welcome to CEO insights I'm Marilyn De Guzman with investing News Network I'm speaking with Anil warat Executive Vice President at step gold and he's providing us with some new updates on the company's AO gold wide hi Anil hi Ren good to be here yeah good to see see you so let's start a conversation with your recent announcement about a draw down that you've done for the at o wine operation could you provide a recap on that then what that means for the company yes uh for sure uh it was a material


announcement uh actually that which we put out in July uh so early summer we put out a 150 million us project financing announcement uh which allows us to be fully funded for our phase two expansion so a very material update back in the summer uh which we now reconfirmed by confirming we've drawn down on the first 10 million us of it so shows how real that package is I think that's maybe what investors were waiting for but what it shows is that we are continuing to advance our phase two uh


We've drisk the asset because now we're funded uh without raising Equity at these you know massively dilutive levels uh and phase two continues the path forward bring that much larger m and operation online in 2025 continues so a big win for our team massive endorsement for Mongolia our operating team uh and everything we've achieved to date including already producing 100,000 ounces from our current operation which is our phase one oxide mine that will continue to run until the phase two


operation comes online in the second half of 2025 so a major announcement a major win Equity friendly project financing deal that we've now started to draw down on in Advanced Construction okay can you give us a rundown on sort of the activities right now at the I understand it's in phase one uh right now at the at the Gold Mine uh provide an sort of an overview of what's going on right now at that line and what phase two would look like absolutely so as a reminder uh this project the ATL mining license uh is a


project that we bought it was Green Field but it had at 1.2 million ounces back in 2017 when we bought this from centa gold inclusive of uh 200 10,000 ounces of reserves today the ATL mine ATO deposit uh is just under 2 and a half million ounces of resources and 1.7 million ounces on the gold equivalent basis the reserves which is the reserves that back up this phase two expansion so uh qu quite a decent Siz footprint that's already in production uh we've been in production on the phase one


oxide operation in in mine since April 2020 so when the country was closed the world was essentially locked up we were were able to bring production online for the first time ever from our oxide mind with our 100% local team and that's The Importance of Being local in any jurisdiction not just Mongolia so very profitably um you know we we hit the ground running with uh producing 15,000 ounces our first ever quarter um during Q2 of 2020 uh at about $800 alling cost uh We've since produced 100,000 ounces


we just hit that Milestone uh just a few days ago actually produced over 100,000 ounces from this mine uh since we started in April 2020 and it'll continue to run until the end of 20202 so we have about 65,000 ounces of on a recovered basis remaining on the space one operation that will continue to produce and sell um and that's without finding any more oxid or or deposits on the property so what we're doing for the first time ever is starting a shallow drill program across the remaining 90% of our mining


license that we have not drilled uh with the hopes of uh finding new oxides if we do and we're successful this year and into the first half of next year we can extend the myli and production profile for phase one if not phase one will come offline at the end of 2025 there will be some residual production from the Heap bleach for the following couple years but phase two comes online and what phase two looks like today is a 12E my life at over 100,000 ounces perom on a gold equivalent basis so that's the real


prize the real production cash machine for the company uh that's real 12 years my life over 100 actually 103,000 ounces average for 12 years with a with a production profile of about 120,000 ounces for the first five years so our hope is that 120,000 ounces the first five years will continue for the next 10 15 years after that why because we're already finding additional mineralization or new discoveries underneath the deposits so we've only drilled down to about 350 to 400 meters depending on the deposits uh that are in


the current mind plan current reserves resources and feasibility study but we since then we've drilled underneath we found new mization so our our confidence is there that this 12E mind life will look probably more like a 50 to 20 years it'll probably continue to go after that as well so when you're talking to uh an investor right now what would you say to them why is now a good time to invest in stepco well well I I guess as I explained earlier first we um put together a project financing expansion


package that allows us to be fully funded without having to raise uh Equity uh and a massive delu of equity as as you would in normal project financing packages so we avoided that that's a huge win for any investor there's no overhang of some uh Equity Rays around the corner at these low low levels right we went to public at $2 a share before we bought our mine before we built our mine uh um we've raised most of our Capital at $2 a share or or or above and we're trading in in the high 70s today


