Steppe Gold Limited (TSX:STGO, OTCQX:STPGF) announced that it has entered into an agreement with Triple Flag International Ltd for a short-term gold prepay facility.
As the gold miner explained in a release, one of the consequences of the zero Covid policy in China and the closures along its border with Mongolia has been a shortage of available US dollars with banks in Mongolia.
Steppe Gold sales revenue is received in Mongolian Tugrik, it said.
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“While most of its operating costs are also paid in local currency, we require US dollars to acquire reagents and to fund deliveries to Triple Flag. The Triple Flag Gold Prepay Facility allows Steppe Gold to continue to meet all of its obligations during this temporary market disruption,” it said in a statement calling the deal “an elegant funding solution for a short-term currency issue”.
Under the terms of the agreement, Triple Flag has advanced net funds of US$4.6 million to Steppe Gold after fees and legal costs. The Triple Flag Gold Prepay Facility will be repaid over six months starting December 23, 2022 by six monthly deliveries of 500 ounces of gold for a total of 3,000 ounces.
Steppe Gold added that it is operating as planned with gold pours every two weeks and its Phase 2 expansion plans are on track.
--Updated to reflect correct start date of December 23, 2022--
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