Steppe Gold (TSX: STGO; OTC: STPGF; FSE: 2J9) has signed a binding term sheet to provide up to US$150 million in financing to fully fund the construction of the phase two expansion at its ATO (Altan Tsagaan Ovoo) gold mine in Dornod, northeast Mongolia. The second phase will recover 103,000 oz. of gold-equivalent in each of 12 years.
The first phase of production began in 2020 and has already produced over 78,000 oz. of gold to date by heap leaching. A further 83,000 oz. is to be recovered before phase two begins in fresh rock.
The ATO expansion project has a post-tax net present value of US$242 million. The capital expenditure is to be US$128 million, but the expanded operation will result in total gross revenues of US$2.2 billion.
Proven and probable reserves are 29.1 million tonnes grading 1.13 g/t gold and 12.43 g/t silver, containing 1.1 million oz. of gold and 11.7 million oz. of silver. A total of 1.3 million oz. gold-equivalent will be recovered over the life of the ATO project. The measured and indicated resource is 41.6 million tonnes averaging 1.67 g/t gold-equivalent, containing 2.2 million oz. gold-equivalent.
Steppe says recent drilling has discovered multiple high-grade zinc sulphide intercepts beneath the existing ATO gold deposits. Assays were as high as 10.56% zinc and 3.13% lead over 21.0 metres. Even the lowest assays – 4.23% zinc and 1.83% lead over 55.4 metres – are indicative of potential.
Find more information at www.SteppeGold.com.