Steppe Gold Ltd (TSE:STGO) announced a milestone on Wednesday, namely the start of gold production at its flagship ATO mine in Mongolia.
Leaching of ore has now started after the firm mined, crushed and stacked around 533,000 tonnes of gold ore at a grade of 2 grams per ton (g/t), the precious metals miner told investors in a statement.
READ THE DEEP DIVE: Steppe Gold eyeing Mongolia's next major gold mine; on track to produce 60,000 ounces this year
There are 24,000 ounces on the pad and at an expected recovery rate of 70%, the firm says it has around US$38 million of recoverable gold based on a price of US$1,600 per ounce.
The firm has revealed that, as at January 29 this year, it had mined, crushed and stacked 400,000 tonnes at a grade of 1.96 g/t.
Steppe Gold said it remained on track to produce around 60,000 ounces of gold this year at cash costs of circa US$500 per ounce from its heap leap operations.
Cash flow from ATO will go towards studies to expand the open pit and processing facilities for it to increase gold production to a targeted 150,000 ounces of gold per year, it added.
The miner also plans to continue exploration on the Mungu Discovery and at the ATO deposits where all deposits remain open at depth. A revised resource and reserve statement is earmarked for the third quarter this year.
Bataa Tumur-Ochir, Steppe Gold's CEO said: "The company is very pleased with the strong support it has received from Mongolian financial institutions, stakeholders and shareholders to achieve a significant step in transforming the company from exploration and development to a mining and production company.
"The gold production at the ATO Gold Mine is vital to Mongolia in these challenging and uncertain times. The company continues to provide jobs and sustainable economic development in the local region and Mongolia."
Shares in Toronto added 1.30% to C$0.78.
Contact the author at email@example.com