Steppe Gold Limited (TSX:STGO, OTCQX:STPGF) has revealed it is going full pelt with its Phase 2 expansion plan at the ATO gold mine in Mongolia after receiving a landmark power agreement and a new fixed crusher, which is expected to be completed this October.
All equipment for the new unit has arrived and 160 tonnes of equipment have been installed out of a total of 220 tonnes. The installation is now 72% complete.
Once operational, the new crushing unit will increase Steppe's current processing capacity by four times, up to 4 million tonnes per annum at 50% of its power.
"We are pleased to report solid progress on the new fixed crusher, which is a critical step in the Phase 2 Expansion. Despite a challenging period with COVID-related lockdowns in China and continued border closures, we have shipped all heavy equipment and installation work is rapidly advancing," said Steppe Gold CEO Bataa Tumur-Ochir.
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"The company has over 781,500 tonnes of ore on the ROM pad in addition to 735,000 tonnes of blasted material on the pit floors, and the new crushing unit will significantly increase daily crushing rates at the Phase 1 project in the winter months.
"We are also delighted to announce government approval to connect to the state grid power system and quota to use 10MW, which will significantly reduce operating costs for the Phase 2 Expansion of the ATO Gold Mine. This is a major milestone for us as we accelerate the major capital items for this next phase," he added.
With the recent fuel price surge, connecting the mine to Mongolia's state grid power system will dramatically reduce projected energy costs by 75%, or from around $32 million to $8 million annually at the Phase 2 Expansion and will reduce expected cash costs by more than $100 per ounce, said Steppe.
The firm said it aimed to begin building the high voltage power line system in 2023-2024, while the flotation plant should be completed by the third quarter of 2024.
Steppe also said it continued to work on optimizing the Phase 2 Expansion through exploration drilling and it plans to announce updates to the mine plan in the coming month or so.
"We are well advanced with design work on the expansion facilities, and new fuel and chemical storage facilities are complete," it added.
The firm's new 1,000 tonnes per hour crushing unit consists of two jaw crushers, four hydraulic cone crushers, five vibration screens and five vibration feeders, 17 conveyor systems, three sets of buffer bins with steel structure, three underground buffer bins with steel structure and central control system.
More can be seen of the crusher in a video HERE.
Contact the author at giles@proactiveinvestors.com