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Steppe Gold Ltd. (TSX: STGO) (OTCQX: STPGF) (FSE: 2J9) (" Steppe Gold " or the " Company ") is pleased to announce its financial results for the year ended December 31, 2023.
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Steppe Gold
Overview
ATO gold mine in Mongolia
Steppe Gold (TSX:STGO) is a gold producer and precious metals explorer headquartered in Mongolia, with a global resource of 4.5 million ounces (Moz) gold equivalent, a leadership team with a strong track record in resource development, and a capital structure backed by industry leading investors.
The company owns the Altan Tsaagan Ovoo (ATO) and the Uudam Khundii (UK) gold projects, both in Mongolia, and the Tres Cruces gold project in Peru.
Steppe Gold commenced Phase 1 gold production at its 100 percent owned flagship ATO project in April 2020. The asset, which consists of four significant deposits including the high-grade Mungu deposit, has a current resource of more than 1.7 Moz gold equivalent, of which 1.32 Moz will be recovered in 14 years.
In January 2024, Steppe entered into an agreement to acquire Boroo Gold, a leading gold producer in Mongolia, with an average production of 60,000 oz per year with a mine life beyond 2030. Once complete, the acquisition will bring Steppe's Phase 1 annual gold production from 30,000 to 90,000 oz.
ATO's Phase 2 expansion project is fully funded, following a $150-million financing deal with the Trade and Development Bank of Mongolia. Commissioning and production for Phase 2 is expected to begin in the final quarter of 2025. With 1.23 Moz in gold equivalent resource to be recovered over 12 years, this second phase is expected to produce more than 100,000 oz of gold equivalent annually, generating $2.2 billion in revenue.
The UK gold project is a first-of-its-kind joint venture between Steppe Gold and the Bayankhongor Provincial Government, wherein Steppe Gold owns 80 percent of the 14,400-hectare property. Initial results from trenching at the Milky Way and the Altan Soum prospects highlighted a mineralized system of at least 700 meters in length and up to 12 meters wide with individual meter sampling results up to 1.49 grams per ton (g/t) gold, 450 g/t silver, 2.98 percent copper, 3.98 percent lead and 0.31 percent zinc.
Steppe Gold is continuing to assess a number of additional opportunities to acquire exploration licenses and mining projects across Mongolia, led by a management team with a track record of success in the country.
With an eye for opportunities beyond Mongolia, Steppe completed the acquisition of Anacortes Mining in 2023, which positions the company for more growth with the development of the high-grade Tres Cruces oxide project in Peru. The project is located approximately 10 kilometers from the Lagunas Norte mine. Total gold production at Tres Cruces is expected at 481,000 ounces over a 7-year mine life, with a US$158-million after-tax NPV (5 percent) at US$1,700, and after-tax IRR at 30.9 percent.
Company Highlights
- Precious metals producer based in Mongolia with a total resource of 4.5 Moz gold equivalent
- Currently in Phase 1 production at 100 percent owned ATO gold mine, and fully funded for Phase 2 expansion
- Game-changing 2024 acquisition of Boroo Gold, effectively increasing current production from 30,000 to 90,000 oz per year and making Steppe Gold one of the leading gold producers in Mongolia
- A joint venture partnership is in place for the UK project with the Mongolian government
- Management has a proven track record of success in Mongolia
- Following the acquisition of Anacortes Mining on June 28, 2023, Steppe Gold added the Tres Cruces gold project to its growing portfolio. PEA results for this project were announced in August 2023.
- Holds one of the largest exploration land packages in Mongolia and one of the world’s highest-grade deposits in Peru
Key Projects
Mongolian Assets
ATO Gold Mine
The multi-phase, 5,493-hectare ATO gold-silver project is located in the Dornod province of eastern Mongolia and fully permitted for 30 years. Steppe Gold commenced gold production at the ATO project in April 2020. The ATO deposit contains mineral reserves of 29.1 Mt at 1.13 g/t gold and 12.42 g/t silver. It contains approximately 1.7 Moz gold equivalent in reserves, of which 1.32 Moz will be recovered over 14 years, including oxide. To date, the mine has produced 100,166 oz of gold and 151,000 oz of silver. Additional exploration programs focusing on oxides are on-going.
Exploration
Centerra Gold (TSX:CG), the prior operator and owner of the ATO project, spent over US$25 million on exploration, including the completion of 67,000 meters of drilling and 28,421 meters of trenching. Since acquiring the property, Steppe Gold has completed an additional 20,000 meters of drilling.
