Steppe Gold Ltd. (TSX: STGO | OTCQX: STPGF | FSE: 2J9) has provided an update on the pending transaction to acquire all of the issued and outstanding common shares of Boroo Gold LLC.
Shareholders of the company largely approved the acquisition of Boroo Gold pursuant to the share exchange agreement dated 11 April 2024, and the sale of the Tres Cruces Oxide Project to Boroo Singapore pursuant to the share purchase agreements dated 11 April 2024, for approximately CAD$12M in cash at the annual general and special meeting held in June.
Upon completion of the transaction, Steppe Gold will be the largest primary gold producer in Mongolia.
“We are incredibly pleased with the overwhelming shareholder support for our proposed transaction,” said Bataa Tumur-Ochir, chairman, and CEO of Steppe Gold. “This deal positions Steppe Gold to become a major force in the fast-growing Mongolian gold sector. Upon completion of the Transaction, we will be a multi-asset producer with robust cash flow, exciting exploration prospects, and a team of talented professionals poised to propel our continued growth. Importantly, this transaction increases our optionality for the financing for the ATO Gold Mine Phase 2 expansion and potential future acquisitions throughout Mongolia.”
The transaction is subject to customary closing conditions, including receipt of certain regulatory approvals, including the approvals of the Toronto Stock Exchange and applicable Mongolian authorities. The transaction is expected to close around 16 July 2024.
The company believes the transaction will deliver several benefits:
- Increased production: Combined gold output is projected to surpass 150,000oz annually by 2026. Boroo Gold brings substantial production to the table, with an estimated 431,000oz of gold expected between 2024 to 2031, with a projected average annual production of approximately 60,000oz in 2024, 2025, and 2026
- Financial boost: Immediate and strong cash flows to Steppe Gold. In 2023, Boroo Gold had revenue of US$132M on production of 67,315oz of gold, at an average achieved gold price of US$1,957/oz. 2024 production is expected to be at a similar level to 2023
- Cost savings: The combined entity is expected to see cost reductions through bulk purchasing and lower administrative expenses
- Exploration potential: The transaction expands Steppe Gold’s exploration opportunities near its existing mines, offering promising opportunities for future discoveries.
- Stronger focus: By divesting the Tres Cruces Project, Steppe Gold can concentrate its resources on its Mongolian assets
To find out more, please visit www.steppegold.com
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