Steppe Gold Expands Mongolian Gold Production with Boroo Acquisition and ATO Expansion

Steppe Gold Ltd. (TSX:STGO) has transformed its position in the Mongolian gold mining sector through strategic acquisitions and expansion projects that significantly boost production capacity and financial valuation. The company's acquisition of Boroo Gold from Boroo Singapore, finalized on August 1, 2024, represents a pivotal moment in Steppe Gold's growth trajectory. The Boroo Mine now contributes approximately 65,000 to 70,000 ounces of gold annually to Steppe Gold's portfolio, with projected production of 430,000 ounces through 2031. This acquisition elevates Steppe Gold's combined production to 80,000 to 85,000 ounces for both 2024 and 2025, marking a substantial increase in the company's operational scale and market presence.

The financial implications of the Boroo acquisition are substantial, with the mine's technical report indicating a Net Present Value of $260.1 million using a 7.5% discount rate and $2,300 per ounce gold price. The valuation suggests significant potential upside given current gold market conditions. By the third quarter of 2024, the Boroo mine had already produced approximately 57,244 ounces of gold, demonstrating its immediate contribution to Steppe Gold's production profile. The integration of Boroo's operations is expected to generate additional cost savings and operational synergies, with the company already reporting strong revenue growth in the second half of 2024 as a direct result of this strategic move.

Concurrent with the Boroo acquisition, Steppe Gold executed a complementary transaction by selling its Tres Cruces Project to Boroo Singapore for approximately CAD$12.0 million. This sale, also completed on August 1, 2024, allows Steppe Gold to concentrate resources on its core Mongolian operations while securing additional liquidity through cash payments structured over an 18-month period. This strategic repositioning enables the company to optimize its asset portfolio and focus on its highest-potential projects in Mongolia.

Steppe Gold's flagship ATO Gold Mine continues to demonstrate strong operational performance, with third quarter 2024 results showing 62,181 tonnes of ore mined and 125,898 tonnes stacked at an average grade of 0.56g/t. The company is advancing Phase 2 expansion of the ATO project, with production expected to commence in the first quarter of 2026. This expansion is supported by a fully funded $150 million finance package, with the initial $50 million tranche already deployed to accelerate construction and development activities. The technical report for the ATO expansion estimates an after-tax NPV5% of US$242 million and an Internal Rate of Return of 67% using conservative metal price assumptions. When adjusted for current gold prices of $2,300 per ounce and applying a 7.5% NPV rate, the project's valuation increases to $422.6 million, underscoring its significant value potential.

Stonegate Capital Partners' comprehensive valuation analysis positions Steppe Gold with substantial upside potential. Using an EV/NAV range of 0.60x to 0.80x, the firm calculates a valuation range of $0.47 to $0.81 per share, with a midpoint of $0.64. Alternative valuation using EV/Reserves methodology with a multiple range of 120x to 140x yields a share price range of $0.56 to $0.75, with a midpoint of $0.66. These developments collectively establish Steppe Gold as a dominant force in Mongolian gold mining, with enhanced production capabilities, strengthened financial metrics, and significant growth potential that positions the company for sustained success in the global gold market.