CAPITALIZATION

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

 

BOARD OF DIRECTORS

MATTHEW WOOD
Chairman, President and CEO

BATAA TUMUR-OCHIR
Director and Vice President Mongolia

ANEEL WARAICH
Director and Executive Vice President

JEREMY SOUTH
Director

PATRICK MICHAELS
Director

DR. ZAMBA BATJARGAL                                                                                                                                

Director

TORONTO, May 28, 2018 (GLOBE NEWSWIRE) — Steppe Gold Limited (TSX:STGO) (the “Company” or “Steppe Gold”) is very pleased to announce that the Company has commenced an extensive infill and extensional resource drilling program at its 100% owned Altan Tsagaan Ovoo Project (“the ATO Project”), located in Mongolia.

HIGHLIGHTS

• Stage 2 drilling program commenced with three drilling rigs currently operating on site.
• Drilling currently focused on resource infill and extension drilling at the ATO4 Deposit.
• Upon completion of drilling at the ATO4 Deposit, Drilling rigs will move onto infill and extension drilling at the ATO2 deposit followed by drilling at the Mungu Deposit and the Mungu Gap and Mungu Extended prospects.
• Since taking control of the ATO Project the Company has completed a highly successful Stage 1 drilling program totaling 66 holes at the Mungu Deposit, three drill holes at the ATO4 Deposit, four drill holes at the Tsagaan Temeet prospect, one drill hole at the Bayanmunkh prospect and sixteen shallow drill holes at the Bayangol prospect for a total of 8,821.6 meters.
• Results from the Stage 1 drilling program included:

MUNGU DEPOSIT

• MG-49 46              metres at 14.98gt gold and 82.02gt silver from 218.5 metres
• MG-5 152               metres at 3.28gt gold and 29.79gt silver from 258 metres

ATO4

• ATO-295               90.6 metres at 2.57gt gold and 10.6gt silver from 39 metres

A photo accompanying this announcement is available at http://www.globenewswire.com/NewsRoom/AttachmentNg/3149234f-bc5b-408f-9134-251950d7a9aa

STAGE 2 DRILLING PROGRAM

The Company has now commenced its Stage 2 drilling program at its 100% owned ATO Project. A total of three diamond core drilling rigs are currently operating on site and conducting infill and resource extension drilling at the ATO4 Deposit. All drilling is HQ diamond drill core.

Upon completion of the drilling at the ATO4 Deposit, drilling rigs will move onto infill and extension drilling at the ATO2 deposit, followed by drilling at the Mungu Deposit, Mungu Gap and the Mungu Extended prospects.

The Company will have an active drilling program throughout 2018 with updated resource calculations for the ATO Deposits and Mungu Deposit by the end of 2018. The Company expects to have regular drilling updates covering the Stage 2 drilling program in the coming months.

STAGE 1 DRILLING PROGRAM

Since taking control of the ATO Project the Company has completed a highly successful Stage 1 drilling program totalling 66 holes at the Mungu Deposit, three drill holes at the ATO4 Deposit, four drill holes at Tsagaan Temeet prospect, one drill hole at the Bayanmunkh prospect and sixteen drill holes at the Bayangol prospect for a total of 8,821.6 metres.

Table 1. Stage 1 Drill hole summary

Deposit Prospect	Drill holes number	Total (m)
Mungu	66	6333.4
ATO4	3	816.4
Bayangol	16	928.5
Bayanmunkh	1	449
TOTAL ALL	90	8821.6

A photo accompanying this announcement is available at http://www.globenewswire.com/NewsRoom/AttachmentNg/224ad8d0-f05a-4e00-a955-42931f180ea5

MUNGU DEPOSIT – STAGE 1 PROGRAM

The drilling program was successful in outlining and extending known gold and silver mineralization. In addition to this, new high grade zones in deeper parts of the deposit were discovered that increased the understanding on the controls of mineralized structures and associated feeder zones.

Table 2. Significant intersects from the Mungu Deposit.

