Steppe Gold Ltd (TSE:STGO) revealed that the production ramp-up at its ATO mine in Mongolia was moving apace and the group had achieved commercial output in the second quarter to end-June 2020.
So far, the miner has sold a total of 15,389 ounces of gold and 4,978 ounces of silver in six separate deliveries, generating net cash flow, after royalty payments, of US$25.3 million, the group told investors.
READ: Steppe Gold has upside potential at flagship Mongolia project, says Stonegate Capital as it lifts valuation
The group said it remains on track to generate around 60,000 ounces of gold in its first year at cash costs of around US$500 per ounce, but with strong cash generation, it is now working to expand the open pit and processing facilities to increase output, targeting 150,000 ounces of gold a year.
"We are delighted to report a solid start to gold sales at the ATO Gold mine. With strong operating cash flows, we are now accelerating exploration and interpretation work and also planning a resource update to further underpin our view of the ATO Gold Mine as a large, long-life, low-cost precious metals project," Matthew Wood, Steppe's executive chairman said in a statement.
As at June 30, 2020, the firm has mined, crushed, and stacked approximately 715,000 tonnes of ore onto Cell 1 where leaching continues, it said.
A further 160,000 tonnes of ore has been delivered to the run-of-mine (ROM) pad and is being crushed and stacked. Stacking of ore at Cell 2 has already begun and leaching will begin in July, said Steppe.
Meanwhile, exploration drilling continues at ATO1, ATO4 and the Mungu discovery with two drilling rigs now on site, it added.
At its other asset in Mongolia- the Uudam Khundii Project, the firm said it has also begun exploration, with a trenching program underway and followed by an initial drilling program.
"Commencing commercial production is a major achievement towards our goal of becoming the largest and premier gold producer in Mongolia. Gold production plays a vital role in the Mongolian economy and the Company receives excellent support from the Mongolia governing bodies at all levels," said Bataa Tumur-Ochir, the president and CEO of Steppe Gold.
The firm noted that despite the coronavirus (COVID-19) travel restrictions and border closing, the miner was continuing its operations without any material changes affecting it.
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