Today’s Q&A with Aneel Waraich EVP and Director at Steppe Gold Ltd
Steppe Gold was founded in 2017 and is headquartered in Ulaanbaatar, Mongolia. The company’s mission is to become the premier precious metals company in Mongolia, with a focus on responsible mining practices and sustainable development. The company’s management team has extensive experience in the mining industry, including expertise in exploration, construction, and operations.
Aneel is EVP and Director of Steppe Gold, and a financial services professional with over 18 years of progressive experience in capital markets having worked on over $1B in deals. He is the founder of ATMA Capital Markets, focusing on advising public and private companies in the Natural Resources sector. Aneel holds an MBA from the Goodman Institute of Investment Management at John Molson School of Business.
Steppe Gold Ltd: TSE: STGO
Steppe Gold Ltd (TSE: STGO) is a Mongolian metals and mining company listed on the Toronto Stock Exchange (TSX). It operates in the basic materials sector, focusing on gold and silver exploration and production.
Steppe Gold Operations:
Steppe Gold’s primary operation is the ATO Gold Mine, located in the South Gobi region of Mongolia. The mine is an open-pit operation that produces gold and silver from oxide ore. The company completed a feasibility study for the expansion of the ATO Gold Mine in 2022, which will increase production to over 100,000 ounces of gold per annum for an additional 12 years. This expansion is expected to be completed in the coming 24 months and will enable Steppe Gold to increase its market share in the precious metals industry.
In addition to the ATO Gold Mine, Steppe Gold has several exploration projects in Mongolia, including the Mungu gold and silver discovery and the Uudam Khundii Gold Project. These projects have significant potential for the discovery of new gold and silver deposits and could provide additional sources of revenue for the company in the future.
Steppe Gold to Acquire Anacortes Mining Corp and Expands into Peru (April 2023)
Steppe Gold Ltd, a leading diversified precious metals producer, has announced its binding agreement with the intent to acquire Anacortes Mining Corp, marking its expansion into Peru. With this acquisition, Steppe Gold aims to strengthen its position in the mining industry and expand its geographical reach. This acquisition adds another ~2.5M ounces of precious metals to the resources and also will allow Steppe to grow to ~200k ounces per year around 2026/2027.
Steppe Gold Growth Strategy:
Steppe Gold’s growth strategy is focused on three main pillars: organic growth, strategic partnerships, and acquisitions. The company’s organic growth strategy is centred around the expansion of the ATO Gold Mine, as well as the exploration of new projects in Mongolia. Strategic partnerships with other mining companies and investors will enable Steppe Gold to leverage its expertise and expand its operations more quickly. The company is also exploring additional opportunities for acquisitions in Mongolia and other countries, which could provide continued access to new markets and resources.
Steppe Gold Question Time….
1. Can you tell us more about Steppe Gold's mission to become the premier precious metals company in Mongolia, and how it aligns with the company's values and principles?
Since the start of our founding story in 2016, the Steppe Gold team has been very clear about our intention to build a ‘local-first’ company. I can confidently state that we have achieved that: starting from our seasoned local team’s track record in building trust and confidence with the local communities and all levels of government, in the Steppe vision since 2009. Our CEO is Mongolian, half our Board is Mongolian and, most importantly, 99% of our team are from our local communities.
Integrating into the surrounding communities, while bringing benefits to the local population has been at the core of Steppe Gold’s values and principles.
Our team is also very proud to have made national impact: the mining sector is very important for Mongolia’s economy. The mining sector continues to drive the country forward, improve the way of life for Mongolians, and create more jobs.
Steppe has been committed to building up the young Mongolian talent. We have hired local, ensured that our in-country team is trained on all operational best practices as the mining sector evolves, and we’ve provided over 1,000 scholarships to Mongolian youth.
2. How does Steppe Gold ensure responsible mining practices and sustainable development in its operations, and what steps has the company taken to minimize its environmental impact?
Last Fall, Steppe Gold was excited to announce that it became a signatory to the Responsible Mining Codex. Our company signed a Memorandum of Understanding with the Mongolian Minister of Mining and Heavy Industry and the Mongolian Mining Association. Operating best practices in responsible mining has always been at the core of our promise to our local communities, and all of our stakeholders in Mongolia: the signing of this commitment is further evidence of this.
Our ‘local-first’ values and approach that have guided us in every aspect of our work, also apply to Steppe’s view of the local environment. Steppe Gold has always pledged to our local partners and team members, that we want to leave a community better than when we first started our work there.
