Precious Metals

Steppe Gold Limited (TSX: STGO) (OTCMKTS: STPGF) (FRA: 2J9) (" Steppe Gold " or the " Company ") announces its financial results for the year ended December 31, 2021, as well as the filing of its restated annual financial statements for the periods ended December 31, 2020 (the " Restated Financial Statements ") and provides a corporate update. The Restated Financial Statements were prepared following a continuous disclosure review by Staff of the Ontario Securities Commission (the " OSC ") of the Company's disclosure records.

HIGHLIGHTS

Financial Results for the year ended December 31, 2021

  • Revenue for the year ended December 31, 2021 was $24,050 on sales of 12,899 gold ounces and 28,622 silver ounces with average realized prices per ounce of $1,837 and $24 respectively.
  • Operating income from mine operations, before depreciation and depletion was $12,435.
  • Consolidated Group Adjusted EBITDA for the year was $4,909.
  • As at December 31, 2021 cash and restricted cash amounted to $71,817; total bank and other debt was $77,920 for net debt of $6,103.

In conjunction with preparation of the Company's financial statements for the year ended December 31, 2021 and as part of a continuous disclosure review by Staff of the OSC in relation to the accounting for the Streaming Agreement, dated August 11, 2017 between the Company and Triple Flag Mine Finance Bermuda, Steppe Gold identified an error in how the arrangement has been reflected in the previously issued financial statements. The Company previously determined that the stream obligation was in substance a debt instrument (carried at amortized cost) with embedded derivatives (recognized at $nil value) linked to gold and silver commodity prices.

Upon further review of the arrangement the Company has determined that the arrangement should be accounted for in its entirety as a derivative measured at fair value through profit and losses. The Restated Financial Statements resulted in changes to revenue, the stream liability and fair value gains/losses related to the liability. The adjustments did not impact the overall net cash flows of the Company. The Company evaluated the significance of the corrections and determined the adjustments were material to the consolidated financial statements for December 31, 2021.

Steppe Gold has therefore restated its annual financial statements for the year ended December 31, 2020, as well as the associated management's discussion and analysis. Comparative figures for 2021 interim periods will also be restated in 2022 interim reports.

The Company's consolidated financial results for the year ended December 31, 2021 have been filed on SEDAR. The full version of the condensed interim consolidated financial statements and associated management's discussion & analysis can be viewed on the Company's website at www.steppegold.com or under the Company's profile on SEDAR at www.sedar.com .

All amounts are expressed in United States dollars unless otherwise noted.

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

Non-IFRS Performance Measures

EBITDA is defined as earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as adjusted earnings before interest, taxes, depreciation and amortization. Further details of Non-IFRS Performance Measures noted above can be found in the Company's management's discussion & analysis.

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

STGO:CA
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.

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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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