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Steppe Gold secures $65m to fast-track Mongolia mine expansion

11th November 2021

By: Creamer Media Reporter

     

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Mongolian precious metals company Steppe Gold on Wednesday announced that it had secured $65-million in debt capital to fast-track the Phase 2 construction of the ATO gold mine.

The TSX-listed company said that about $59.7-million had been funded through the Gold-2 National Programme, facilitated through the Central Bank of Mongolia.

The Trade and Development Bank of Mongolia (TDBM) advanced the 2021 Gold-2 loan proceeds to Steppe Gold during the third quarter.

The Gold-2 loan is a special purpose covenant-light loan, with a three-year term at 9% interest, and full prepayment rights without penalty.

The company has also reached an agreement for an additional $5-million working capital allocation, which the TDBM would fund in the form of a prepaid gold sales loan.

The Phase 2 expansion will generate an additional 300 jobs. The expansion has all major permits to fast-track the development and construction of the expanded crushing circuit is nearing completion.

The expansion comprises a 10.5-year project, which will produce 106 000 oz/y of gold equivalent in the first five years.

The feasibility study, announced late last month, yielded an aftertax net present value of $232-million and an internal rate of return of 67%, driven by rapid payback of three years from initial capital outlay of $128-million.

The Phase 2 expansion assumes processing 2.2-million tonnes a year, incorporating crushing, grinding and flotation of concentrates.

Edited by Creamer Media Reporter

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