So our company is strongly committed to mitigating and rehabilitating environmental impacts as much as possible, by supporting biodiversity offsets, sustainable development, and even looking at renewable energies as part of its Phase 2 planning.
The Steppe Gold team develops and reports on a corporate Environmental Management Plan (EMP). Our EMP is developed with approval from all levels of government, to ensure compliance with all Government standards & requirements, and included consultation with stakeholders and local, impacted communities.
This comprehensive plan is comprised of numerous, critical sub-sections, including our: Biodiversity Offset Plan, Chemical Risk Management Plan, the Historic and Cultural Heritage Preservation Plan, and the Action Plan to Mitigate Adverse Impacts.
Our efforts have been recognized, with the Mongolian Government awarding us a 92.9% score on the implementation of Steppe’s Environmental Management Plan.
3. Could you provide us with more information about the ATO Gold Mine and the recent feasibility study completed for its expansion? What are the projected timelines for this expansion, and what impact do you expect it to have on the company's growth?
Steppe Gold recently announced an updated life of mine for our flagship, ATO gold mine in Mongolia, comprising a further 1.5 years in their Phase 2 Expansions, for a 12 year aggregate mine life. We also announced an increase in proven and probable gold mineral reserves from the 2021 mineral reserve and resources summary by 2.7 million tonnes, from 26.4 million to 29.1 million tonnes.
Our team has been working aggressively on the infrastructure enhancements for our Phase 2 expansion plans. We ended 2022 with the successful installation of a boiler house that enabled winter production, and have a new fixed crusher that will increase the Company’s production capacity by 4 times, up to 4Mt per annum/ at 50% of its power.
The market will hear further announcements on ongoing Phase 2 Expansion work, including camp expansion and plant design, that will ultimately enable annual production to over 100,000 oz Au Eq by 2025 with industry leading costs of ~$850 AISC per ounce (not too dissimilar to our current production).
What impact do we expect that all of this will have on Steppe’s growth? We are confident that the ATO gold mine will provide significantly increased value to Steppe’s shareholders, with an estimated gross revenue of $2.2 Billion over the next 14 years.
4. In addition to the ATO Gold Mine, Steppe Gold has several exploration projects in Mongolia. Could you elaborate on these projects and their potential for discovering new deposits?
We have two other highly-potential Mongolian exploration projects, the Mungu Gold and Silver Discovery, and the Uudam Khundii (“UK”) Project.
The Mungu gold and silver discovery is located immediately northeast of the current resource at the ATO Project. It is a structurally controlled epithermal gold-silver system with localized bonanza grades.
The high-grade gold-silver mineralization in the northern part of ATO Pipe #4 has been interpreted by Steppe Gold to have a steeply westward dipping structural control with a similar northeast strike projecting toward and possibly joining the Mungu zone of mineralization. The first drill hole completed by Steppe returned 46.0m grading 14.98 g/t Au and 82.02 g/t Ag.
The UK Project is a really interesting project that we acquired in 2017: Steppe Gold owns 14,400 hectares in a first of its kind, 80/20 JV with the provincial government of Bayankhongor. Our maiden drilling program commenced in July 2022 at 4 discoveries across this project, should yiel high grade results that are consistent with what Erdene Resources has discovered at adjoining licences to ours, as they are forecasting +2M oz AU eq.
At our Milky Way Prospect, we completed 18 trenches for 933 meters, highlighting a mineralized system of at least 700 meters in length and up to 12 meters wide with individual meter sampling results up to 1.49g/t gold, 450g/t silver, 2.98% copper, 3.98% lead and 0.31% Zinc. These are quite exciting results at surface which we can now drill.
Steppe Gold also announced a partnership with the state-owned Erdenes Alt Resource LLC, to develop the highly prospective Khurentsav gold project that adjoins our Uudam Khundii gold project. This consolidates Steppe Gold’s leading land position in this gold district, as we work to create a new, multi-million ounce exploration potential, gold district in Bayankhongor province.
5. How does Steppe Gold approach strategic partnerships with other mining companies and investors, and what benefits does the company expect to gain from such partnerships?
It doesn’t matter if we are in the gold business or any other business: relationships are the backbone to any business success. The Steppe leadership team was carefully assembled with seasoned executives, coming from diverse strengths: geology, regulatory, capital markets and operations.
