Steppe Gold Limited (TSX:STGO, OTCQX:STPGF) said 2021 has been active thus far following several coronavirus (COVID-19) related supply chain challenges in 2020.
According to the corporate update, the first six months of the year have been a busy period for the company which has been mining and stacking on the heap leach phase.
The Mongolian-focused precious metals miner plans to have a newly installed fixed crushing unit operational by October 2021 at its ATO Gold mine.
READ: Steppe Gold gets the go-ahead to cross-list on the Mongolian Stock Exchange
To date, there is 1.6 million tonnes stacked on the leach pad and a further 450,000 tonnes on the ROM pad, adding to Steppe’s “strong gold and silver inventory build-up through the year.”
“Based on sampling grades on mined and stacked ore, together with estimated unrecovered ore on the leach pad or in the solution or circuit, we estimate that we have a total of approximately 34,000 oz of gold in inventory on the leach pad, ROM pad and in circuit,” the statement noted.
When the new crusher is operational in October it is expected to have a capacity of 1,000 tonnes per hour (t/hr), which is more than three times the current crusher capacity.
This increased rate will offset some of 2Q production declines stemming from issues supplying reagent.
“[And will] fully support planned mining rates for the fresh rock phase where we have estimated throughput rates of greater than 2mt p.a. [million tonnes per annum],” said the company. “Importantly, this will also allow us to drive higher crushing rates in the remaining oxide phase with ample excess capacity in the plant.”
2Q gold production at the ATO Gold Mine tallied 7,202 ounces oz, with 6,558 oz sold at an average realized sale price of $1,852. Despite being lower than projected the gold miner is confident that with reagent supply resumed it will still finish the year strongly.
"While we are glad to report zero COVID cases at our mine site and uninterrupted mining activities through the first half of 2021, the pandemic continues to cause delays in our supply chain,” Bataa Tumur-Ochir, President and CEO of Steppe Gold said in the statement.
“This has caused issues with our production which is below expectations in the second quarter. These issues are impacting most operating mining companies in Mongolia but we are optimistic that the China border issues will be resolved soon and we are working on contingency planning for further delays.”
Additionally, the Definitive Feasibility Study for the fresh rock expansion is nearing completion and Steppe expects to release headline numbers in the upcoming weeks. with the final report to be filed shortly thereafter.
Tumur-Ochir went on to say: “We now have over 2 million tonnes mined or around 50% of the planned leach pad tonnage, with approximately 34,000 oz of gold in inventory. Together with net cash of approximately $10 million, this provides strong support to our liquidity position and our balance sheet.”
There is an ongoing exploration program underway at ATO Gold Mine with one active drill rig on site and approximately 2,000m of drilling completed.
At the company’s Uudam Khundii project in Mongolia’s western gold belt, drill rigs will be mobilized for a maiden drilling program in the coming weeks.
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