Drill Hole	DH depth, m		From (m)	To (m)	Core Length (m)	Au (g/t)	Ag (ppm)
MG-49	380.4		218.5	264.5	46	14.98	82.02
		Includes	218.5	241.5	23	26.18	68.8
MG-50	434.4		250	290.4	40.4	0.84	140.95
			312.5	331.6	19.1	1.37	1.62
		Includes	326.5	329.5	3	4.05	2.46
MG-51	458		190	204.4	14.4	0.8	11.57
			229.1	236	6.9	0.81	17.2
			258	320.5	62.5	3.28	29.79
			340.5	345.5	5	1.02	42.12
		Includes	269	271	2	75.7	298.8
		Includes	312	319.5	7.5	3.27	111.87
MG-52	485		190	342	152	2.06	72.64
		Includes	300	342	42	5.75	16.97
MG-53	476		341	357.7	16.7	0.77	28.05
			433	443	10	1.82	7.21

Information provided is not a true thickness (or width).

Table 3. Significant drill results from oxide drilling program, Mungu deposit

ID	Drill Hole	DH_depth (m)	From (m)	To (m)	Core Length (m)	Au (g/t)	Ag (ppm)
	MG-54	68	12	15	3	0.6	22.76
1			19	37.3	18.3	1.84	130.21
			27	33	6	3.3	333.4
2	MG-63	80	35.95	54	18.05	0.7	49.72
3	MG-66	113	25.8	48.5	22.7	1.13	67.5
			83.5	102	18.5	0.79	42
4	MG-67	137	0	56	56	1.03	35.15
5	MG-68	110	13.6	24.25	10.65	1.59	87.1
			27.5	31.5	4	0.15	133
6	MG-70	116	39	116	77	0.41	48.7
7	MG-71	95	14	95	81	1	45.46
8	MG-72	57	2	57	55	0.92	46.25
9	MG-74	104	27	104	77	0.63	34.57
10	MG-75	90	14	67	53	0.85	22.54
			78	88	10	0.75	24.64
11	MG-78	65	18	32	14	1.3	77.49
12	MG-79	44	1	12	11	0.78	25.41
			17	21	4	0.57	15.75

Information provided is not a true thickness (or width).

ATO4 DEPOSIT – STAGE 1 PROGRAM

Steppe Gold drilled a total of three diamond drill holes at ATO4 (ATO-295, ATO-296) and one scout drill hole (ATO-294) to the south of the deposit. The scout drill hole failed to intersect mineralization. Significant intersections were made in both the other two drill holes.

Table 4. Significant intersects from drilling at ATO4 Deposit.

Drill Hole	DH_depth (m)		From (m)	To (m)	Core Length (m)	Au (g/t)	Ag (ppm)
ATO-295	224		13.4	22.6	9.2	1.32	16.71
			39	129.6	90.6	2.71	10.6
		includes	69	80	11	10.82	11.24
		includes	96	102	6	7.07	9.6
ATO-296	299	includes	29.3	35.5	6.2	1.20	12.95
			81.5	122.5	41	0.89	4.68
		includes	88.5	91.5	3	3.90	7.5

Information provided is not a true thickness (or width).

BAYANGOL PROSPECT – STAGE 1 PROGRAM

The Bayangol prospect is located approximately 3 km north east of the ATO Deposit and just over 1 km from the Mungu Deposit. The Company completed a program of 16 shallow diamond core drill holes in for a total of 928.3 metres. A significant result was achieved from drill hole BG-15 which intersected weak gold mineralization from 31m to the end of drill hole at 80 metres.

BG-15 49 metres at 0.26gt gold and 9gt silver from 31 metres.

Importantly, the mineralization and alteration intercepted in hole BG-15 is identical to that seen at the Mungu Deposit. Additional drilling will be completed at the Bayangol Prospect when priorities allow.

BAYANMUNKH PROJECT – STAGE 1 PROGRAM

The Bayan Munkh prospect is located approximately 25 km north east of the ATO and Mungu Deposits. A recently completed deep IP dipole-dipole survey has identified up to 500 m in diameter coincident chargeability and resistivity anomaly. The anomaly is located within a magnetic low and copper geochemical anomaly which is interpreted to be a possible gold copper porphyry system.

To test the large oval shape IP anomaly one single scout drill hole BM-13 was drilled to a depth of 449m. No significant results were achieved for this drill hole, although native copper was observed along late stage fractures in the drill core between 87 to 95 metres. Subsequent 3D modelling of the IP result identified a promising high chargeability anomaly on Bayanmunkh porphyry target which will be drilled when priorities allow.

