Steppe Gold Ltd. (TSX:STGO) has provided an update on the Bankable Feasibility Study (BFS) underway for the expansion of the ATO Gold Mine into fresh rock ores with a planned production profile of approximately 150,000oz gold equivalent per year and an estimated ten-year mine life.
In parallel with the company's aggressive exploration program currently underway at the ATO Gold Mine, the company said it has retained technical and project management advisers and is now working towards the completion of a BFS with a target date of March 2021.
The BFS is built on a previously completed Centerra Gold 2012 Internal Feasibility study and on further internal studies undertaken by Steppe Gold from 2017 to present.
The company is currently working on updating all resources and reserves for the ATO1, ATO2 and ATO4 deposits in addition to a maiden resource and reserve for the Mungu Discovery.
Steppe Gold has completed a substantial amount of drilling at the ATO Gold Mine since resources and reserves were last calculated. It has drilled 1,840 metres at ATO1, 1,662 metres at ATO2, 14,760 metres at ATO4 and over 26,573 metres have been drilled at the Mungu Discovery.
Financing strategies for the ATO Gold Mine Expansion are advancing in parallel with the BFS process with construction targeted for commencement in mid-2021, and the company said it has commenced discussions with project finance and lending groups and it expects to fund its equity contribution from operating cash flows and cash on hand.
Post the recent placement of shares to Eric Sprott, Steppe Gold added that it has approximately US$22 million cash on hand with regular gold sales from the ATO Gold Mine continuing.
The company said it expects a smooth transition from open-cut oxide ores being heap leached to the processing of open-cut fresh rock ores through a new flotation and CIL circuit.
It is targeting first production from the ATO Gold Mine Expansion in mid to late 2022.
In a statement, Steppe Gold CEO Bataa Tumur-Ochir commented: "With our Phase 1 production now well underway and generating strong cash flows, we are excited to be accelerating the expansion of the ATO Gold Mine into fresh rock ores. Previous studies by Centerra and our own in-house work provide us with a high level of confidence in the economic potential of the fresh rock expansion.
“This larger second phase will clearly demonstrate that the ATO Gold Mine is a robust, long-life, low-cost operation with considerable exploration growth through aggressive drilling programs."
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