Mongolia ATO gold mine passes 15,000 oz gold in first three months
Steppe Gold Ltd. [STGO-TSX] provided an update on its production ramp-up at its 100%-owned ATO gold mine in Mongolia.
The company made its first gold sales starting on April 23. Gold and silver is being produced and sold every 14 days. To date, Steppe has now sold a total of 15,389 oz gold and 4,978 oz silver in six separate deliveries. This has generated net cash flow, after royalty payments, of US$25.3 million. Average achieved gold price for the sales to date is $1,725/oz.
The company achieved commercial production in the second quarter just completed with all operations and facilities running to plan and all relevant metrics met. As at June 30, Steppe Gold has mined, crushed and stacked approximately 715,000 tonnes of ore onto Cell 1 where leaching continues. A further 160,000 tonnes of ore has been delivered to the ROM pad and is being crushed and stacked. Stacking of ore at Cell 2 has already commenced and leaching will begin in July.
Regular grade reconciliations continue to show strong outperformance to the published resource estimate with average grades of 2 g/t gold and some evidence of higher grade zones. Daily mining of ore continues from the ATO1 open cut with the ATO4 open cut being brought on-line in the coming months. Both the mining and stacking rates are being scaled up.
Despite the COVID-19 travel restrictions and border closing, Steppe Gold is continuing its operations without any material changes affecting the company.
The company remains on track to produce approximately 60,000 oz gold in its first year of production at cash costs of circa $500/oz from the ATO mine.
With strong cash generation from the ATO mine, the company is now working on expanding the open pit and processing facilities to increase gold production to a targeted 150,000 oz gold per annum.
Exploration drilling continues at ATO1, ATO4 and the Mungu discovery with two rigs. Steppe Gold has also begun exploration at its Uudam Khundii Project with a trenching program underway and followed by an initial drilling program.