TSAGAAN TEMEET PROJECT – STAGE 1 PROGRAM

The Tsagaan Temeet project is located 17 km to north of the ATO and Mungu Deposits. A total of four holes were drilled for 294.3 metres with no significant results being intercepted.

SAMPLING and QA-QC

At the Mungu Deposit drill holes were sampled at continuous 1 meter intervals, regardless of lithological and mineralogical variations. No selective sampling was undertaken. A total of 3,237 core samples were collected and analyzed.

Samples were processed and analyzed by ALS Laboratory in Ulaanbaatar, Mongolia. At the prep facility, all rock samples are logged in the tracking system, weighed, dried and finely crushed to better than 70% passing a 2 mm (Tyler 9 mesh, US Std. No.10) screen. This procedure coded as CRU-31 for all ALS Labs.

A split of up to 250g is taken and pulverized to better than 85% passing a 75 micron (Tyler 200 mesh, US Std. No. 200) screen (Figure 24). Drill core samples up to 3kg. This procedure coded as PREP-31 for all ALS Labs.

A 50-gram sample from all pulverized samples were analyzed for multi elements analysis by 35-element (ME-ICP41). Another 50-gram sample from remaining pulps were analyzed for gold assay using a fire assay analytical method with finish of AAS (Au-AA26, 50gr FA AA finish, instrument AAS). During ICP analysis, a 0.5g sample within 10 ml of solution was submitted for analysis. All samples were analyzed by 35-element ICP to test for abundances of Ag, Al, As, B, Ba, Be, Bi, Ca, Cd, Co, Cr, Cu, Fe, Ga, Hg, K, La, Mg, Mn, Mo, Na, Ni, P, Pb, S, Sb, Sc, Sr, Th, Ti, Tl, U, V, W, and Zn.

A high core recovery of more than 97% was achieved for the 2017 drilling program.

All holes were diamond drilled using a HQ core size. Down-hole orientation surveys were carried out at 50 metre intervals and/or at the bottom of each hole. Down-hole readings included both dip and azimuth of the hole at the recorded depths. Down hole surveys were completed for all drill holes.

QAQC for ALS internal and external check-ups for Mungu and other projects assays were conducted by insertion of SRM, duplicates and blanks for 2017. Inserted Industry CRMs and the results have, in the main, accurately reflected the original assays and expected values. Blank standards were all reported below <5ppb Au, which is shows that Lab is “clear”. Analysis of the internal repeat results for Au, Zn, Pb and As, show an acceptable correlation (most results within the 10 % error limits) with the original sample results. This indicates the sample pulps were reasonably homogenous after sample preparation resulting in high precision and repeatable sample assays.

Oyungerel Bayanjargal 
Independent Qualified Person
MAusIMM (CP)

Ms. Oyungerel (Gerlee) Bayanjargal has 25 years of experience in the Mongolian geology and mining environment and has also worked as a resource consultant at Snowden in Australia. Gerlee has specialized on gold and polymetallic deposits both hard rock and placer and estimated several gold deposits resources and reserves in Mongolia. Most recently she was the Chief Mine Geologist at Boroo Gold Mine where she had worked since 2004 for Centerra Gold Inc, a Canadian company. Gerlee has been involved with project reviews, exploration and mining for hard rock and alluvial gold deposits in Mongolia, Kirgizstan and Kazakhstan.

The exploration activities and their related results included in this announcement were reviewed by Gerlee. According to Gerlee, all exploration and drilling work carried out to date on the Company’s projects mentioned in this release follow clear mining industry standards.

Gerlee is a Principal Consultant for GSTATS Consulting LL. She is Deputy Chair of the MRC for the Mongolian Professional Institute of Geosciences and Mining. Gerlee is a Member of the Australian Institute Mining and Metallurgy and accredited as a Chartered Professional under the Discipline of Geology. She is also a Professional Engineer of Mongolia in discipline of Geology. Gerlee holds a Master of Science degree in Mineral Resource Exploration from The Netherlands and the Bachelor of Science degrees in Geology and Mathematics both from Mongolia.

CONTACT INFORMATION

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,
Canada

Tel: +1 647 697 0577

TRANSFER AGENT:

Lori Winchester
Senior Relationship Manager, Client Management

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

Drilling commences at ATO project