Yet each of us can confidently say that our successes stem from the proven ability to build trust and confidence in our work, and in developing and maintaining strong relationships. That approach was used when we first started thinking of the Steppe Gold vision: ensuring that we had the confidence of the local communities and all levels of government.
As for other mining companies and investors: we have partnered with Erdenes Alt Resources in Bayankhogor, and entered into a binding agreement with Anacortes – Steppe has received the strong endorsement of investment partners like Triple Flag Precious Metals and the legendary mining investor Eric Sprott. Steppe Gold has approached each potential strategic partner with respect, and an acknowledgement that we are willing to take the time and work necessary to build a strong foundation of trust and confidence in our company’s expertise and value proposition.
6. How does Steppe Gold ensure the safety and wellbeing of its employees, and what steps has the company taken to support the local communities where it operates?
Ensuring that our team is safe and healthy, is Steppe Gold’s utmost priority. It goes hand-in-hand with ensuring that our employees are following best practices across the Board: and is part of our ongoing mandatory training. Health and Safety Training is at the core of our Company’s philosophy and operational management systems.
In 2023 especially, our team is focused on updating Steppe’s Health and Safety Training Policy and Safety Management Systems, that will firmly be embedded in our employee culture – during employee orientation and in ongoing training, as we continue to strive towards a zero-workplace injury environment.
7. How does Steppe Gold stay up-to-date with the latest technological advancements in the mining industry, and what steps does the company take to incorporate these advancements into its operations?
The infrastructure enhancements that I mentioned, related to our Phase 2 expansion plans, reinforces Steppe’s commitment to stay up-to-date with the latest mining technology. If it weren’t for these much-needed innovations, we wouldn’t have a new boiler house that enables the Steppe production team to keep going through the very harsh Mongolian winter climate.
The whole world, not just the mining sector, is experiencing and adapting to rapidly-changing technological opportunities.The rapid demand for electrification has been embraced worldwide, as we all shift away from fossil fuels. How and when Steppe uses power supplies for its operations, is always at the forefront of our long term decision making. Our new fixed crusher will allow us to produce at 4x the current capacity, yet at 50% of the power usage. And the Steppe team will continue to look for ways to incorporate greener, newer technology into its operational planning, and potentially integrate the use of renewable energy, as well.
8. How does Steppe Gold ensure that its operations are profitable, and what measures does the company take to manage its costs effectively?
Steppe Gold is always mindful of costs to ensure we can generate cashflow to grow our asset base and business as we have shown since production commenced in April 2020, in a very difficult environment where the Country was closed. Having a 99% local workforce allows us to keep costs well below those of western jurisdictions, and not flooding the site or country with more expensive ex-pat roles.
We also are large shareholders as a Board and Management team, so treat every dollar like its our own (essentially running this like a lean and small business). Having a longer-term view and showing contractors and employees we can keep them employed for over 14 years certainly helps! Finally, it helps that we are strategically located next to China where we have lower-cost but quality equipment available to us and a logistical advantage versus anyone else in the world.
9. Finally, what can you tell us about the recent agreement to acquire Anacortes Mining Corp in Peru, and how does that fit into Steppe Gold’s long term goals and corporate vision?
The recent announcement with plans to acquire Anacortes Mining in Peru, is the next logical move for a company that has been on an aggressive expansion trajectory, and has always had a vision to become a multi-asset, multi-jurisdiction precious metals company. Steppe’s team is delighted at the prospect of taking our first production success story, and being able to create new ones in another highly-prospective mining jurisdiction of Peru. Steppe Gold will now have development projects in two of the most exciting and still untapped gold provinces in the world – Mongolia and Peru. More importantly, the new combined company will have a potential development profile of over 200,000 ounces and a resource base of over 4.5 million gold equivalent ounces.
If we look at this announcement in the context of the global trends: we are seeing more and more consolidation in the junior mining sector to preserve long term shareholder value. Steppe Gold has now built a stronger development pipeline by adding this high-grade undeveloped oxide gold deposit, showing our commitment to a long term vision for our company (and to our shareholders).
10. How can people connect with Steppe Gold
You can follow us on
Website: https://steppegold.com
LinkedIn:https://www.linkedin.com/company/steppe-gold-ltd
Twitter: https://twitter.com/SteppeGold
Facebook: https://www.facebook.com/SteppeGold
Steppe Gold Head Office:
Tel: +976 7732 1914
Steppe Gold Toronto Office:
Spencer Campbell
Director SE Asia Consulting - Precious Metals Consultant
