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MINING | STEPPE GOLD
STEPPE GOLD Cash flow + development + exploration = Mongolia’s premier precious metals company
During a Mines and Money Online Connect event earlier this year, Steppe Gold’s director and executive vice president Aneel Waraich revealed how the precious metals explorer and producer considers itself a Mongolian company that is listed on the TSX. Building an in-country company has always been Steppe’s mission from the outset, but the fruits of this endeavour have become crystal clear in the last 12 months, after the company successfully commissioned and brought into production the Phase 1 of its ATO (Altan Tsagaan Ovoo) Gold Mine in Eastern Mongolia during the height of a global pandemic. “I think it’s important in any jurisdiction you do business - not just Mongolia – to be as local as possible,” Waraich tells RGN’s editor. “You need to show both locals and provincially/federally that there’s a benefit to that country or economy. That’s very important because you get the buy in. The more local you are, the more direct and indirect jobs you create, the more tax revenues you generate and crucially, you educate people; converting unskilled labour into a skilled permanent labour force, which we’ve done at Steppe.”
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Country-wide support Of Steppe’s entire workforce, 99% are Mongolian nationals, with 65% coming from Dornod province where the ATO mine is located. This preponderance towards local employment at the project has succeeded in attaining buy-in from the village level all the way to government, according to Waraich.
MINING | STEPPE GOLD
In fact, the level of political
we’re getting in-country, and
the company expands the ATO
support for the project was
second we’re able to operate
resource in the years to come.
encapsulated last year when
having a local staff without
In addition, during the last few
the Mongolian government
depending on expats. That’s
years the company has set up
actually provided capital
allowed us to bring production
scholarship programmes for
to Steppe in order to get
online during the toughest
185 students from the region,
ATO into production via its
times in recent memory,
helping them on the path to
sovereign wealth fund – an
become a producer, generate
higher education.
unprecedented move and
our own cash flow and
one that had never been done
strengthen our balance sheet.”
before in Mongolia’s mining sector.
Steppe has also sponsored promising athletes in-country
And the employment
and set up a meat and dairy
opportunities provided by
procurement scheme to supply
“We’ve seen the benefit two-
Steppe in the province are set
the mine camp with local
fold: first from the support
to increase exponentially as
produce while supporting
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ST E P P E GOLD
AT A G L A N C E
local farmers, as part of its
to considerable efforts to
role as an integral player in the
ensure the highest possible
province.
environmental standards at the ATO Phase 1 heap leach
“We’ve donated masks and
operation – a mining method
educated people in this region
which often holds negative
during the crisis. We’re doing
connotations due to the use of
what we can and that will grow
hazardous chemicals to extract
as we have more cash flow
the gold.
in availability to better lives STOCK TICKER: TSX:STGO MARKET CAPITALISATION: US$113.9 million (as of May 04, 2021) aj
permanently for those in the
Despite the project already
country,” Waraich pledges.
possessing high quality environmental permits and
On the environmental side of
licencing left by former owner
the now ubiquitously adhered
Centerra Gold, Steppe added to
to corporate principles
that work and completed new
of ‘ESG’, Steppe has gone
environmental approvals to
MINING | STEPPE GOLD
the latest global standards. As
all the way to keeping
pandemic, when Mongolia’s
a result, when a government
everyone safe on site.”
borders were closed last April. “Not many outfits can build
of the mine, Steppe received
Bringing ATO online
a score of 93% - the highest
Looking back a year,
successfully, globally. It
such score recorded across the
Waraich reflects on the
doesn’t matter where you
Mongolian mining sector.
major achievement that was
are, pandemic or not, very
Steppe reaching commercial
rarely do mines get built on
“We’re doing things to Western
production at the 50-60,000
a percentage basis of all the
standards. Sometimes you can
gold equivalent (Au eq) ounces
junior miners out there,”
cut corners in these emerging
per annum Phase 1 ATO mine,
Waraich points out.
markets, but we don’t do
which was constructed in just
that. We always want quality
14 months with a capex of
“Being able to build our first
and safety; our people come
US$20 million. All the more
mine in 14 months and bring
first. That goes with how you
impressive, it opened during
it online at the toughest time
prevent spillages of chemicals,
the height of the COVID-19
possible was a big win for us
agency recently completed an environmental inspection
mines and bring them online
and our methods. I feel we’ve
Mongolia. “We’re a tax and
Now, a year after reaching
always had an uphill battle at
royalty payer as well as an
commercial production at
this company given we’re in
employer, and importantly
ATO, Steppe plans to mark
an emerging market. We had
we’re a producer of gold and
the achievement with an
to manage perceptions of risk,
silver that is sold into the
imminent secondary listing
but we’ve built a mine and
domestic bank and other
on the Mongolian Stock
brought it online successfully,
approved banks, so we’re
Exchange, which will allow the
where is that risk people were
actually helping the country
domestic community to trade
worried about?”
