Steppe Gold has started production and initiated gold and silver sales from its ATO open-pit, heap-leach mine in eastern Mongolia. As of mid-May, the company had sold 5,233 ounces (oz) of gold and 1,372 oz of silver in two separate deliveries to the Central Bank of Mongolia, generating cash flow before stream obligations of $8.5 million.

At the time of the announcement, Steppe had mined, crushed, and stacked approximately 640,000 metric tons (mt) of ore at a grade of 2 grams/mt gold on to Cell 1 of the leach pad, where leaching was in progress. A further 100,000 mt of ore had been delivered to the run-of-mine pad and was being crushed and stacked. Mining was ongoing and was being scaled up.

Steppe expects the ATO mine to produce approximately 60,000 oz of gold in 2020 at cash costs of about $500/oz. Positive cash flows from the mine will go toward studies to expand the open pit and processing facilities to increase production to a targeted 150,000 oz per year (oz/y) of gold.

Exploration drilling results from approximately 11,000 meters of diamond core drilling targeting extensions at depth on the ATO1, ATO4, and Mungu deposits will be available in the coming months.

The COVID-19 pandemic had not had any material impact on Steppe Gold’s operations as of mid-May. Preventative measures were in place to ensure the well-being of employees and contractors. Management continues to monitor the situation at the site and corporate offices to prevent or minimize any effects that the pandemic may have on operational or financial reporting activities.

The Central Bank of Mongolia stated, “We are happy to welcome Mongolia’s most recent gold producer. Steppe Gold is playing a vital role in growing our gold production and contributing to the foreign exchange reserves in Mongolia.”

“We are delighted to commence gold sales at the ATO gold mine,” Steppe Executive Chairman Matthew Wood said. “In a very difficult business environment, we have been able to reach this key milestone.

“We thank our team for their dedication and professionalism and all our stakeholders for their support. We are well placed to pursue our vision to be Mongolia’s premier precious metals company.”