ULAAN-BAATAR, Mongolia, November 10, 2021 (GLOBE NEWSWIRE) – Steppe Gold Ltd (TSX: STGO) (OTCQX: STPGF) (FSE: 2J9) (“Steppe Gold” or the “Company”) is extremely pleased to announce that it has reached an agreement for up to $ 65 million (all figures are in US dollars unless otherwise noted) in debt capital (the “Loans”) to expedite construction of the second phase of the ATO gold mine.
Of the total of $ 65 million in loans, MNT 170 billion, or approximately US $ 59.7 million (the “2021 Gold-2 Loan”), were financed through the national Gold-2 program, facilitated by the Central Bank of Mongolia. The 2021 Gold-2 loan proceeds were advanced during the third quarter to Steppe Gold by the Trade and Development Bank of Mongolia (“TDBM”).
The 2021 Gold-2 Loan is a three-year, three-year low-covenant loan with an interest rate of 9% and full repayment rights without penalty. All interest is paid monthly. The drawdown of the loan proceeds will begin upon completion of the collateral registration, expected later this month.
In addition, the Company has entered into an agreement for an additional allocation of US $ 5 million to working capital which will be financed directly by TDBM in the form of a prepaid gold sales loan (the “TDBM Gold Loan “). TDBM’s gold loan will be repaid over a 12-month period based on gold sales, with cash equivalent repayments at MongolBank’s gold prices.
With the key figures of the Phase 2 expansion announced on October 27 and construction already started on the expanded crushing circuit, the company will now use the proceeds from the Gold-2 loan to accelerate construction of the expansion project of the phase 2.
Bataa Tumur-Ochir, President and CEO of Steppe Gold, commented: “Following the recent completion of the feasibility study for the expansion of phase 2 of the ATO gold mine, we are now very proud to announce this historic financial package of 65 million US dollars. With more than 170 billion in financing from the Central Bank of Mongolia, Steppe Gold has consolidated its position as Mongolia’s leading precious metals group.
The Company is strongly encouraged by the trust placed in us by leading Mongolian financial institutions. This is a tremendous vote of support for Steppe Gold, for the Mongolian mining industry, and will add value to Mongolia’s export earnings and foreign exchange reserve position.
The Phase 2 expansion will generate 300 additional jobs and further strengthen our role as one of the region’s largest investors and employers. The Phase 2 expansion has all the major permits to accelerate development and construction of the expanded crushing circuit is nearing completion.
As Steppe Gold faced significant headwinds from COVID lockdowns, border closures and supply chain issues, the company continued its large-scale mining and stacking operations in 2021 As of November 1, 2021, Steppe Gold had a total of over 2.2 million tonnes of ore stacked on the leach and ROM platforms, with approximately 45,000 ounces of gold recoverable in the short term.
Steppe Gold is proud that 100% of its suppliers are Mongolian and that 99% of the employees are of Mongolian nationality. As part of its social responsibility program, the Company has launched a scholarship program, providing financial support to more than 1,000 students since 2017.
Steppe Gold believes 2022 will be the year of rapid growth and expansion with full production and additional funding for the Phase 2 expansion project. Steppe Gold would like to thank all of its stakeholders for their support and for the trust they place in us as Steppe Gold focuses on creating and delivering lasting, tangible value. “
Enkhtaivan Ganbold, Deputy Governor of the Central Bank of Mongolia, said: “The Central Bank of Mongolia supports the major mining companies responsible for accelerating gold production in Mongolia. The production and export of gold plays a vital role in the Mongolian economy, as it supports our foreign reserves and our export capacity. We are delighted to extend our support for the expansion of Phase 2 of Steppe Gold through the Government of Mongolia’s National Gold-2 program.
Mr. Banzragch Оrig, First Deputy General Manager of TDBM, said: “We are very happy to support the main Mongolian gold producers under the national Gold-2 program. Steppe Gold continues to be a great achievement in the Mongolian mining industry, demonstrating leadership in safety, community support and environmental stewardship. We are delighted to support the exciting expansion plans of Phase 2 of Steppe Gold.
About the National Gold-2 Program
The national Gold-2 program aims to ensure the sustainable growth of the economy, increase foreign exchange reserves and support the gold industry to increase central bank gold purchases, maintain legal stability and promote exploitation environmentally friendly mining. Several ministries, including the Ministry of Mines and Heavy Industry, the Ministry of Environment and Tourism and the Central Bank of Mongolia, commercial banks and the private sector are cooperating under the program.
Steppe Gold Limited:
Steppe Gold is Mongolia’s premier precious metals company.
For more information, please contact:
Bataa Tumur-Ochir, CEO and Chairman
Shangri-La Office, Suite 1201 Olympic Street
19A, Sukhbaatar 1 district,
Ulaanbaatar 14241, Mongolia
Phone. : +976 7732 1914
Caution regarding forward-looking statements:
The foregoing contains forward-looking statements which 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 global commodity markets, stock markets, costs and supply of materials relevant to the mining industry, changes in government and regulatory changes affecting the ‘mining industry. Forward-looking statements contained in this press release include, among other things, statements regarding the trading of ordinary shares and the business, economic and political conditions in Mongolia. Although we believe that 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 statement, whether as a result of new information, future events or otherwise, except as required by applicable law.
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