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Stonegate Capital Partners Updates Coverage On Steppe Gold Ltd. (TSX:STGO)

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DALLAS, TX / ACCESSWIRE / September 24, 2020 / Steppe Gold Ltd. (TSX:STGO): The full report can be accessed by clicking on the following link: Q2FY20.pdf.

Company Description

Steppe Gold Ltd. is a precious metals exploration and production Company with current operations in Mongolia. The Company is currently developing its 100% owned Altan Tsaagan Ovoo Gold Project (ATO) acquired from Centerra Gold in September 2017, with production recently beginning in March 2020. The Company's portfolio also contains an 80% ownership in an exploration-stage mineral property called the Uudam Khundii (UK) with a 20% joint venture partner. Steppe Gold became public as the only mainboard mining IPO in 2018, raising $25M. The Company is headquartered out of Ulaanbaatar, Mongolia.


  • Flagship project starts commercial production - Steppe Gold's flagship project Altan Tsaagan Ovoo (ATO), is fully constructed and recently begun producing gold and silver. As of Q220, the ATO mine produced 15,300 oz and sold 12,458 gold oz and 3,728 silver oz for revenue of $19.5M. The Company remains on track to produce 60,000 oz of gold annually.

  • ATO property projected to generate positive cash flow - The ATO property is projected to produce strong annual cash flows with 2020 production expected to produce ~60,000 oz of gold per annum from the heap leach operation with cash cost per ounce of ~US$550 over the life of the mine. The Company believes this should equate to $40M+ of EBITDA.

  • ATO expansion project moving forward - Steppe has three diamond core exploration drilling rigs focusing on resource extensions at AT01 and AT04 as well as Mungu, a high grade, near-surface gold and silver potential site located northeast of the current resources at the ATO project. The Company is working to complete a bankable feasibility study into the expansion of the ATO Gold mine to increase gold production to 150,000 oz of gold annually and an estimated 10-year mine life. The Company is expecting to release its bankable feasibility study in Q121.

  • Additional exploration assets - Steppe Gold's Uudam Khundii (UK) property currently encompasses 14,397 hectares located 800km south-west of Ulaanbaatar and holds one exploration license. Steppe Gold has commenced initial exploration activities on the property, including geological mapping, geochemical sampling, geophysical surveys, and trenching.

  • Management team experienced - Management is well established and has a long operating history in Mongolia. The Company's newly appointed CEO, Bataa Tumur-Ochir, has extensive experience operating in Mongolia as CEO of Wolf Petroleum ltd., an oil and gas exploration Company, and Hunnu Coal Limited, a Mongolian Coal Company.

  • Capital raise adds to liquidity and expansion potential - In August 2020, Steppe Gold closed a C$15M investment by Eric Sprott and his investment vehicle. The Company sold 6.68M subscription receipts at C$2.15 per subscription receipt. Each subscription receipt converts into one common share and one warrant, excersiable at C$3.00 per common share within a 24 month period. The Company plans to use the net proceeds to advance its exploration and development projects as well as for working capital and general corporate purposes.

  • Valuation - We use a DCF analysis off our mine models for phase I and phase II at the ATO mine. Combining the separate valuations for phase I and phase II, we arrive at a range of CAD$3.10 to $4.05 with a mid-point of $3.55; see page 7 for further details.

About Stonegate Capital Partners

Stonegate Capital Partners is a Dallas-based corporate advisory firm dedicated to serving the specialized needs of small-cap public companies. Since our inception, our mission has been to find innovative, undervalued public companies for our network of leading institutional investors who seek high-quality investment opportunities.


Stonegate Capital Partners
(214) 987-4121

SOURCE: Stonegate Capital Partners

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