PRECIOUS METALS

Steppe up on Sprott investment

Shares in Mongolia-focused Steppe Gold have achieved a new 12-month high after Eric Sprott invested C$15 million (US$11 million) in the company, which is looking to more than double gold production at its ATO mine in the country's east.

Staff Reporter
Steppe Gold's ATO mine camp in eastern Mongolia

Steppe Gold's ATO mine camp in eastern Mongolia

The company, negotiating finance to expand output from the 60,000oz-a-year Altan Tsagaan Ovoo heap leach operation via a US$100 million-plus fresh-rock mining and CIL project to 150,000ozpa, has seen its share price (TSX:STGO) rise by more than 190% since the start of the year.

Sprott is buying all seven million C$2.15 subscription receipts in a non-brokered private placement. The units convert to common shares plus a warrant that can be converted to a common share within 24 months at a $3 strike price.

Steppe executive chairman Matthew Wood said the investment was a "strong endorsement" of Steppe's Mongolia gold strategy.

The company reported its first gold and silver sales from ATO in May this year and has said the COVID-19 pandemic had not materially impacted its operations. It is forecasting 60,000oz production at cash costs of about US$500/oz to yield more than $40 million of EBITDA in 2020.

New resource estimates for ATO and the Mungu epithermal project immediately north-east of ATO are expected soon.

Steppe shares gained nearly 17% Thursday on the Sprott news. The company has a current market capitalisation of C$132 million (US$97 million).

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