Steppe Gold Announces Q2 2024 Financial Results Board Appointment and 2024 Production Guidance
Steppe Gold Announces Q2 2024 Financial
Results Board Appointment and 2024
Production Guidance
Ulaanbaatar, Mongolia--(Newsfile Corp. - August 14, 2024) -
Steppe Gold Ltd. (TSX: STGO)
(OTCQX: STPGF) (FSE: 2J9)
("
Steppe Gold
" or the "
Company
") is pleased to announce its financial
results for the quarter ended June 30, 2024.
The second quarter results shown below do not reflect the impact of the acquisition of Boroo Gold which
was completed on August 1, 2024. The impact of the Boroo Gold acquisition and the sale of the Tres
Cruces Project will be reflected in the third quarter results.
HIGHLIGHTS
Second Quarter Highlights
(all figures in US$000's unless stated otherwise, except per unit figures which are in US$)
Revenue for the three and six months ended June 30, 2024 amounted to $10,392 and $18,363 on
sales of 4,040 and 7,763 gold ounces, and 36,672 and 56,178 silver ounces, respectively.
Average realized prices for the three and six months ended June 30, 2024, were $2,318 and
$2,191 per gold ounce and $26 and $24 per silver ounce, respectively.
Combined gold production for the second half of 2024 is expected to be between 30,000 to
35,000 oz.
Operating income from mine operations before depreciation and depletion for the three and six
months ended June 30, 2024, were $6,167 and $10,490, respectively.
Adjusted EBITDA after stream payments for the three and six months ended June 30, 2024 were
$2,337 and $2,027.
Site All in Sustaining Costs were $856 and $899 per ounce sold for the three and six months
ended June 30, 2024.
All in Sustaining Cost was $1,124 and $1,315 per ounce sold for the three and six months ended
June 30, 2024.
During the six months ended June 30, 2024, 337,236 tonnes of ore were mined and 223,738
tonnes of ore were stacked on the leach pad, with an average gold grade of 0.72 g/t and an
average silver grade of 4.28 g/t.
As at June 30, 2024, the cash balance was $3,207 (including $30 recorded in assets classified as
held for sale); total bank debt, payables and other debts (including liabilities of $87 recorded in
assets classified as held for sale, excluding convertible debentures, Stream Agreement, lease
liabilities, tax payables and asset retirement obligations was $70,070 with net debt of $66,863.
On January 9, 2024 the Company entered into a turnkey engineering, procurement and
construction contract with Hexagon Build Engineering LLC for the Phase 2 Expansion.
The Phase 2 Expansion is proceeding according to the projected timelines and budgets, with
commissioning planned for the first quarter of 2026.
On March 15, 2024, the Company entered into an amended and restated Triple Flag Gold Prepay
loan for an additional advance of $5,000 with a repayment term over five months, commencing on
August 15, 2024, in five equal monthly deliveries of 530 ounces of gold for a total of 2,650 ounces
delivered to Triple Flag International Ltd.
On March 26, 2024, a milestone payment of $37,000 was made to the EPC contractor in relation
to the Phase 2 Expansion (as defined below) to fund procurement of major long lead items,
mobilization costs, early construction works and foundational work. The major long lead items
include flotations cells, grinding mills, cluster cyclones, thickener units, filters and pumping systems.
On April 11, 2024, the Company announced that it had entered into a share exchange agreement
pursuant to which it would acquire all of the issued and outstanding common shares of Boroo Gold
LLC from an indirect, wholly owned subsidiary of Boroo Pte Ltd. ("Boroo Singapore") in an all-
share transaction (the "Boroo Gold Transaction").
Additionally, on April 11, 2024, the Company entered into share purchase agreements, as
amended and restated on July 30, 2024 (the "A&R Share Purchase Agreements"), pursuant to
which it would sell the Tres Cruces Project to Boroo Singapore (the "Tres Cruces Transaction" and
together with the Boroo Gold Transaction, the "Transaction") for approximately CAD$12 million in
cash, payable over the next 18 months beginning as of the Closing Date (as defined in the A&R
Share Purchase Agreements).
On May 13, 2024, the Company filed meeting materials in respect of the proposed transaction with
Boroo Gold, where shareholders would, among other matters, vote on Steppe acquiring Boroo
Gold in exchange for common shares in the capital of the Company, resulting in Boroo Singapore
holding approximately 55.9% of Steppe, and Boroo Singapore acquiring the Tres Cruces Project
for approximately CAD$12 million.
On June 24, 2024, the shareholders of the Company approved the acquisition of Boroo Gold
pursuant to the share exchange agreement dated April 11, 2024 (the "Share Exchange
Agreement") and the sale of the Tres Cruces Oxide Project to Boroo Singapore, pursuant to the
A&R Share Purchase Agreements.
On August 1, 2024 the Company successfully completed the Transaction between the Company
and Boroo Singapore and its affiliates. Pursuant to the Boroo Gold Transaction, Boroo Singapore
was issued 143,796,574 common shares of the Company at a deemed issue price of $0.59 per
common share. Prior to the Boroo Gold Transaction, Boroo Singapore did not hold any securities
of the Company and upon completion of the Boroo Gold Transaction, Boroo Singapore holds
approximately 55.9% of the common shares of the Company. Pursuant to the Tres Cruces
Transaction, the Company sold the Tres Cruces Project to Boroo Singapore for CAD$11.7 million
in cash, payable in four instalments in 18 months from August 1, 2024.
