Steppe Gold Announces 2023 Annual Financial Results

Ulaanbaatar, Mongolia–(Newsfile Corp. – April 1, 2024) – Steppe Gold Ltd. (TSX: STGO) (OTCQX: STPGF) (FSE: 2J9) (“Steppe Gold” or the “Company“) is pleased to announce its financial results for the year ended December 31, 2023.

HIGHLIGHTS

Fourth quarter and year ended December 31, 2023 Highlights

(all figures in US$000’s unless stated otherwise, except per unit figures which are in US$)

• For the three months and the year ending December 31, 2023, revenue amounted to $14,677 and $54,239, respectively. This was generated from the sale of 7,242 and 27,050 ounces of gold, and 17,673 and 71,367 ounces of silver, respectively.

• Average realized prices for the same periods were $1,977 and $1,948 per ounce for gold, and $20 and $21 per ounce for silver.

• Operating income from mine operations, before depreciation and depletion, was $7,906 and $31,606 for the three months and the year ending December 31, 2023, respectively.

• Adjusted EBITDA after stream payments totaled $2,639 and $11,297 for the three months and the year ending December 31, 2023, respectively.

• Site All-in Sustaining Costs were $984 and $839 per ounce sold for the three months and the year ending December 31, 2023, respectively. All-in Sustaining Cost was $1,281 and $1,140 per ounce sold for the same periods.

• During the three months and the year ending December 31, 2023, 244,501 and 726,059 tonnes of ore were mined, and 207,943 and 913,343 tonnes of ore were stacked on the leach pad, respectively. The average gold grade was 0.87 g/t and 0.86 g/t, and the average silver grade was 4.93 g/t and 4.24 g/t, for the same respective periods.

• As of December 31, 2023, the cash balance was $6,034 (including $28 recorded in ‘disposal group held for sale’). Total bank debt, payables, and other debts (including liabilities of $959 recorded in ‘disposal group held for sale’, but excluding convertible debentures and stream arrangements) amounted to $23,150, resulting in net debt of $17,116.

• The Company completed a private placement of 11,000,000 common shares on May 11, 2023, raising $9,020 in cash.

• On March 21, 2024, the Company announced an amended and restated gold prepay agreement of US$5 million.

• The acquisition of Anacortes Mining Corp. (“Anacortes”) was finalized on June 28, 2023. As a result, an additional 19,437,948 common shares were issued to Anacortes shareholders, and 924,654 common shares were issued to advisors involved in the transaction.

• On August 22, 2023, the Company announced the filing of a technical report for its 100% owned Tres Cruces Gold Oxide Project in Peru (the “Tres Cruces Project”).

• On July 11, 2023, the Company signed a binding term sheet with the Trade and Development Bank of Mongolia and affiliated entities for $150,000 in financing to fully fund the construction and completion of the Phase 2 Expansion at the ATO Gold Mine (the “Phase 2 Expansion”). This financing is divided into three tranches of $50,000 each, with the first tranche of $50,000 signed on August 30, 2023, and the second tranche of $40,400 funded on March 20, 2024.

• On January 9, 2024, the Company entered into a turnkey engineering, procurement, and construction contract (the “EPC Contract”) with Hexagon Build Engineering LLC (“Hexagon Build”) for the Phase 2 Expansion.

• An announcement on March 26, 2024, provided further details regarding the EPC Contract and the Phase 2 Expansion. A payment of $37,000 was made towards the Phase 2 Expansion, covering the procurement of major long lead items, mobilization costs, early construction works, and foundational work.

• The Phase 2 Expansion is progressing according to planned timelines and budgets, with commissioning expected in Q1 2026.

• On January 22, 2024, the Company announced a binding term sheet (the “Term Sheet”) with Steppe Gold, under which Steppe Gold will acquire all issued and outstanding common shares of Boroo Gold LLC (“Boroo Gold”) in an all-share transaction. The Term Sheet also grants Boroo Pte Ltd., or its affiliates, the first right to acquire the Tres Cruces Project at fair market value following the completion of the transaction.

