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Steppe Gold focused on Phase 2 expansion preparations in Mongolia as production makes slow start in 2021

Published: 09:28 17 May 2021 EDT

Steppe Gold Limited -
The miner is targeting annual production in 2021 and 2022 of 50,000 ounces and then to transition to the fresh rock ores in 2023

Steppe Gold Limited (TSE:STGO) (OTCQX:STPGF) (FRA:2J9) said COVID-19 challenges and the cold weather impacted output in its first quarter at its flagship Mongolia gold mine but that the feasibility study into expanding the project remains on track to be finalized this summer. 

In the three months to March 31, the company mined 179,130 tonnes versus 291,455 tonnes in the previous quarter to December 31, 2020. 

READ: Steppe Gold delivers strong 4Q results with US$13.2M in revenue and market-low cash costs

Revenue for the three months was US$1.634 million (Q4: US$13.2 million) on sales of 945 gold ounces and 861 silver ounces, with average realized prices per ounce of US$1,938 and US$26 respectively.

The miner is targeting annual production in 2021 and 2022 of 50,000 ounces and then to transition to the fresh rock ores in 2023.

CEO Bataa Tumur-Ochir noted in a statement: "There has been a slow start to production in 2021 and the achievement of full year production forecasts are dependent on no further delays on procurement due to COVID 19.

"Reagent supplies are currently unpredictable and any further delays will reduce production forecasts for 2021. We have now mined over 1.8 million tonnes of ore with 1.4 million tonnes stacked on the leach pad."

But he added: "With a new fixed crusher in place this summer, we are planning a record year for stacking in 2021. We paused production in the first quarter with prevailing cold weather conditions and we resumed leaching in early April with a successful gold pour in late April."

Tumur-Ochir highlighted that the company was now focused on Phase 2 expansion preparations. The ATO mine resource now stands at 2.45 million ounces of gold-equivalent and the feasibility study is on track to be finalised this summer.

Project lender discussions are advancing and we are optimistic that timely debt financing will allow us to continue uninterrupted with long lead item procurement and Phase 2 construction, already underway," he added.

Steppe also noted that it had filed a prospectus to list its shares on the Mongolian Stock Exchange.

"We plan to list this summer with an accompanying small equity financing. We are very excited to list in our home market and allow more Mongolians to participate in the success of Steppe Gold," said Tumur-Ochir.

Contact the author at giles@proactiveinvestors.com

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