Steppe Gold Limited (TSX: STGO) (the “Company” or
“Steppe Gold”) is pleased to provide an update on its
progress in Mongolia.
The Company has been mining since November 2018
and has completed Phase I mining with 230,000 tonnes mined. It is
now moving rapidly to completion of the ADR plant, ahead of first
gold in H2 2019.
The majority of the capital expenditure has been
incurred and the project remains under budget. At April 1, 2019,
the Company had approximately US$2.7m (C$3.641) cash on hand. To
ensure the Company is properly capitalized through to production,
the Company believes it to be prudent to strengthen the balance
sheet.
Accordingly, the Company announces today that it
is conducting a non-brokered private placement of a minimum of
US$5.0m (C$6.75m) aggregate principal amount of unsecured
convertible debentures. This financing also allows Steppe Gold to
proceed with a summer exploration program on the ATO-4-Mungu trend
as well as the trenching and drilling program on the four
discoveries made on our highly prospective Uudam Khundii Project in
Bayankhongor Province, in the south west of the country.
The convertible debentures will bear interest
from the date of closing at 10% per annum, calculated and payable
semi-annually in arrears and will mature on the date that is three
years from the date of issue. The convertible debentures will
be convertible at the option of the holder into common shares of
the Company (the “Common Shares”) at any time prior to maturity at
a conversion price of C$0.90 per Common Share. The offering is
subject to TSX approval and is expected to close on or about May
24, 2019.
The Company can confirm that it has firm
commitments for the private placement from European investors for
approximately US$5.0m (C$6.75m). This financing keeps the Company
fully funded into production.
Development Update
Mining and
Crushing
The Company has now completed Phase I mining
with a total of 230,000 tonnes of ore and no waste being mined
resulting in a zero strip ratio. The lack of waste has been a
considerable bonus to the Company as we have significantly higher
modelled gold grades on the Phase I mining program. Total mined
gold grade for the Phase I mining program was 2.3 g/t gold equating
to approximately 17,000oz of gold stacked on the pad for leaching.
The Company is modelling a leach recovery for gold of 70% which
would equate to approximately 12,000 oz of recoverable gold on the
pad and available for leaching.
Leach Pad and Ponds
Cells 1 and 2 lining has now been completed.
Initial ore stacking on cell 1 will continue for a further 10 days
when Phase I ore mined will all be crushed and stacked for
leaching. Both barren and pregnant ponds have been lined and pumps
will be installed in the coming week. The storm water pond has
also been completed and lined. The 800mm solution return pipe
and the 500mm irrigation pipes have been installed. The 300mm
water bore pipe to the ponds will be completed in early-mid
May.
ADR Plant
The construction of the ADR facility building
continues, with all steel installed and foundation concrete
poured. Sandwich panels and roofing panels are currently being
installed. All ADR facility equipment is on site and is being
installed with the assistance of the manufacturer. Carbon
columns, chemical mixing tanks and elution circuit
platforms are now in place and connection of
facilities is now underway. The Company has now successfully
completed and tested two water bores MTB03 and MTB04. MTB04 being
100 meters from the plant with a flow rate of 6.8l/sec (facility
requires 5.5l/sec). MTB03 will be utilised as a backup
bore and has a flow rate of 5.0l/sec.
“We are pleased with the progress the team
continues to make and are highly encouraged by the results of the
Phase I mining program,” said Matthew Wood, President and CEO of
the Company. “The updates above as well as the upcoming milestones
bring us significantly closer to first gold production. The funds
being raised in the current convertible debenture are a vote of
confidence in the team at Steppe Gold and the quality of our
assets.”
A selection of photos has been included
demonstrating activities on site:
Photos accompanying this announcement are available at
http://www.globenewswire.com/NewsRoom/AttachmentNg/d427b67b-6073-49bd-ac40-15ae7e18de55
http://www.globenewswire.com/NewsRoom/AttachmentNg/e7ed3d09-2b99-4ae8-b2a9-719193325e6f
http://www.globenewswire.com/NewsRoom/AttachmentNg/7caba6c5-dd15-41e7-926d-583865184e2e
http://www.globenewswire.com/NewsRoom/AttachmentNg/c52446a5-69f9-4378-9a8f-c0e6dedb606c
http://www.globenewswire.com/NewsRoom/AttachmentNg/7b3a18ce-5e63-4c8c-945f-17beca60aa6f
Qualified Person
Technical information in this press release not
contained in the Technical Report has been reviewed and approved by
Enkhtuvshin Khishigsuren, Certified Professional Geologist from
AIPG, certification number CPG-11964, Vice President of
Exploration, and a “qualified person” under NI 43-101.
ABOUT STEPPE GOLD LTD.
Steppe Gold is a precious metals development
company with an aggressive growth strategy to build Steppe Gold
into the premier precious metals company in Mongolia. The Company
owns 100% of the advanced staged Altan Tsaagan Ovoo Gold Project
where a heap leach development is currently being completed. The
second development phase of the ATO Project is the construction of
an approximate 150,000oz per annum CIL operation and this is
currently subject to the completion of a feasibility study. The
Company is also working on the completion of a new resource for the
ATO project which will include the new high grade Mungu
Discovery.
Cautionary Note Regarding
Forward-Looking Statements:
The above contains forward-looking statements
that are subject to a number of known and unknown risks,
uncertainties and other factors that may cause actual results to
differ materially from those anticipated in our forward-looking
statements. Factors that could cause such differences include:
changes in world commodity markets, equity markets, costs and
supply of materials relevant to the mining industry, change in
government and changes to regulations affecting the mining
industry. Forward-looking statements in this release include, among
other things, statements regarding the trading of the Common Shares
and business, economic, and political conditions in Mongolia.
Although we believe the expectations reflected in our
forward-looking statements are reasonable, results may vary, and we
cannot guarantee future results, levels of activity, performance or
achievements. We disclaim any intention or obligation to update or
revise any forward-looking statements whether as a result of new
information, future events or otherwise, except as required by
applicable law.
1 US to Canada Exchange rate from XE.com as at April 24, 2019
(US$1 = C$1.34965)
CONTACT INFORMATION
THE COMPANY’S HEAD OFFICE:
Shangri-La office, Suite 1201, Olympic street
19A, Sukhbaatar District 1,Ulaanbaatar 14241, MongoliaTel: +976
7732 1914
TORONTO OFFICE:
90 Adelaide Street. W, Suite 400 Toronto, ON M5H
3V9,CanadaTel: +1 647 697 0577
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