increase its gold reserves
shares and own a piece of the
and the currency as and
asset that is located in their
Steppe’s executive VP is proud
when needed [i.e. through
own backyard.
to report that the company is
converting gold to currency
looked at as one of the prime
with FX].”
examples of how to invest, employ and build a mine in
1 17
MINING | STEPPE GOLD
Resource expansion
The 40,000+ metres
eq – a remarkable result given
programme focused on infill
the minimal focus outside the
While Steppe was capital
and extensional drilling at the
currently defined resource
constrained during the two
four deposits which comprise
base.
years prior to the opening of
the ATO project, and the
the mine, the company was
outcome of the exploration
The February 2021 drilling
still able to run an exploration
task was a doubling of the
update included a maiden
drilling programme with the
resource from 1.2 million
resource on the Mungu (the
aim of growing ATO resource.
ounces (Moz) to 2.45 Moz Au
word for silver in Mongolian)
ALTUS S
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“We’ve donated masks and educated people in this region during the crisis. We’re doing what we can and that will grow as we have more cash flow in availability to better lives permanently for those in the country” – Aneel Waraich, Steppe Gold executive vice president and director
discovery, which has measured
“These four deposits are still
and indicated resources of
open at depth and have only
7.57 Mt at 1.74 g/t for 424,000
been drilled down to about 400
ounces Au eq.
metres,” says Waraich. “What the recent resource update
In total, the ATO resource
does is set the stage for a much
includes 41.6 Mt of measured
bigger company with a bigger
and indicated resources with
resource base in the coming
an average grade of 1.67 g/t
years. Actually we think we
Au eq, figures that support the
can increase that again by
Phase two expansion plan for
multiples in the years ahead
which a bankable feasibility
through further exploration.”
study (BFS) is currently in the works.
MINING | STEPPE GOLD
Set to be released by mid-
production on the current
the cashflow from the first
2021, the BFS will assess the
mine plan.
year of production from the
economics of an extended
Phase 1 mine. Execution of
150,000 ounces per annum
All going well, construction
this plan would validate the
Au eq operation with a focus
of the Phase 2 operation
first two stages of Steppe’s CDE
on fresh rock ores, over
should commence in the
(Cashflow + Development +
an additional 10+ years of
second half of the year using
Exploration) value building model, while its ownership of
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MINING MINING | STEPPE | STEPPE GOLD GOLD
but having never received
licences in the Bayankhongor
Exploring in the West
gold belt will provide the
Steppe owns 14,400 hectares of
prospect that Steppe picked up
opportunity to develop an
prospective ground at the UK
along with ATO back in 2017.
entirely new project.
(Uudam Khundii) project in
one of the largest exploration
drilling itself, UK is an exciting
Western Mongolia. Located in and amongst gold discoveries
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RGN editor Jacob Ambrose Willson interviews Steppe Gold executive vice president and director Aneel Waraich, April 27, 2021
“Being able to build our first mine in 14 months and bring it online at the toughest time possible was a big win for us and our methods”
“Erdene Resource [Development Group]
IP soil sampling at some of the
has had some great
prospects and
success over the last
now they are
few years, delineating
drill ready.”
over 1 Moz between their two licences that
The next step is
adjoin ours. We’ve done
for the company
trenching and magnetic
ANEEL WARAICH, STEPPE GOLD EXECUTIVE VICE PRESIDENT
to
MINING | STEPPE GOLD
get down to drilling at the
Mungu. We have identified
“Obviously with copper
Milky Way prospect in May,
some targets with the resource
hitting new heights and just
which is one of four new gold
and 3D modelling and aim to
getting started, that is quite
discoveries that should yield
get back to drilling by June/
interesting. We will definitely
some very exciting exploration
July, alongside drilling at UK.”
look beyond the precious
results at UK in the near future, according to Wariach.
metals in terms of extracting And with some of the sampling
value. It can be a very
results from UK showing
significant part of our revenue
On the back of any exploration
additional base metals
stream when you bring these
success Steppe would move
mineralisation with the likes
assets online, both for ATO
to mobilise a second drill rig
of copper, lead and zinc, there
and Mungu and down at UK,”
at UK later this year, with a
is an opportunity for Steppe
Waraich concludes.
maximum of 20,000 metres
to diversify its commodity and
planned for the project, fully
revenue bases via this project.
self-funded. “The same goes for exploration at ATO and
Published by Anderson Murray Media Ltd
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