Steppe Gold Ltd (TSX:STGO, OTCQX:STPGF) told investors that its focus for 2023 will be to maximize oxide production from the substantial inventories on hand and aggressively move forward with the Phase 2 Expansion at its ATO mine in Mongolia.
Announcing its 2022 financial results, the Mongola-focused gold miner said discussions are advancing on financing for the expansion in parallel with plans to pursue a dual listing of its common shares on the Main Board of the Stock Exchange of Hong Kong Limited.
“2022 was an active year for mining and stacking on the heap leach phase at the ATO gold mine,” the company said in a statement. “This has continued largely uninterrupted, in spite of strong headwinds from COVID-19 and the related supply chain problems. With the recent relaxation of the zero COVID restrictions in China, we have seen an improvement in parts of the China/Mongolia supply chain.”
With over 2,824,108 tonnes stacked on the leach pad and a further 498,697 tonnes on the ROM pad at year-end, the company said it is pleased to report continued strong gold and silver inventory build-up.
Financial highlights
For the year to December 31, 2022, the company reported revenue of $62.4 million, up from $24.1 million in 2021, on sales of 33,681 gold ounces and 38,740 silver ounces, with average realized prices of $1,818 and $20, respectively.
Operating income from mine operations, before depreciation and depletion, improved to $35 million from $12.4 million a year earlier, and adjusted underlying earnings (EBITDA) after stream payments were $11.9 million. Site all-in-sustaining-costs (AISC) were $796 per ounce sold.
The company ended December with cash of $2.5 million and total bank, other debt and payables were $18.4 million for net debt of $15.9 million.
During the year, the company noted that 958,289 tonnes of ore were mined and 922,051 tonnes of ore were stacked on the leach pad with an average gold grade of 1.82 grams per tonne (g/t) and an average silver grade of 12.06 g/t.
Subsequent events
Steppe Gold reminded investors it announced the results of a technical report on the 100%-owned ATO project in February, comprising a further 1.5 years at the fresh rock expansion, for a 12-year aggregate mine life.
“The results reinforce the company’s current Phase 2 Expansion plans with construction already underway, and existing permitting and infrastructure in place,” the company said. “The Phase 2 Expansion is scheduled to start with first concentrates in 1Q 2025. The life of mine plan includes the ongoing oxide operations which have a further three years to run, for a total of 14 years of mine life, from January 1, 2023.
The company also said it repaid $46.9 million on the 2021 Gold 2 Loan from the cash deposit during 2022. The maturity date of the remaining loan balance of $2.8 million has been extended to July 28, 2024.
In January 2023, it reached an agreement for an additional $5 million for allocation to working capital funded directly from the Trade and Development Bank of Mongolia. The loan maturity date is within 12 months.
Steppe Gold also highlighted its recent announcement that it has entered into a binding letter of intent to acquire Anacortes Mining Corp in a move it said will create a strong, diversified precious metals producer.
Steppe is one of Mongolia's main precious metals companies.
Contact the author at stephen.gunnion@proactiveinvestors.com