ATO 4 and Mungu Discovery
The Mungu discovery is located northeast of the current resource from the ATO 4 deposit. The discovery is located on a 20-kilometer-long structurally controlled, north-trending, mid-sulfidation epithermal gold-silver system. Steppe Gold believes that the ATO 4 deposit may be semi-continuous to the mineralization at the Mungu discovery. The ATO 4 Deposit currently remains open along strike to the north and at depth.
UK Gold Project
The 14,397-hectare Uudam Khundii property consists of one exploration license and is located 800 kilometers southwest of Ulaanbaatar, Mongolia. The property is an 80/20 joint venture with the Provincial Government of Bayankhongor.
Initial results from 18 trenches for 933 meters at the Milky Way Prospect and the Altan Soum Prospect highlighted a mineralized system of at least 700 meters in length and up to 12 meters wide with individual meter sampling results up to 1.49 g/t gold, 450 g/t silver, 2.98 percent copper, 3.98 percent lead and 0.31 percent zinc.
The property is located between Erdene Resource Development Corporation’s (TSX:ERD) Bayan Khundii gold discovery and the Altan Nar epithermal gold deposits.
Management Team
Bataa Tumur-Ochir - Chairman, CEO and Member of the Board
Bataa Tumur-Ochir is responsible for new business acquisitions, development, government and community relations and daily operations in Mongolia. He has strong relationships with all levels of government in Mongolia and was recently appointed independent advisor to the Ministry of Mining and Heavy Industry responsible for foreign investment and promotion.
He is currently a director at GCD Mongolia and CEO and executive director of ASX-listed Wolf Petroleum. Under his guidance, Wolf Petroleum was awarded the “Operator of the Year Award” from the Petroleum Authority of Mongolia, and today, Wolf Petroleum is recognized as the fastest-growing petroleum exploration company with the largest petroleum exploration acreage in Mongolia. He holds a bachelor’s degree in business administration and graduate certificates in international business and marketing from Australia and Singapore.
Tumur-Ochir is a founding director of Steppe Gold and he has led the company as CEO since December 2019. He is also now the largest shareholder of the Company, on a partially diluted basis.
Byambatseren Tsogbadrakh - President
Byambatseren Tsogbadrakh is a founding member of Steppe Gold. A Mongolian national, she has held progressively senior positions in the company over the last few years.
Jeremy South - Senior VP and CFO
Jeremy South has been a director of Steppe Gold since March 2017. He has over 33 years of experience in M&A, capital markets and private equity in Europe, North America and Australia, including senior positions in investment banking at Deutsche Bank, NatWest Markets and Deloitte. For 10 years, he was a Global Leader and Mining M&A Advisor at Deloitte.
Based in Beijing for four years, he advised leading Asian trading houses and financial investors on mining M&A, financing and strategy, and he has worked with some of Asia’s largest companies. He acted as chairman of Aldridge Minerals Inc. up until its recent sale to Trafigura Ventures. South is a chartered accountant and holds a Bachelor of Economics from Monash University (Australia). He holds the ICD.D designation as a graduate of the Institute of Corporate Directors.
Enkhtuvshin Khishigsuren - VP Exploration
Enkhtuvshin Khishigsuren has over 30 years of Mongolian mineral exploration experience. He spent the first 10 to 12 years of his career at Central Geological Expedition doing regional geological mapping in various areas of Mongolia, followed by seven years as senior exploration manager on the exploration of precious metal in Mongolia for Harrods Minerals.
Since 2005, he has been running his own company, Erdenyn Erel, which provides exploration and consulting services to western exploration and mining companies. He is responsible for identifying targets and properties based on his knowledge and experience. His experience has resulted in the discovery of several prospective gold and copper deposits in Mongolia; such as the multimillion-ounce gold deposit Olon Ovoot, the Zuun mod molybdenum porphyry deposit and the Shand copper porphyry deposit. He holds a bachelor's degree in geological exploration from Azerbaijan State University and a Master’s in geological science from Shimane University, Japan.
Patrick Michaels - Director
Patrick Michaels is the Chairman of Zuri-Invest AG and the Chairman of Asty Capital AG in Zurich, Switzerland. He has been involved in numerous financings of gold mines in North America, among others. He is a well-respected financial adviser and fund manager throughout Europe.
Michaels has extensive experience in the fields of mining finance, fund management and asset allocation. He has a background in law and economics and did his training in the areas of private banking and investment research at UBS in Zurich. Additionally, he attended post-graduate courses at the Colorado School of Mines in Golden, Colorado.
Dr. Batjargal Zamba - Director
Dr. Batjargal Zamba has over 35 years of experience working for the government in Mongolia, dealing with issues of environmental protection and climate change. He was the Minister of the Environment of Mongolia from 1990 to 1996 and Director General of the National Agency for Meteorology, Hydrology and Environmental Monitoring from 1996 to 2001. Dr. Batjargal has experience in working outside of Mongolia due to his engagement in international bi-and multilateral cooperation activities.
He was the Ambassador of Mongolia to Japan from 2001 to 2005. Between 2005 and 2011, he worked in New York as a Representative of the World Meteorological Organization (WMO) to the UN. Since 2014, he has served as an independent consultant on climate change and the development of green policy for public institutions and non-profit organizations. He was also an advisor at the Office of the President of the United Nations Environmental Assembly (UNEA) in Ulaanbaatar (2014 to 2016). He received his Ph.D. in physics and mathematics in 1978 from the Hydrometeorological State University, St.Petersburg, Russia.
Batukhuu Budnyam - Director
Batukhuu Budnyam is a successful entrepreneur and financial expert who has extensive experience in the banking and finance sectors in Mongolia. Until recently, Budnyam served as Advisor to Chinggis Khaan Bank. Prior to joining Chinggis Khaan Bank, he was Managing Director of Organic Solutions Mongolia LLC and previous to that, he was Managing Director of MFS Capital LLC. Budnyam is a Mongolian native and speaks fluent English, Russian and German. He has a Bachelor’s Degree in Economics from the National University of Mongolia.
Sereenen Jargalan - Director
Sereenen Jargalan has been a professor at the Mongolian University of Science and Technology since September 2003 and head of the Department of Mineral Exploration since 2011 where she teaches ore geology and metallogeny to bachelors, masters and doctorate students and supervises Ph.D. student research projects. She has a Ph.D. and Master’s in Earth Science from the Institute of Mineralogy, Petrology and Economic Geology at Tohoku University in Japan, focused on petrology of igneous rocks and a Bachelor of Mineral Exploration from the Mongolian Polytechnical University.
She completed postdoctoral work focused on the REE potential in Mongolia at the Mineral Resources Research Group, Institute for Geo-Resources and Environment and the National Institute of Advanced Industrial Science and Technology, Japan. She has co-authored or contributed to over 50 academic books, articles and other publications. She has been the recipient of numerous academic awards and honors in both Magnolia and Japan.
Steve Haggarty – Director
Steve Haggarty is the Managing Director of Haggarty Technical Services Corporation and a registered member of the Professional Engineers Ontario. He has over 35 years of industrial experience both on-site and at a corporate level, involving several precious metal and copper producers, with a background in project design, commissioning, start-up, metallurgy, process optimization, project management, reclamation and closure.
With a mining career spanning nearly four decades, Haggarty’s industry experience includes 24 years in operations and 14 years in corporate and EPCM-related roles. Most recently, he was Senior Director for the Metallurgy at Barrick Gold Corp. In this role, he was responsible for operational performance improvements, defining GeoMet models, processing strategy and risk mitigation. Haggarty has worked at multiple mine sites around the world, including as General Manager of Barrick Gold’s Veladero heap leach project in Argentina. He is considered a technical leader in heap leach processing, implementation and optimization.
Maria Lerner – Director
Maria Lerner has operated a private tax accounting firm since 1986 and possesses an expertise in domestic and foreign tax planning, financial forensics, fraud prevention and dispute resolution. She is a certified public accountant, certified financial forensic, certified forensic accountant homeland security level V, and a graduate of the American College of Forensic Examiners. Lerner is a member of the American Institute of Certified Public Accountants, American College of Forensic Examiners, National Association of Certified Fraud Examiners, Institute of Business Appraisals, National Conference of CPA Practitioners, and National Association of Tax Preparers.
Steppe Gold Announces 2023 Annual Financial Results
Fourth quarter and year ended December 31, 2023 Highlights
(all figures in US$000's unless stated otherwise, except per unit figures which are in US$)
- Revenue for the three months and year ended December 31, 2023 amounted to $14,677 and $54,239 on sales of 7,242 and 27,050 gold ounces and 17,673 and 71,367 silver ounces, respectively.
- Average realized prices for the three months and year ended December 31, 2023 were $1,977 and $1,948 per gold ounce and $20 and $21 per silver ounce, respectively.
- Operating income from mine operations before depreciation and depletion for the three months and year ended December 31, 2023 was $7,906 and $31,606, respectively.
- Adjusted EBITDA after stream payments for the three months and year ended December 31, 2023 was $2,639 and $11,297, respectively.
- Site All in Sustaining Costs were $984 and $839 per ounce sold respectively for the three months and year ended December 31, 2023. All in Sustaining Cost was $1,281 and $1,140 per ounce sold for the three months and year ended December 31, 2023, respectively.
- During the three months and year ended December 31, 2023, 244,501 and 726,059 tonnes of ore were mined and 207,943 and 913,343 tonnes of ore were stacked on the leach pad, respectively, with an average gold grade of 0.87 g/t and 0.86 g/t, respectively, and an average silver grade of 4.93 g/t and 4.24 g/t, respectively.
- As at December 31, 2023, the cash balance was $6,034 (including $28 recorded in ‘disposal group held for sale'); total bank debt, payables and other debts (including liabilities of $959 recorded in ‘disposal group held for sale', but excluding convertible debentures and stream arrangements) was $23,150 with net debt of $17,116.
- On May 11, 2023, the Company completed a private placement of 11,000,000 common shares resulted in $9,020 cash being raised.
- On March 21, 2024, the Company announced that it had entered into an amended and restated gold prepay agreement of US$5 million.
- The acquisition of Anacortes Mining Corp. (" Anacortes ") was completed on June 28, 2023. As a result, a further 19,437,948 common shares were issued to Anacortes shareholders and a further 924,654 common shares were issued to the advisors to the transaction.
- On August 22, 2023, the Company announced the filing of a technical report in respect of its 100% owned Tres Cruces Gold Oxide Project located in Peru (the " Tres Cruces Project ").
- On July 11, 2023, the Company announced it had signed a binding term sheet with Trade and Development Bank of Mongolia and affiliated entities for $150,000 in financing to fully fund the construction and completion of the Phase 2 Expansion at the ATO Gold Mine (the " Phase 2 Expansion "). The terms of the financing comprise three tranches of $50,000 each for a total of $150,000, expected to be funded in line with the planned construction phase of the Phase 2 Expansion. On August 30, 2023, the Company signed a loan agreement for the first tranche of $50,000 and, on October 9, 2023, made its first draw down of $9,600. The second draw down of $40,400 from the project finance package was funded on March 20, 2024, with a total of $50,000 now drawn from the first tranche of the $150,000 project finance package since October 2023.
- On January 9, 2024, the Company announced that it had entered into a turnkey engineering, procurement and construction contract (the " EPC Contract ") with Hexagon Build Engineering LLC (" Hexagon Build ") for the Phase 2 Expansion.
- An announcement was made on March 26, 2024 providing further details regarding the EPC Contract and the Phase 2 Expansion, with a payment of $37,000 made towards the Phase 2 Expansion, to include funding for procurement of major long lead items, mobilization costs, early construction works and foundational work. The major long lead items include the flotations cells, grinding mills, cluster cyclones, thickener units, filters and pumping systems.
- The Phase 2 Expansion is proceeding according to projected timelines and budgets, with commissioning planned for Q1 2026.
- On January 22, 2024, the Company announced that it had entered into a binding term sheet (the " Term Sheet ") pursuant to which Steppe Gold, either directly or through a wholly-owned subsidiary, will acquire all of the issued and outstanding common shares of Boroo Gold LLC (" Boroo Gold ") in an all-share transaction. The Term Sheet also provides Boroo Pte Ltd., or one of its affiliates, the first right to acquire the Tres Cruces Project at fair market value following the completion of the transaction.
Outlook
With the landmark financing package secured and the first tranche of $50,000 fully drawn down, the Company's main operational focus is execution of development of the Phase 2 Expansion with its EPC partners at Hexagon Build.
This will involve acceleration of the ordering of long lead items, commencement of early construction and foundational works and mobilization to site by Hexagon Build.
The potential acquisition of Boroo Gold is proceeding well with the due diligence process now in the latter stages. The Company is also in negotiations regarding the sale of the Tres Cruces Project.
The Company's consolidated financial results for the year ended December 31, 2023 have been filed on SEDAR+. The full version of the annual 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.sedarplus.ca .
Steppe Gold Ltd.
Steppe Gold is Mongolia's premier precious metals company.
For Further information, please contact:
Bataa Tumur-Ochir, Chairman and CEO
Jeremy South, Senior Vice President and Chief Financial Officer
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
This news release contains certain statements or disclosures relating to the Company that are based on the expectations of its management as well as assumptions made by and information currently available to the Company which may constitute forward-looking statements or information ("forward-looking statements") under applicable securities laws. All such statements and disclosures, other than those of historical fact, which address activities, events, outcomes, results, or developments that the Company anticipates or expects may, or will, occur in the future (in whole or in part) should be considered forward-looking statements. In some cases, forward-looking statements can be identified by the use of the words "continued", "focus", "scheduled", "will", "potential", "planned" and similar expressions. In particular, but without limiting the foregoing, this news release contains forward-looking statements pertaining to the following: trading of the Company's common shares and business; economic, and political conditions in Mongolia and Peru; and discussion of future plans, projections, objectives, estimates and forecasts and the timing related thereto, including with respect to the ATO Gold Mine, the Phase 2 Expansion, the EPC Contract, the Boroo Gold transaction and the sale of the Tres Cruces Project.
The forward-looking statements contained in this news release reflect several material factors and expectations and assumptions of the Company including, without limitation: exercise of any termination rights under the Term Sheet; the negotiation of definitive agreements in respect of the acquisition of Boroo Gold and the sale of the Tres Cruces Project; material adverse effects on the business, properties and assets of the Company; changes in business plans and strategies; market and capital finance conditions; risks inherent to any capital financing transactions; changes in world commodity markets; currency fluctuations; costs and supply of materials relevant to the mining industry; change in government; and changes to regulations affecting the mining industry.
The Company believes the material factors, expectations and assumptions reflected in the forward-looking statements are reasonable at this time, but no assurance can be given that these factors, expectations and assumptions will prove to be correct. The forward-looking statements included in this news release are not guarantees of future performance and should not be unduly relied upon. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements, including, without limitation: changes in world commodity markets, equity markets, costs and supply of materials relevant to the mining industry; changes in government; changes to regulations affecting the mining industry; and certain other risks detailed from time to time in the Company's public disclosure documents, including, without limitation, those risks identified in this news release and in the Company's annual information form dated April 1, 2024, copies of which are available on the Company's SEDAR+ profile at www.sedarplus.ca . Readers are cautioned that the foregoing list of factors is not exhaustive and are cautioned not to place undue reliance on these forward-looking statements.
The forward-looking statements contained in this news release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
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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Steppe Gold Announces Executive Changes
Steppe Gold Ltd. (TSX: STGO) (OTCQX: STPGF) (FSE: 2J9) ("Steppe Gold" or the "Company") announces today that Aneel Waraich has resigned as a director and executive vice president of the Company and Greg Wood has resigned as Chief Operating Officer of the Company, each effective March 28, 2024, and the board of directors has accepted their resignations. The Company would like to thank Mr. Wood and Mr. Waraich for their contributions and wishes them every success in their future endeavors.
In connection with Mr. Waraich's resignation, Steppe Gold has issued an aggregate of 1,250,000 common shares of the Company at a deemed price of $0.77 per share, in addition to a cash payment of US$100,000, to settle all amounts owing by Steppe Gold to Mr. Waraich (the "Waraich Settlement Transaction"). The Toronto Stock Exchange has not approved the Waraich Settlement Transaction at this time. The common shares issued to Mr. Waraich are subject to a statutory hold period of four months plus a day from the date of issuance in accordance with applicable securities legislation, and such further restrictions as apply under foreign securities laws.
In connection with Mr. Wood's resignation, Steppe Gold has issued an aggregate of 1,250,000 common shares of the Company at a deemed price of $0.77 per share, in addition to a cash payment of US$300,000, to settle all amounts owing by Steppe Gold to Mr. Wood (the "Wood Settlement Transaction" and, together with the Waraich Settlement Transaction, the "Settlement Transactions"). The Toronto Stock Exchange has not approved the Wood Settlement Transaction at this time. The common shares issued to Mr. Wood are subject to a statutory hold period of four months plus a day from the date of issuance in accordance with applicable securities legislation, and such further restrictions as apply under foreign securities laws.
Bataa Tumur-Ochir, Chairman and Chief Executive Officer of the Company commented, "We are very grateful to Greg Wood and Aneel Waraich for their dedication and effort in helping Steppe Gold progress from a greenfield project to a successful IPO and now to one of Mongolia's leading precious metals companies. We wish them success in their future ventures.
"Upon the successful closing of the Boroo Gold transaction, we will have transitioned to a multi-asset producer and our focus shifts to maximizing cash flows and building for future growth. Our senior management team and new compensation plan has already reduced management costs by 45%. We will continue to explore ways to improve efficiencies both at the mine sites and at head office as we continue our mission to grow our precious metal production levels as well as our resource base."
The Settlement Transactions constitute "related party transactions" as defined in Multilateral Instrument 61-101 — Protection of Minority Securityholders in Special Transactions ("MI 61-101"), as Mr. Waraich was a director and officer of Steppe Gold at the time of the Waraich Settlement Transaction and acquired an aggregate of 1,250,000 common shares of the Company and Mr. Wood was an officer of Steppe Gold at the time of the Wood Settlement Transaction and acquired an aggregate of 1,250,000 common shares of the Company. The Company is relying on the exemptions from the valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(a) and 5.7(1)(a), respectively, of MI 61-101, as the fair market value of the common shares issued to Mr. Waraich and Mr. Wood does not exceed 25% of the market capitalization of the Company, as determined in accordance with MI 61-101.
The Settlement Transactions were approved by the Board of Directors of the Company.
About Steppe Gold
Steppe Gold is Mongolia's premier precious metals company and 100% owner of the ATO gold mine and the Uudam Khundii project in Mongolia.
Cautionary Statement on Forward-Looking Information
Certain statements in this release constitute "forward-looking statements" or "forward-looking information" within the meaning of applicable securities laws. Such statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of the Company, or industry results, to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements or information, such as obtaining regulatory approval for the appointment of a new president, as well as those factors disclosed under "Risk Factors" in the Company's annual information form for the year ended December 31, 2022. Such statements can be identified by the use of words such as "embark", "expect", "promise", "plan", "commitment", "continuous" and other similar terminology, or state that certain actions, events, or results "may", "can", "could", "would", "might", or "will" be taken, occur, or be achieved.
These statements reflect the Company's current expectations regarding future events, performance, and results and speak only as of the date of this news release such as the consummation and timing of the Boroo Gold transaction. Consequently, there can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Except as required by securities disclosure laws and regulations applicable to the Company, the Company undertakes no obligation to update these forward-looking statements if the Company's expectations regarding future events, performance, or results change.
The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the content of this news release.
Contact Information
Bataa Tumur-Ochir, Chairman and Chief Executive Officer
Jeremy South, Senior Vice President and Chief Financial Officer
Shangri-La office, Suite 1201, Olympic Street 19A, Sukhbaatar District 1, Ulaanbaatar 14241, Mongolia
Tel: +976 7732 1914
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/203559
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Steppe Gold Draw Downs US$40.4M for the Phase 2 Expansion of the ATO Gold Mine
Steppe Gold Ltd. (TSX: STGO) (OTCQX: STPGF) (FSE: 2J9) ("Steppe Gold" or the "Company") is pleased to announce it has reached the next financing milestone for the Phase 2 Expansion at the 100% owned ATO Gold Mine (the "ATO Phase 2 Expansion"). This coincides with further progress on the turnkey engineering, procurement, and construction contract (the "EPC Contract"), and the second project finance draw down of US$40.4m.
Highlights
Second draw down of US$40.4m from the project finance package, was funded on March 20, 2024, with a total of $50m has been drawn from the first tranche of the US$150m project finance package since October 2023.
Steppe Gold has now made its second milestone payment of US$37m towards Phase 2 Expansion for procurement of major long lead items, mobilization costs, early construction works and foundational work.
The major long lead items include the flotations cells, grinding mills, cluster cyclones, thickener units, filters and pumping systems.
The ATO Phase 2 Expansion is proceeding according to projected timelines and budgets, with commissioning planned for Q1 2026.
Further to the announcement on January 9, 2024, the Company confirms that the contract amount payable to Hexagon for the full performance of the work under the EPC Contract is approximately $148.4 million ("Contract Amount").
The Phase 2 Expansion of US$150M is fully funded by the project finance package that has been made available to the Company and its affiliates by TDB Capital and the Trade and Development Bank of Mongolia.
Mr. Bataa Tumur-Ochir, Steppe Gold Chairman and CEO, commented, "We are extremely pleased to report solid progress on our ATO Phase 2 Expansion, and we have now fully drawn down the first $50m of the project financing package. With this major drawdown, together with our EPC partners at Hexagon, we can accelerate the ordering of long lead items, early construction and foundational works and start mobilization. Upon completion of the ATO Phase 2 Expansion and Boroo Gold acquisition, Steppe Gold is estimated to produce over 160,000 ounces by 2026."
Project Financing
On July 11, 2023, the Company signed a binding term sheet with the TDB Group for US$150m in financing to fund the construction and completion of the ATO Phase 2 Expansion at the ATO Gold Mine. The financing consisted of three tranches of US$50m each, for a total of US$150m.
On August 30, 2023, the Company signed a loan agreement with Trade and Development Bank of Mongolia for the first tranche of US$50m with the term of 48 months and interest of 13.4% per annum.
The initial draw down of US$9.6m was funded on October 9, 2023, and the second draw down of US$40.4m was funded on March 20, 2024.
EPC Contract
With the agreement on the EPC Contract schedule and milestone payments, the Company is pleased to report that performance of the work under the EPC Contract is now well underway, and Hexagon is preparing to mobilize to the ATO site in the coming months.
Per the EPC Contract and Purchase Plan for long lead items and Milestone Schedule, the Contractor is delivering:
1) Flotation cells;
2) Grinding mills;
3) Cluster cyclones;
4) Thickener units;
5) Filters; and,
6) Pumping systems;
Hexagon is working with the Company to undertake early construction work as spring weather starts to arrive at the ATO site. In addition, Hexagon is expected to appoint an internationally recognized engineering firm to update recent feasibility studies and prepare front-end engineering work.
About Steppe Gold Ltd.
