Steppe Gold Ltd (TSE:STGO) revealed that it has secured an initial tranche of debt funding for its project to expand production at its flagship ATO gold mine via fresh rock ores to 150,000 ounces equivalent a year.
The financing, obtained through Mongolia's Gold-2 program, is for the initial amount of around US$10.5 million, and was facilitated through the Central Bank of Mongolia and provided by the Trade and Development Bank of Mongolia (TDB).
READ: Stonegate Capital hikes price guidance on Steppe Gold to around C$3.55 thanks to ATO project potential
"With the expansion of the ATO Gold Mine now well underway, we are keen to ensure our financing arrangements allow us to move quickly to construction and then to production," said Steppe Gold's CEO Bataa Tumur-Ochir in a statement.
"We would particularly like to thank the Government of Mongolia and the government agencies for facilitating this program in support of safe, responsible gold production in Mongolia."
Enkhtaivan Ganbold, the deputy governor of the country's central bank, added that the institution was "supporting leading responsible mining companies and projects through commercial banks of Mongolia to accelerate gold production and export in Mongolia".
"Gold production and export play a vital role in the Mongolia economy, and we are pleased to support and finance the second phase of Steppe Gold's development programs through the Government's Gold-2 Program."
Including this new loan, Steppe Gold now has cash available of about US$34.5 million.
The group is advancing the bankable feasibility study (BFS) on the expansion project at the mine and earlier this month, said that "supported by a strong working capital position and regular cash flow from ATO operations", it was "optimistic in concluding project finance for the construction of the CIL facility and remaining infrastructure, to allow for commencement of construction by mid-2021".
Shares in Toronto added 3.56% to C$2.62 each.
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