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Development Update

TSX Symbol: STGO
Total Basic Shares O/S (M): 42.9

MATTHEW WOOD, Chairman, President and CEO
BATAA TUMUR-OCHIR, Director and Vice President Mongolia
ANEEL WARAICH, Director and Executive Vice President

TORONTO, June 27, 2018 (GLOBE NEWSWIRE) — Steppe Gold Limited (TSX:STGO) (the “Company” or “Steppe Gold”) is very pleased to announce the following development update towards initial production from its flagship Altan Tsagaan Ovoo Gold Project (ATO).

The Company remains under budget for the development of the ATO heap leach project. Over the past 10 months Steppe Gold has achieved major milestones including:

The Company has received all land certificates for the ATO project area.

Mining Contracts have been agreed with Mongolia’s leading operators. All mining contractors have demonstrated significant commitment and ability to establish their presence on site. The open pit mining contractor has now mobilized to site. Initial equipment includes a CAT 14H grader, CAT 330 Excavator, CAT D8 dozer and three Howo 30t trucks. Haul road construction and preparation for mining has now commenced.

Knight Piesold have completed the detailed leach pad and ponds design. Earth work for Stage 1 which consists of two cells at 500m x 100m each will commence in late June 2018. All liner, piping and emitters have now been ordered with a total cost for the leach pad of approximately USD3 million to complete commissioning.

All power will be supplied by CAT generators. The camp is run on a CAT C9 275kVA and DE110E2 as back up. Both generators have been fully paid for and commissioned, in addition to this the main power source for the ADR plant and crusher has been ordered consisting of a 1.2MW CAT3512B 2.0MW and a CAT 3516B for approximately USD800,000.

The fuel station has been completed with a maximum capacity of 200,000 liters of diesel fuel, with initial 180,000 liters delivered to site.
Two photos photo accompanying this announcement are available at:

200,000-liter fuel station
The 3 stage crushing unit has been purchased and the unit is currently in transit to site. The mobile crusher has a maximum output of 300 tonnes per hour and will crush down to <25mm. Expected delivery date is late June.
Two photos accompanying this announcement are available at:

Crushing unit in transit to site
ADR plant design has been completed. All equipment and installation material will be available from July 25th, 2018. Initial deposits have been made and a final payment of approximately USD1.3 million is due prior to delivery.

A fully equipped 200 man mining camp has been completed and fully paid for. Facilities include: offices, kitchen, guest rooms, laundry, medical, ger accommodation, and meeting rooms. All furnishings and services are also installed and fully paid for.
A photo accompanying this announcement is available at:

Four-man Ger
A photo accompanying this announcement is available at:

Main camp building
A photo accompanying this announcement is available at:

View of Camp and fire break
ALS Global have been contracted to provide all onsite laboratory facilities and services which will be housed in the ADR plant. There is no capital cost to the Company in this contract.

The GMobile telecommunications tower has been relocated to include the ATO mine site. Full services are now available.

Over the past six months, the operations team has grown to include the following key personnel. Over the next three months, the team will increase significantly to a maximum of 72 full-time people. All company employees will be on a 4 weeks on and 2 weeks off roster.

→ Vice President Operations
→ General Manager Processing
→ Mining Engineer
→ Senior Mining Geologist
→ Processing Plant Superintendent
→ Mining Geologist
→ Safety Superintendent
→ Safety Officer
→ Maintenance Superintendent
→ Mechanic
→ Environment Superintendent
→ Electrical Superintendent
→ Crusher Superintendent
→ Plant Supervisor
→ Human Resources Manager
→ Onsite office Administration and HR

The Company and its contractors will also employ a significant labor force from the local community.

A figure accompanying this announcement is available at:

A photo accompanying this announcement is available at:

Designed by Knight Piesold. (Highly experienced HL designers).
Stage 1 consists of 2 cells, drainage corridor, and ponds.
Stage 1 cells require very little cut and fill as the site has a natural 1-1.5 gradient slope.
Stage 1 cells can contain 600,000 tons of ore. (This is more than sufficient room to stack through the first winter before stage 2 construction commences).
Stage 1 operation requires 53m3/hr of water. (Nearby water source is greater than 200m3/hr).
Ore will be crushed to 25mm (3 stage jaw and cone crushers).
The ore will be truck stacked. (Less than 500m from the crusher to the leach pads).
The process is a standard ADR plant. (6 carbon columns containing 5 tons in each column).
Gold and silver bars will be produced onsite.

A figure accompanying this announcement is available at:

A figure accompanying this announcement is available at

Months Total Production ton ‘000 Total Waste ton ‘000 Mined Ore ton ‘000 Mined Au Grade Mined Ag Grade Strip Ratio

Jul-18 185 83 102 1.45 10.16 0.81
Aug-18 187 85 102 1.25 10.24 0.83
Sep-18 124 25 99 1.21 9.97 0.25
Oct-18 183 80 102 1.15 10.04 0.78
Nov-18 135 36 99 1.45 9.32 0.36
Dec-18 194 92 102 1.25 8.64 0.90
Total 1,007 400 607 1.29 9.73 0.66

Total Production for 2018 will be 1,007K tonnes, Ore Production 607K tonnes with and average grade of 1.29g/t with a strip Ratio of 0.66.

Capital Items Firm Quote Ordered Paid Delivered Installed Commissioned

Camp Y Y 100% 100% 95% 95%
Fuel Station Y Y 100% 100% 100% 100%
Crusher Y Y 100% 50% 15% 0%
ADR Plant Y Y 10% 0% 0% 0%
Leach Pad Y Y 50% 0% 0% 0%
Explosive Storage Y Y 0% 0% 0% 0%
Power Y Y 20% 50% 50% 50%

Major Contractor Firm Quote Awarded Onsite Operating
Camp Management Y Y Y Y
Security Y Y Y Y
Drill and Blast Y Y N N
Mining Y Y Y Y
Crusher and Pad stacking Y Y N N
Laboratory Services Y Y N N
Between July and November 2018, Steppe Gold will complete all construction and commissioning on:

Phase 1 Leach pad (2 cells 100m by 500m)
5 tonne ADR plant
Explosives magazine
Crusher commissioning
Site Power
Haul roads and site infrastructure

Steppe Gold is a precious metals exploration and development company with an aggressive growth strategy to build Steppe into the premier precious metals company in Mongolia. The Company owns the advanced staged Altan Tsaagan Ovoo (ATO) Gold Project, where three drilling rigs are currently undertaking exploration and development drilling. Construction of the ATO mine and heap leach project has commenced and the company expects initial annual production of 40,000 oz Au Eq per year with cash costs of sub US$350 per oz. The ATO project is being delivered for a CAPEX of sub US$20m.

The company’s exciting 80% owned Uudam Khundii (UK) Gold Exploration Project has an active program of geochemical and geophysical surveys underway with drilling planned later in 2018.

Mongolia is open for business, pro-mining development and one of the last great frontiers where giant mineral deposits can be found and developed.


The Company’s Head Office:
Shangri-La office, Suite 1201, Olympic street
19A, Sukhbaatar District 1,
Ulaanbaatar 14241, Mongolia
Tel: +976 7732 1914

Toronto Office:
90 Adelaide Street. W, Suite 400 Toronto, ON
M5H 3V9,
Tel: +1 647 697 0577

Transfer Agent:
Lori Winchester
Senior Relationship Manager, Client

Phone: +1 416 607-7898
Cell: +1 416 671-4558
Email: [email protected]

Development Update

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