Outlook

With the successful completion of the significant financing package and the initial $50,000 tranche fully utilized, the Company is now focused on executing the development of the Phase 2 Expansion in collaboration with its EPC partners at Hexagon Build.

This phase will include expediting the ordering of critical long lead items, initiating early construction and foundational works, and mobilizing resources to the site with Hexagon Build.

The potential acquisition of Boroo Gold is progressing smoothly, with the due diligence process now in its final stages. Additionally, negotiations for the sale of the Tres Cruces Project are ongoing.

The Company has filed its consolidated financial results for the year ending December 31, 2023 on SEDAR+. The complete version of the annual consolidated financial statements and accompanying management’s discussion & analysis are available for viewing on the Company’s website at www.steppegold.com or under the Company’s profile on SEDAR+ at www.sedarplus.ca.

Steppe Gold Ltd.

Steppe Gold is Mongolia’s premier precious metals company.

For Further information, please contact:
Bataa Tumur-Ochir, Chairman and CEO

Jeremy South, Senior Vice President and Chief Financial Officer

Shangri-La office, Suite 1201, Olympic Street
19A, Sukhbaatar District 1,
Ulaanbaatar 14241, Mongolia
Tel: +976 7732 1914

Non-IFRS Performance Measures

EBITDA is an acronym for earnings before interest, taxes, depreciation, and amortization. Adjusted EBITDA is defined as adjusted earnings before interest, taxes, depreciation, and amortization. More information about the Non-IFRS Performance Measures mentioned above can be found in the Company’s management’s discussion & analysis.

Cautionary Note Regarding Forward-Looking Statements

This news release contains certain statements or disclosures relating to the Company that are based on the expectations of its management as well as assumptions made by and information currently available to the Company which may constitute forward-looking statements or information (“forward-looking statements”) under applicable securities laws. All such statements and disclosures, other than those of historical fact, which address activities, events, outcomes, results, or developments that the Company anticipates or expects may, or will, occur in the future (in whole or in part) should be considered forward-looking statements. In some cases, forward-looking statements can be identified by the use of the words “continued”, “focus”, “scheduled”, “will”, “potential”, “planned” and similar expressions. In particular, but without limiting the foregoing, this news release contains forward-looking statements pertaining to the following: trading of the Company’s common shares and business; economic, and political conditions in Mongolia and Peru; and discussion of future plans, projections, objectives, estimates and forecasts and the timing related thereto, including with respect to the ATO Gold Mine, the Phase 2 Expansion, the EPC Contract, the Boroo Gold transaction and the sale of the Tres Cruces Project.

The forward-looking statements contained in this news release reflect several material factors and expectations and assumptions of the Company including, without limitation: exercise of any termination rights under the Term Sheet; the negotiation of definitive agreements in respect of the acquisition of Boroo Gold and the sale of the Tres Cruces Project; material adverse effects on the business, properties and assets of the Company; changes in business plans and strategies; market and capital finance conditions; risks inherent to any capital financing transactions; changes in world commodity markets; currency fluctuations; costs and supply of materials relevant to the mining industry; change in government; and changes to regulations affecting the mining industry.

The Company believes the material factors, expectations and assumptions reflected in the forward-looking statements are reasonable at this time, but no assurance can be given that these factors, expectations and assumptions will prove to be correct. The forward-looking statements included in this news release are not guarantees of future performance and should not be unduly relied upon. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements, including, without limitation: changes in world commodity markets, equity markets, costs and supply of materials relevant to the mining industry; changes in government; changes to regulations affecting the mining industry; and certain other risks detailed from time to time in the Company’s public disclosure documents, including, without limitation, those risks identified in this news release and in the Company’s annual information form dated April 1, 2024, copies of which are available on the Company’s SEDAR+ profile at www.sedarplus.ca. Readers are cautioned that the foregoing list of factors is not exhaustive and are cautioned not to place undue reliance on these forward-looking statements.

The forward-looking statements contained in this news release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the content of this news release.