Steppe Gold is Mongolia's premier precious metals company. It is 100% owner of the ATO Gold Mine and 80% of the Uudam Khundii project in Mongolia. Steppe Gold is now acquiring Boroo Gold LLC to create the leading and largest gold producer in Mongolia. Upon completion of this merger, the Company will increase its production to 160Koz of AuEq per annum by 2026.
About Hexagon
Established in 2014, Hexagon Build Engineering has been actively engaged in engineering, construction, and infrastructure projects both in Mongolia and internationally. Hexagon is devoted to sustainable growth in construction and engineering solutions while aiming to provide the best services that meet customers' expectations with international standards regardless of scale.
For Further information, please contact:
Bataa Tumur-Ochir, Chairman and CEO
Jeremy South, Senior Vice President and CFO
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 contains certain statements or disclosures relating to the Company that are based on the expectations of its management as well as assumptions made by and information currently available to the Company which may constitute forward-looking statements or information ("forward-looking statements") under applicable securities laws. All such statements and disclosures, other than those of historical fact, which address activities, events, outcomes, results or developments that the Company anticipates or expects may, or will, occur in the future (in whole or in part) should be considered forward-looking statements. In some cases, forward-looking statements can be identified by the use of the words "allow", "anticipated", "can", "continue", "expected", "plans", "planned', "projected", "undertake", "will" and similar expressions. In particular, but without limiting the foregoing, this news release contains forward-looking statements pertaining to the following: the mobilization of the Hexagon team to the ATO site; the key milestone target dates and related payments in respect of the EPC Contract; the appointment by Hexagon with respect to an internationally recognized engineering firm; the timing related to the draw downs under the EPC Contract; the Company's operational position, potential, growth, success, commitments and strategy; the timing, goals, targets, benefits, production and revenue related to the ATO Gold Mine; and the use of proceeds in respect of the TDB Project Finance package.
The forward-looking statements contained in this news release reflect several material factors and expectations and assumptions of the Company including, without limitation: that the Company will continue to conduct its operations in a manner consistent with past operations; the general continuance of current or, where applicable, assumed industry conditions; and estimates related to the commencement and production of gold.
The Company believes the material factors, expectations and assumptions reflected in the forward-looking statements are reasonable at this time but no assurance can be given that these factors, expectations and assumptions will prove to be correct. The forward-looking statements included in this news release are not guarantees of future performance and should not be unduly relied upon. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements including, without limitation: changes in business plans and strategies, market and capital finance conditions, general economic, market and business conditions; reliance on industry partners; and certain other risks detailed from time to time in the Company's public disclosure documents including, without limitation, those risks identified in this news release, and in the Company's annual information form for the year ended December 31, 2022, copies of which are available on the Company's SEDAR+ profile at www.sedarplus.ca. Readers are cautioned that the foregoing list of factors is not exhaustive and are cautioned not to place undue reliance on these forward-looking statements.
The forward-looking statements contained in this news release are made as of the date hereof and the Company undertakes no obligations to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the content of this news release.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/203113
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Steppe Gold Announces Amended and Restated Gold Prepay Agreement
Steppe Gold Limited (TSX: STGO) (OTCQX: STPGF) (FSE: 2J9) ("Steppe Gold" or the "Company") is pleased to announce that Steppe Investments Limited, a wholly owned subsidiary of the Company, has entered into an amended and restated gold prepay agreement (the "Prepay Agreement") with Triple Flag International Ltd. ("Triple Flag") for an additional advance under its previously negotiated short-term gold prepay facility (the "Triple Flag Gold Prepay Facility").
Under the terms of the Prepay Agreement, Triple Flag has advanced additional funds of US$5 million to Steppe Gold or one of its affiliates. The Triple Flag Gold Prepay Facility will be repaid by the Company over five months, commencing on August 15, 2024, with five equal monthly deliveries of 530 oz of gold for a total of 2,650 oz delivered.
The Triple Flag Gold Prepay Facility provides additional, non-dilutive liquidity for the Company as it navigates the end of the winter production period and it continues final due diligence on the previously announced acquisition of Boroo Gold.
Steppe Gold Limited
Steppe Gold is Mongolia's premier precious metals company.
For Further information, please contact:
Bataa Tumur-Ochir, Chairman and CEO
Jeremy South, Senior Vice President and Chief Financial Officer
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 includes certain statements that constitute "forward-looking statements", and "forward-looking information" within the meaning of applicable securities laws collectively "forward-looking statements". These include statements regarding Steppe Gold's intent to deliver stated gold volumes under the Prepay Agreement.