Outlook
The acquisition of Boroo Gold is a transformational step for the Company. It accelerates the path to a
multi-asset Mongolia-focused mining group and, importantly, is projected to immediately provide strong
cash flow to support growth plans, further improved with the recent strong gold prices.
The near-term focus for the Company is on maximizing production and cash flows at both producing
mines and, executing on a successful completion of the Phase 2 Expansion, where construction activity
continues,
With the projected additional operating cash flow accruing from the Boroo Gold Transaction, the
Company expects to be well-placed to increase exploration activities at both production centres with the
aim of extending resources, reserves and production. The Company will also consider opportunistic
acquisitions in Mongolia.
The Company's condensed interim consolidated financial results for the quarter ended June 30, 2024
have been filed on SEDAR+. The full version of the condensed interim consolidated financial statements
and associated management's discussion & analysis can be viewed on the Company's website at
www.steppegold.com
or under the Company's profile on SEDAR+ at
www.sedarplus.ca
.
Board Changes
As a result of the Boroo Gold Transaction, and subject to stock exchange approval, Dulguun
Erdenebaatar has been appointed to the board of Steppe Gold pursuant to the Share Exchange
Agreement.
Steppe Gold Ltd.
Steppe Gold is Mongolia's premier precious metals company.
For Further information, please contact:
Bataa Tumur-Ochir, Chairman and CEO
Jeremy South, Senior Vice President and Chief Financial Officer
Elisa Tagarvaa, Investor Relations
Shangri-La office, Suite 1201, Olympic Street
19A, Sukhbaatar District 1,
Ulaanbaatar 14241, Mongolia
Tel: +976 7732 1914
Non-IFRS Performance Measures
The Company uses the following non-IFRS measures: Adjusted EBITDA, EBITDA and AISC. EBITDA is
earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as adjusted
earnings before interest, taxes, depreciation and amortization. AISC is calculated using cash costs in
addition to general and administration, asset retirement costs, and sustaining capital, less certain non-
recurring costs (notably exploration costs at the Mungu deposit) to provide an overall company outlook
on the total cost required to sell an ounce of gold.
Management believes that these non-IFRS measures provide useful information to investors in
measuring the financial performance of the Company for the reasons outlined below. These measures
do not have a standardized meaning prescribed by IFRS and therefore they may not be comparable to
similarly titled measures presented by other publicly traded companies and should not be construed as
an alternative to other financial measures determined in accordance with IFRS. The Company believes
that these measures, together with measures determined in accordance with IFRS, provide investors
with an improved ability to evaluate the underlying performance of the Company. The inclusion of these
measures is meant to provide additional information and should not be used as a substitute for
performance measures prepared in accordance with IFRS. These measures are not necessarily
standard and therefore may not be comparable to other issuers. Further details of non-IFRS measures
noted above can be found in the Company's management's discussion & analysis for the six months
ended June 30, 2024.
Cautionary Note Regarding Forward-Looking Statements
This news release contains certain statements or disclosures relating to the Company that are based on
the expectations of its management as well as assumptions made by and information currently available
to the Company which may constitute forward-looking statements or information ("forward-looking
statements") under applicable securities laws. All such statements and disclosures, other than those of
historical fact, which address activities, events, outcomes, results, or developments that the Company
anticipates or expects may, or will occur in the future (in whole or in part) should be considered forward-
looking statements. In some cases, forward-looking statements can be identified by the use of the words
"continued", "focus", "scheduled", "will", "projected", "opportunity", "expected", "planned" and similar
expressions. In particular, but without limiting the foregoing, this news release contains forward-looking
statements pertaining to the following: the anticipated benefits of the Boroo Gold Transaction; the
potential for value creation to Steppe Gold's shareholders; payments to be made under the amended
and restated gold prepay agreement; the strengths, characteristics and potential of the resulting
company and discussion of future plans, projections, objectives, estimates and forecasts and the timing
related thereto, including with respect to the Phase 2 Expansion and the ATO gold mine; and the
consideration of opportunistic acquisitions in Mongolia.
The forward-looking statements contained in this news release reflect several material factors and
expectations and assumptions of the Company including, without limitation: management team and
board of directors of Steppe Gold; material adverse effects on the business, properties and assets of
the Company; changes in business plans and strategies; market and capital finance conditions; risks
inherent to any capital financing transactions; changes in world commodity markets; currency
fluctuations; costs and supply of materials relevant to the mining industry; change in government and
changes to regulations affecting the mining industry; discrepancies between actual and estimated
production and test results, mineral reserves and resources and metallurgical recoveries; and such other
risk factors detailed from time to time in Steppe Gold's public disclosure documents, including, without
limitation, those risks identified in Steppe Gold's annual information form for the year ended December
31, 2023, which is available on SEDAR+ at
www.sedarplus.ca
.
Forward-looking statements are based on information available at the time those statements are made
and/or management's good faith belief as of that time with respect to future events and are subject to
risks and uncertainties that could cause actual performance or results to differ materially from those
expressed in or suggested by such forward-looking statements. Forward-looking statements speak only
as of the date those statements are made. Except as required by applicable law, Steppe Gold assumes
no obligation to update or to publicly announce the results of any change to any forward-looking
statement contained or incorporated by reference herein to reflect actual results, future events or
developments, changes in assumptions or changes in other factors affecting the forward-looking
statements. If Steppe Gold updates any one or more forward-looking statements, no inference should be
drawn that the company will make additional updates with respect to those or other forward-looking
statements. All forward-looking statements contained in this news release are expressly qualified in their
entirety by this cautionary statement.
To view the source version of this press release, please visit
https://www.newsfilecorp.com/release/219924