and we don't need to raise money to get back to levels where we were and Beyond uh or even get to levels where our peers are uh second um management and board owned close to 25% of the company today you know we haven't sold a share since we' been public since May 2018 and we've bought more so we are aligned with our investors we feel the pain when the markets are rough like they are today and they have been for a while but we're here to ride a much bigger gain with our investors so that alignment is also


crucial and critical I think from from a team like ours uh it allows investors to to to know and understand that we feel the same pain they do when they look at the stock price um and and I think that's very very important and and it shows you know shows well how we put together this Equity friendly project financing deal which allows us to be fully funded to bring the much larger cash flow machine online so for any investor they get to come in um you know along this alongside Blue Chip investors


like Fidelity Investments Eric BR limb advisors a few family offices that are sophisticated globally and all of them have come in higher prices than AR sellers uh and they're coming in and bought more on markets so I think that's the proof in the pudding in terms of the alignment between ourselves and some of our other investors already uh you don't have an overhang of of some massive delative Equity race we've put together a real package for funding and we've now demonstrated that by announcing we've


already drawn down on that so uh in all of that we offer this current production we offer expansion on that production that's funded yet we still have all the expiration upside and Sizzle that any sporco out there has that's both in Mongolia and also in Peru an asset that we acquired uh the end of June this year which added another two and a half million ounces uh to our balance sheet so we're just under a 5 million ounce company today with a production and expansion and a production pipeline for


development down the road organically that can bring us to over 200,000 ounces that's a pretty good story and to add to that story I know that you have other projects in Mongolia as well do you want to uh sort of just provide an overview and an update on all those other projects yes so we have a second project that we also acquired in 2017 in the southwest of the country so about 1500 kilometers Southwest no synergies between the the two assets but it's in a highly perspective new gold Province and


District uh it's a 14,400 hectare expiration license since uh so it's it is early days uh for us for the amount of capital we put towards that project but we've done the groundwork IP magnetic soil sampling trenching from surface have yielded results of one one and a half grams gold 450 gram silver 3% copper and Lead uh very encouraging uh results but what's what's even more encouraging is the fact that uh our our peers and colleagues Ed resources uh have the licenses at joining our license to the


north south so they've be there uh for a lot longer than we have uh they have over a million ounces on the balance sheet today I think they're they say they'll have two million between the two licenses uh so we're in the right area someone else is advancing it uh quicker than we can in fact they're working on building a mine on the license joining to the South so in in the right area uh right right opportunity down the road for us as we continue to bring more cash flow online we can self fund ation down


here in the hundy project or UK for short and we do believe that's another area for consolidation other opportunities to bring rolling more Assets in that region and then go build the same thing we did in in our our Northeast uh uh project in dno province is is replicate what we've done create 300 plus jobs uh build a mine and that could be our next production Center in country so is there a pathway for production for your for these other projects that you have yeah so the second project in Mongolia the udam


hundi project is still early days we'll have to do some drilling get to a resource Advance permitting um but we're obviously in the right area where another mine's being built as we speak um so it's still a few years away however Peru with the two and a half million ales we acquired uh this year is a very similar project to our ATO project so it has oxides at surface sulfides below something the oxides are three times the size of our Mongolian phase one operation so our goal erors to


advance that to a feasibility study make make it a build ready project by the time phase two is up and running and spinning off cash in Mongolia so Advanced social license permitting and eventually put our own feasibility WP on that project and then we can use our own cash flow as the equity contribution alongside debt to go build what we've already done in Mongolia down in Peru build out a local team in Peru maybe bring in a couple of our our our experts from Mongolia who already built and


Opera to the heat bleach and replicate it there and then we have a prod two production centers in two different jurisdictions so there is a path but it's it's there's a sequence we're not going to build more than one m at once so uh phase two Mongolia is certainly our well thanks again an Neil for your time to speak with me today and provid providing some updates on your company's projects thanks for having me and thanks everyone for watching join us again next time for another engaging


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