Steppe Gold Ltd (TSX:STGO, OTCQX:STPGF) said it has secured US$150 million to fully fund the construction and completion of the Phase 2 expansion at the ATO Gold Mine in Mongolia.
"This is a significant milestone for Steppe Gold and secures the future of the ATO Gold mine for the next 14 years,” Steppe Gold CEO Bataa Tumur-Ochir said in a statement.
“It has been a challenging yet rewarding five years since we listed on the TSX, and the company has been working towards unlocking the full potential of the ATO Gold Mine through the Phase 2 expansion. Most importantly, it allows the company to move forward with all our stakeholders in Mongolia with a long-term and sustainable project in the region, with secure employment opportunities and positive economic outcomes.”
Steppe Gold said the financing comprises three US$50 million tranches —a US$50 million term loan from the Trade and Development Bank of Mongolia, a US$50 million senior secured credit facility, and a US$50 senior secured gold linked loan.
The miner said the parties will now work toward definitive loan documentation, with the funding expected to be handed down in tranches over the next nine to 12 months.
Initial funding of $50 million has been approved to order equipment and long lead items, Steppe Gold noted.
The payback period starts when the Phase 2 expansion is completed, with the first concentrate production and sales from Phase 2 anticipated in 2025.
Steppe Gold said the fresh rock mine expansion life is 12 years, extending open pit mining and milling operations until December 2036.
Revenue over the next 14 years from the project, including the current oxide phase, is expected to be US$2.2 billion, the company said.
Steppe Gold is a precious metals company focused on the ATO Gold Mine in Mongolia.
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