Steppe Gold Ltd (TSE:STGO) (OTCMKTS:STPGF) (FRA:2J9) updated on its plans to lift output at its flagship ATO gold mine in Mongolia to 150,000 ounces of gold equivalent a year in 2023 from fresh rock, saying it had begun procuring major long lead items and was continuing talks on a multi-tranche project debt facility.
The miner has bought a new crushing plant from a leading international supplier for US$5 million, including its installation and construction, which has a capacity of 1,000 tonnes per hour (t/hr), more than three times' the current capacity.
READ: Stifel GMP ups price target on Steppe Gold to C$4 after miner doubles its ATO gold mine resource
Construction of the foundation is set to begin in early April this year, with the plant scheduled to be operational by July.
The crushing plant purchase is being partly financed by a C$2.9 million loan from a leading Mongolian commercial bank, Steppe said in a statement.
Alongside the procurement of capital items, the company said it was continuing discussions with Mongolian and international lenders on a multi-tranche project debt facility to finance this Phase 2 expansion, which is expected to include a grinding circuit, a leach/CIP plant, and a flotation circuit.
Metallurgical testing is also progressing well with encouraging results and the bankable feasibility study is on track to be completed this summer, Steppe added.
The miner's CEO Bataa Tumur-Ochir said: "We have prioritised the expansion of crushing capacity as it will also significantly accelerate stacking rates at the heap leach phase of the project and this is expected to support increased gold production in late 2021 and 2022.
"We have also started design work to expand the camp capacity and plans are advancing for value-added power solutions. With a strong balance sheet and encouraging demand from lenders, we expect to accelerate capital works on our Phase 2 expansion through the second half of 2021 as we target fresh rock production of 150,000 ounces gold equivalent starting in 2023."
Shares added over 5% in Canada on the day to stand at C$1.41 each.
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