Steppe Gold, which is developing one of Mongolia’s major primary gold projects, aims to triple its annual output and become the country’s largest gold producer by acquiring Boroo Gold LLC, which operates in Mandal soum of Selenge province.
In a press release on 24 January 2024, Steppe Gold announced that it had signed an agreement to acquire Boroo Gold through a share swap.
In addition, Boroo Gold and its partner companies will hold a right of first refusal to buy the Tres Cruces gold mine in Peru at market price, valid for six months after the deal closes.
Following the announcement, Steppe Gold’s shares rose 1.5 per cent on Monday, taking its market capitalisation to US$52 million.
Founded in 1997, Boroo Gold’s main assets are its primary gold deposit in Selenge province and the adjacent Ulaanbulag mine.
Together the two mines produce an average of more than 60,000 ounces of gold a year, and the reserves established in their feasibility studies can be mined beyond 2030. Steppe Gold’s own Altan Tsagaan Ovoo mine produces 30,000 ounces a year.
Steppe Gold aims to produce 200,000 ounces of precious metal a year in future, and added that it could produce 160,000 ounces of gold a year by 2026.
As a result of the deal, Steppe Gold’s current reserves are expected to be valued at the equivalent of more than 4 million ounces of gold.
“Within the next two years our production will triple to 90,000 ounces, and reach 160,000 ounces by 2026. The company’s financial strength will grow, letting us repay the US$150 million financing the second-phase expansion of the Altan Tsagaan Ovoo gold project and carry out several exploration programmes,” Steppe Gold’s Chief Executive T. Bataa told the press.
In July 2023 Steppe Gold signed a US$150 million agreement to finance the second phase of the expansion of its main deposit, the Altan Tsagaan Ovoo mine. In this phase the mine plans to produce 103,000 ounces of gold over 12 years.
Steppe Gold and Boroo Gold will reach agreement and sign the contract in the coming weeks; the exclusivity period ends on 18 March 2024.
Source: Mining.com