TORONTO, ON – Steppe Gold Limited (TSX: STGO) (the “Company” or “Steppe Gold”) is pleased to provide an update on its progress in Mongolia.

The Company has been mining since November 2018 and has completed Phase I mining with 230,000 tonnes mined. It is now moving rapidly to completion of the ADR plant, ahead of first gold in H2 2019.

The majority of the capital expenditure has been incurred and the project remains under budget. At April 1, 2019, the Company had approximately US$2.7m (C$3.641) cash on hand. To ensure the Company is properly capitalized through to production, the Company believes it to be prudent to strengthen the balance sheet.

Accordingly, the Company announces today that it is conducting a non-brokered private placement of a minimum of US$5.0m (C$6.75m) aggregate principal amount of unsecured convertible debentures. This financing also allows Steppe Gold to proceed with a summer exploration program on the ATO-4-Mungu trend as well as the trenching and drilling program on the four discoveries made on our highly prospective Uudam Khundii Project in Bayankhongor Province, in the south west of the country.

The convertible debentures will bear interest from the date of closing at 10% per annum, calculated and payable semi-annually in arrears and will mature on the date that is three years from the date of issue. The convertible debentures will be convertible at the option of the holder into common shares of the Company (the“Common Shares”) at any time prior to maturity at a conversion price of C$0.90 per Common Share. The offering is subject to TSX approval and is expected to close on or about May 24, 2019.

The Company can confirm that it has firm commitments for the private placement from European investors for approximately US$5.0m (C$6.75m). This financing keeps the Company fully funded into production.

DEVELOPMENT UPDATE

Mining and Crushing
The Company has now completed Phase I mining with a total of 230,000 tonnes of ore and no waste being mined resulting in a zero strip ratio. The lack of waste has been a considerable bonus to the Company as we have significantly higher modelled gold grades on the Phase I mining program. Total mined gold grade for the Phase I mining program was 2.3 g/t gold equating to approximately 17,000oz of gold stacked on the pad for leaching. The Company is modelling a leach recovery for gold of 70% which would equate to approximately 12,000 oz of recoverable gold on the pad and available for leaching.

Leach Pad and Ponds
Cells 1 and 2 lining has now been completed. Initial ore stacking on cell 1 will continue for a further 10 days when Phase I ore mined will all be crushed and stacked for leaching. Both barren and pregnant ponds have been lined and pumps will be installed in the coming week. The storm water pond has also been completed and lined. The 800mm solution return pipe and the 500mm irrigation pipes have been installed. The 300mm water bore pipe to the ponds will be completed in early- mid May.

ADR Plant
The construction of the ADR facility building continues, with all steel installed and foundation concrete poured. Sandwich panels and roofing panels are currently being installed. All ADR facility equipment is on site and is being installed with the assistance of the manufacturer. Carbon columns, chemical mixing tanks and elution circuit platforms are now in place and connection of facilities is now underway. The Company has now successfully completed and tested two water bores MTB03 and MTB04. MTB04 being 100 meters from the plant with a flow rate of 6.8l/sec (facility requires 5.5l/sec). MTB03 will be utilised as a backup bore and has a flow rate of 5.0l/sec.

“We are pleased with the progress the team continues to make and are highly encouraged by the results of the Phase 1 mining program,” said Matthew Wood, President and CEO of the Company. “The updates above as well as the upcoming milestones bring us significantly closer to first gold production. The funds being raised in the current convertible debenture are a vote of confidence in the team at Steppe Gold and the quality of our assets.”

Download the update document for the selection of photos that have been included demonstrating activities on site: