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Steppe Gold generates cash flow of US$8.5 million from gold and silver sales from its ATO mine in Mongolia

Published: 08:20 11 May 2020 EDT

Steppe Gold Ltd. -
Steppe added that it was on track to produce 60,000 ounces of gold this year at cash costs of around US$500 per ounce

Steppe Gold Ltd (TSE:STGO) revealed it has generated cash flow before stream obligations of US$8.5 million from gold and silver sales from its ATO mine in Mongolia, which remains on track to produce 60,000 ounces of gold this year.

In an update on operations, the miner said it has now kicked off sales and has so far sold 5,233 ounces of gold and 1,372 ounces of silver in two deliveries to the Central Bank of Mongolia.

READ: Steppe Gold expected to produce strong annual cash flows from its Altan Tsaagan Ovoo (ATO) mine in Mongolia, says Stonegate Capital

It comes after the group announced on March 25 this year that it had begun gold production at the flagship mine.

"To date the company has mined, crushed and stacked approximately 640,000t of ore at a grade of 2.0g/t gold onto Cell 1 where leaching is currently underway," the firm said in a statement.

"A further 100,000t of ore has been delivered to the ROM pad and is being crushed and stacked. Daily mining of ore continues from the ATO1 open cut and is currently being scaled up."

Steppe said it is on track to produce 60,000 ounces of gold this year at cash costs of around US$500 per ounce.

"Positive cash flows from the ATO Mine will go towards studies to expand the open pit and processing facilities for the company to increase gold production to a targeted 150,000 ounces of gold per annum.

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

Steppe also noted that the current coronavirus (COVID-19) pandemic has had no material impact on its operations, nor does the group expect it to impact 2020 production.

"Preventative measures are in place to ensure the well-being of employees and contractors and no risks were noted at the end of the quarter," it said.

"We are delighted to commence gold sales at the ATO Gold Mine. In a very difficult business environment we have been able to reach this key milestone," Matthew Wood, Steppe's executive chairman said in a statement.

The Central Bank of Mongolia added: "Steppe Gold is playing a vital role in growing our gold production and contributing to the foreign exchange reserves in Mongolia."

Contact the author at giles@proactiveinvestors.com

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