Steppe Gold Ltd (TSX: STGO) (OTCQX:STPGF) has reached agreement for up to $65 million in debt capital to fast track its phase two construction of the ATO Gold Mine.
Of the total $65m in Loans, MNT 170 billion or approximately US$59.7m has been funded through the Gold-2 National Programme, facilitated through 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 special purpose covenant-light loan, with a three-year term at 9% interest and full prepayment rights without penalty. All interest amounts are paid monthly. Draw down of the loan proceeds will commence on completion of registration of security, expected later this month.
Further the company has reached agreement for an additional US$5m for allocation to working capital to be funded directly from TDBM in the form of a prepaid gold sales loan. The TDBM Gold Loan will be repaid over a period of 12 months based on gold sales, with repayments in cash equivalent at MongolBank gold prices.
Bataa Tumur-Ochir, the President and CEO of Steppe Gold, said with its Phase 2 Expansion headline numbers announced on October 27 and construction already commenced on the expanded crushing circuit the company will now allocate the proceeds of the Gold-2 Loan to fast track the construction of the Phase 2 Expansion Project.
“Following on the recent completion of the Feasibility Study for the Phase 2 expansion of the ATO Gold Mine, we are now very proud to announce this landmark US$65M financing package. With over 170 bn in funding from the Central Bank of Mongolia, Steppe Gold has cemented its position as Mongolia’s premier precious metals group,” Tumur-Ochir said.
“The company is highly 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 revenue and foreign reserves position.
“The Phase 2 Expansion will generate an additional 300 jobs and further solidify our role as the one of the largest investors and employers in the region. The Phase 2 expansion has all major permits to fast-track the development and construction of the expanded crushing circuit is nearing completion.
“While Steppe Gold has faced significant headwinds from COVID lockdowns, border closing and supply chain issues, the Company continued full scale mining and stacking operations in 2021. As of November 1, 2021, Steppe Gold has a total of over 2.2m tonnes of ore stacked on the leach and ROM pads, with approximately 45,000 ounces of gold recoverable in the short term.
“Steppe Gold is proud that 100% of its suppliers are Mongolian and 99% of employees are Mongolian nationals. Within the framework of its social responsibility agenda, the company commenced a scholarship programme, providing financial support to over 1,000 students since 2017.
“Steppe Gold believes 2022 will be the year of rapid growth and expansion with full production and further financing for the Phase 2 expansion project. Steppe Gold wants to thank all of its stakeholders for their support and for placing their confidence in us as Steppe Gold focuses on building and delivering sustainable and tangible value.”
About the Gold-2 National Programme
The Gold-2 National Programme aims at ensuring the sustainable growth of the economy, increase foreign exchange reserves, and support the gold industry to increase central bank’s gold purchase, maintain legal stability, and promote environmentally responsible mining. Several ministries including the Ministry of Mining and Heavy Industry, Ministry of Environment and Tourism and Central Bank of Mongolia, commercial banks and the private sector are cooperating as part of the programme.
For further information please visit: https://steppegold.com/
