong resource update released earlier this year. With heap leach production back on track soon, a new crusher to ramp up the stacking rate, and a positive new study for our fresh rock phase, we are very excited for the future."

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:

This news release may contain "forward-looking statements" within the meaning of applicable Canadian securities laws, including, without limitation, our statements related to: the terms, timing and potential completion of the cross-listing on the Mongolian Stock Exchange, satisfaction of regulatory requirements in various jurisdictions and the use of the net proceeds therefrom; the completion of the boiler house; the timing and potential completion of the Definitive Feasibility Study; and the expected mineralization across the ATO Gold Mine licence(s); and the impact of reagent issues on the Company's business and its growth plans. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties, and contingencies. These statements generally can be identified by the use of forward-looking words such as "may", "should", "will", "could", "intend", "estimate", "plan", "anticipate", "expect", "believe" or "continue", or the negative thereof or similar variations. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause future results, performance or achievements to be materially different from the estimated future results, performance or achievements expressed or implied by those forward-looking statements and the forward-looking statements are not guarantees of future performance. Steppe Gold's statements expressed or implied by these forward-looking statements are subject to a number of risks, uncertainties, and conditions, many of which are outside of Steppe Gold's control, and undue reliance should not be placed on such statements. Forward-looking statements are qualified in their entirety by the inherent risks and uncertainties surrounding the Company and its operations, including: changes in world commodity markets, equity markets, costs and supply of materials relevant to the mining industry, change in government; changes to regulations affecting the mining industry; risks inherent in the mining industry; and that future results may vary from historical results. 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

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