Merging to Create Mongolia’s Largest Gold Producer
Steppe Gold Sees 1.5% Increase in Shares Following Acquisition Announcement
Steppe Gold saw a 1.5% increase in shares by 11:40 a.m. ET Monday, bringing its market capitalization to C$70 million ($52m). This boost comes on the heels of the company’s announcement of its acquisition of Boroo, an established gold mine with an average production of over 60,000 ounces per annum and an expected mine life beyond 2030. This acquisition effectively triples Steppe’s existing annual production of 30,000 ounces from the ATO gold mine.
Looking ahead, Steppe Gold has ambitious production targets, aiming for 200,000 ounces per annum, considering the ATO Phase 2 expansion, with an expected annual production of 160,000 ounces as soon as 2026. Additionally, the acquisition is expected to add to Steppe’s existing resource base of over 4 million ounces of gold equivalent.
Steppe Gold’s CEO, Bataa Tumur-Ochir, expressed confidence in the company’s future trajectory, stating that production is expected to triple over the next two years and reach 160,000 ounces by 2026. Tumur-Ochir also highlighted the company’s financial strength to repay the non-dilutive $150 million project financing for the ATO gold mine Phase 2 expansion and to advance its exploration portfolio.
In a strategic move, the company signed a binding term sheet in July 2023 to provide up to $150 million in financing for the construction of the ATO Phase 2 expansion, enabling the mine to recover 103,000 ounces of gold-equivalent over a 12-year span.
Furthermore, Tumur-Ochir emphasized that the acquisition of Boroo provides shareholders with “improved optionality” at the Tres Cruces gold project in Peru, while maintaining the company’s focus on growing its production profile in Mongolia. A definitive agreement between Steppe and Boroo is set to be negotiated in the coming weeks, with the exclusivity period ending on March 18, 2024.
With these developments, Steppe Gold appears poised for significant growth and expansion in the near future, signaling promising prospects for the company and its shareholders.
