Steppe Gold Ltd. announced plans to acquire Boroo Gold LLC in an all-share transaction. Both companies operate gold mines in Mongolia. Boroo Gold produces more than 60,000 oz/y with an expected mine life that extends beyond 2030. The acquisition would immediately increase Steppe’s production to 90,000 oz/y from 30,000 oz/y and position it as the leading gold producer in Mongolia. Production could increase to 200,000 oz/y in 2026 when the Phase 2 expansion at Steppe’s ATO gold mine is complete.
“The increase in gold production will add to our financial strength, allowing us to repay the $150 million in project financing for the Phase 2 Expansion at the ATO gold mine and to advance our exploration portfolio,” said Bataa Tumur-Ochir, chairman and CEO of Steppe Gold. “It also provides shareholders with improved optionality at our Tres Cruces gold project in Peru while maintaining our focus on growing our production profile in Mongolia.”
With the way the deal is structured, Boroo Pte. Ltd., the beneficial shareholder of Boroo Gold, would hold a 58.8% interest in Steppe Gold. The proposed transaction is subject to the negotiation of definitive agreements which will be negotiated during an exclusivity period ending on March 18, 2024. Steppe Gold has agreed to give Boroo Pte. Ltd. certain registration rights.
Additionally, for a period of six months following the completion of the Proposed Transaction, Boroo Pte. Ltd., and/or its associates will have a right of first refusal to acquire the Tres Cruces gold project located in Peru through its subsidiary, Anacortes Mining Corp., at fair market value.
Boroo Gold operates the Boroo mine in Selenge province, as well as owning and operating the adjacent Ulaanbulag mine. It has a 50,000 t/d mining fleet, 5,500 t/d mill and carbon-in-leach circuit gold processing plant, 3 million t/y heap leach and carbon-in-columns plant, with a workforce of more than 500 people.
At the beginning of the year, Steppe signed a $148.4 million turnkey engineering, procurement, and construction (EPC) contract with Hexagon Build Engineering LLC for the Phase 2 Expansion at ATO. First concentrate production and sales from Phase 2 is anticipated in early 2026. Construction has commenced and the crushing circuit is 90% complete. The expansion will extend open pit mining and milling operations to December 2036.
