Steppe Gold Ltd (TSE:STGO) (OTCMKTS:STPGF) (FRA:2J9) has doubled the resource at its ATO gold mine to 2.45 million gold equivalent ounces, it revealed Wednesday.
The miner released an updated resource estimate at the Mongolian project that saw measured and indicated (M&I) resources increase to 41.6 million tons or 2.2 million ounces at an average grade of 1.7 grams per ton (g/t) gold equivalent ounces – 1.4 million gold ounces and 20.5 million silver ounces, according to a statement.
Steppe Gold is preparing a bankable feasibility project on the ATO operation that is due to come out in the second quarter of 2021.
READ: Steppe Gold unveils plans for secondary listing on Mongolian Stock Exchange
According to the Canadian-listed mining company, the increase in the M&I resource is due primarily to significant expansion through drilling at the ATO 4 Deposit and incorporation of a maiden resource at the Mungu Deposit. The ATO 4 Deposit, where mining recently started, shows an M&I resource of 15.7 million tons at 1.6 g/t for a total of 819,000 gold equivalent ounces, while the maiden resource at the Mungu discovery shows an M&I resource of 7.6 million tons at 1.7 g/t for 424,000 gold equivalent ounces.
Bataa Tumur-Ochir, Steppe’s CEO, said the company was “very pleased” with the significant upgrade to the resource estimate at ATO, where production started in April 2020 with cash costs of around $600 per ounce.
“Our drilling efforts since 2018 have clearly demonstrated the great promise shown for this project and the potential we saw at the outset,” Tumur-Ochir said in a statement.
“This dramatic increase in the ATO resource further underpins the long life attributes of the project. Internal studies and our drilling analysis have long supported the growth potential of ATO Gold Mine and sampling during mining has also shown strong positive grade reconciliations. This resource update validates this.”
Optimism surrounding upcoming feasibility study
The new resource supports Steppe’s Phase 2 expansion project and shows plenty of additional resources for a nearly 2.5 million ton per year fresh ore development, according to Tumur-Ochir. The CEO added that Steppe is “optimistic” that the bankable feasibility study will reveal robust economics and extend the operation another 10-plus years at 150,000 ounces.
Steppe’s executive chairman Matthew Wood also said that he was “particularly pleased” to see the results at ATO 4 and the Mungu discovery and the high percentage of resources in the M&I category.
"The resource interpretations also show further potential zone extensions, for which there are numerous targets,” Wood told shareholders.
The company plans to ramp up the exploration program in 2021, with an internal target of three to five million ounces across its licences.
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