Steppe Gold Ltd (TSX:STGO, OTCQX:STPGF), a leading precious metals company focused on Mongolia, has unveiled ambitious plans to solidify its position as the top player in the region's mining industry.
Listed on the TSX since 2018, Steppe Gold's primary asset is the 100% owned ATO Gold Mine, which boasts 1.2 million ounces of gold equivalent and a mine life extending over 12 years.
The ATO Gold Mine operates in two phases. Phase one, currently in production, saw the company mine over 4.3 million tons of ore, stacking more than 3.8 million tons on the leach pad. This has resulted in the production of 110,000 ounces of gold and 200,000 ounces of silver.
CEO Bataa Tumur-Ochir highlighted in a recent video that an additional 50,000 ounces of gold is expected from phase one as the company advances towards phase two expansion.
Phase two is set to unlock over 80% of the mine's total value, with Steppe Gold securing $115 million to fully fund this expansion. The first tranche of $50 million has already been deployed for early construction works, with the second tranche anticipated later this year.
Phase two is projected to commence production by mid-2026, aiming to produce 90,000 to 100,000 ounces of gold equivalent annually over the next 12 years.
In a significant strategic move, Steppe Gold has signed an agreement to acquire Boroo Gold, Mongolia's largest gold producer. This acquisition is expected to immediately enhance Steppe Gold’s production capacity, adding approximately 60,000 ounces of gold per annum, and increasing total combined production to 85,000 ounces next year and 150,000 ounces of annualized gold equivalents by mid-2026.
Tumur-Ochir emphasized the broad impact of the Boroo acquisition, stating, "This transaction not only makes Steppe Gold the leading precious metals company in Mongolia but also ensures strong cash flow for growth and debt service during the transition from phase one to phase two expansion."
Steppe Gold’s workforce will double during the construction period of phase two, directly employing over 300 people on-site and involving one out of every four families in the region. The company's long-term vision is to become Mongolia's leading multi-asset precious metals company, focusing on robust cash flow and asset growth.
With the Boroo acquisition and phase two expansion, Steppe Gold is poised to enhance its production capabilities, explore further resource expansions, and capitalize on new opportunities for synergies and cost savings, solidifying its leadership in Mongolia's mining sector.
Tumur-Ochir expressed confidence in the company's future, noting strong shareholder support and a proven track record of mine development and financing. "The next two years will be the most exciting and crucial phase of growth for Steppe Gold, unlocking significant shareholder value," he said.
“We believe in the company, and we are very proud of our shareholders, and we are very proud of our strong support from Mongolia.”