Steppe Gold Ltd announced that it has reached an agreement for up to $65 million in debt capital, or loan, to fast track its phase two construction of the ATO Gold Mine in Mongolia.
The Mongolia-based precious metals company said that of the total $65 million in loans, $59.7 million has been funded through the Gold-2 National Program, facilitated through the Central Bank of Mongolia. The 2021 Gold-2 Loan proceeds were advanced during the third quarter to Steppe Gold by the Trade and Development Bank of Mongolia (TDBM).
The 2021 Gold-2 Loan is a special purpose covenant-light loan, with a three-year term at 9% interest and full prepayment rights without penalty.
READ: Steppe Gold says feasibility study shows US$1.7B revenue potential from its ATO project in Mongolia
Steppe Gold also announced that it reached an agreement for an additional US$5 million for allocation to working capital to be funded directly from TDBM in the form of a prepaid gold sales loan. The TDBM Gold Loan will be repaid over a period of 12 months based on gold sales, with repayments in cash equivalent at MongolBank gold prices.
“Following on the recent completion of the Feasibility Study for the Phase 2 expansion of the ATO Gold Mine, we are now very proud to announce this landmark US$65 million financing package,” said Bataa Tumur-Ochir, CEO of Steppe Gold. “With over 170 billion in funding from the Central Bank of Mongolia, Steppe Gold has cemented its position as Mongolia’s premier precious metals group.”
The company said that the Phase 2 Expansion will generate an additional 300 jobs and further solidify our role as one of the largest investors and employers in the region. The Phase 2 expansion has all major permits to fast-track the development and construction of the expanded crushing circuit are nearing completion.
While Steppe Gold faced significant headwinds from the coronavirus (COVID-19) lockdowns, border closing, and supply chain issues, the company continued full-scale mining and stacking operations in 2021. As of November 1, 2021, the company has a total of over 2.2 million tonnes of ore stacked on the leach and ROM pads, with approximately 45,000 ounces of gold recoverable in the short term.
The precious metals company said that it beleives that 2022 will be the year of "rapid growth and expansion with full production and further financing" for the Phase 2 expansion project.
Enkhtaivan Ganbold, deputy governor of the Central Bank of Mongolia commented: “The Central Bank of Mongolia is supporting leading responsible mining companies to accelerate gold production in Mongolia. Gold production and export plays a vital role in the Mongolia economy, as it supports our foreign reserves and export capacity.”
Contact Ritika at ritika@proactiveinvestors.com