When used in this news release, words such as "anticipated", "expected", "future", "opportunity", "ongoing", "potential", "proposed", "vision" and similar expressions are intended to identify these forward-looking statements as well as phrases or statements that certain actions, events or results "could", "may", "should", "will", "would" or the negative connotation of such terms.
As well, forward-looking statements may relate to future outlook and anticipated events, such as the timing and deliver of the stated gold volumes under the Prepay Agreement; the terms and conditions of the Prepay Agreement; and discussion of future financial or operational plans, projections, objectives, estimates and forecasts and the timing related thereto of Steppe Gold.
These forward-looking statements involve numerous risks and uncertainties, including those relating to estimated production and test results, mineral reserves and resources and metallurgical recoveries and such other risk factors detailed from time to time in Steppe Gold's public disclosure documents including, without limitation, those risks identified in Steppe Gold's annual information form for the year ended December 31, 2022, which is available on SEDAR+ at www.sedarplus.ca.
Forward-looking statements are based on information available at the time those statements are made and/or management's good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Forward-looking statements speak only as of the date those statements are made. Except as required by applicable law, Steppe Gold assumes no obligation to update or to publicly announce the results of any change to any forward-looking statement contained or incorporated by reference herein to reflect actual results, future events or developments, changes in assumptions or changes in other factors affecting the forward-looking statements. If Steppe Gold updates any one or more forward-looking statements, no inference should be drawn that the company will make additional updates with respect to those or other forward-looking statements. All forward-looking statements contained in this news release are expressly qualified in their entirety by this cautionary statement.
The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the content of this news release.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/202755
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Steppe Gold Ltd. Announce Extension of Binding Term Sheet
Steppe Gold Ltd. (TSX: STGO) (OTCQX: STPGF) (FSE: 2J9) (" Steppe Gold ") is pleased to announce the extension (the " Extension Letter Agreement ") of the binding term sheet entered with, among other parties, Boroo Gold LLC (" Boroo Gold ") dated January 18, 2024 (the " Binding Agreement "), pursuant to which Steppe Gold, either directly or through a wholly-owned subsidiary, will acquire all of the issued and outstanding common shares of Boroo Gold in an all-share transaction (the " Proposed Transaction "). The Extension Letter Agreement extends the exclusivity period between Steppe Gold and Boroo Gold in the Binding Agreement from March 29, 2024 to April 12, 2024, or such earlier or later time as Steppe Gold and Boroo Gold mutually agree, in order to provide more time for the parties to complete due diligence and enter into a definitive agreement.
For more information on the Transaction, please see the news release dated January 22, 2024 which is available on SEDAR+ at www.sedarplus.ca.
About Steppe Gold
Steppe Gold is Mongolia's premier precious metals company and 100% owner of the ATO gold mine and the Uudam Khundii project in Mongolia.
Cautionary Statement on Forward-Looking Information
This news release includes certain statements that constitute "forward-looking statements", and "forward-looking information" within the meaning of applicable securities laws collectively "forward-looking statements". These include statements regarding Steppe Gold's intent, or the beliefs or current expectations of the officers and directors of Steppe Gold regarding finalization of due diligence and entering into a definitive agreement. When used in this news release, words such as "will" and similar expressions are intended to identify these forward-looking statements as well as phrases or statements that certain actions, events or results "could", "may", "should", "would" or the negative connotation of such terms. As well, forward-looking statements may relate to future outlook and anticipated events, such as the consummation and timing of the Proposed Transaction; the entering into a definitive agreement; and the terms and conditions thereof. These forward-looking statements involve numerous risks and uncertainties, including those relating to required shareholder and regulatory approvals, meeting other conditions in the Binding Agreement, material adverse effects on the business, properties and assets of Steppe Gold, and such other risk factors detailed from time to time in Steppe Gold's public disclosure documents including, without limitation, those risks identified in Steppe Gold's annual information form for the year ended December 31, 2022, which is available on SEDAR+ at www.sedarplus.ca. Forward-looking statements are based on information available at the time those statements are made and/or management's good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Forward-looking statements speak only as of the date those statements are made. Except as required by applicable law, Steppe Gold assumes no obligation to update or to publicly announce the results of any change to any forward-looking statement contained or incorporated by reference herein to reflect actual results, future events or developments, changes in assumptions or changes in other factors affecting the forward-looking statements. If Steppe Gold updates any one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those or other forward-looking statements. All forward-looking statements contained in this news release are expressly qualified in their entirety by this cautionary statement.
Contact Information
Steppe Gold Ltd.
Bataa Tumur-Ochir, Chairman and Chief Executive Officer
Jeremy South, Senior Vice President and Chief Financial Officer
Shangri-La office, Suite 1201, Olympic Street 19A, Sukhbaatar District 1, Ulaanbaatar 14241, Mongolia Tel: +976 7732 1914
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