Steppe Gold Ltd. (TSX: STGO | OTCQX: STPGF | FSE: 2J9) has entered into a binding term sheet pursuant to which Steppe Gold, either directly or through a wholly-owned subsidiary, will acquire all of the issued and outstanding common shares of Boroo Gold LLC in an all-share transaction.
The beneficial shareholder of Boroo Gold will directly or indirectly hold a 58.8% interest in Steppe Gold upon completion of the proposed transaction.
Bataa Tumur-Ochir, chairman and CEO of Steppe Gold, stated, “The Boroo Gold acquisition will establish Steppe Gold as Mongolia’s largest and leading gold producer. Our production is expected to triple over the next two years to 90,000oz and 160,000oz by 2026, increasing our financial strength to repay the non-dilutive US$150M project financing for the ATO Gold Mine Phase 2 Expansion and to advance our exploration portfolio. It also provides shareholders with improved optionality at our Tres Cruces gold project in Peru while maintaining our focus on growing our production profile in Mongolia.”
The proposed transaction is subject to the negotiation of definitive agreements which will be negotiated during an exclusivity period ending on 18 March 2024. The definitive agreements are expected to include customary representations, warranties, deal protections, including non-solicitation covenants, and reciprocal expense reimbursement in certain circumstances.
In addition, for a period of six months following the completion of the proposed transaction, Boroo, and/or its associates will have a right of first refusal to acquire the Tres Cruces gold project located in Peru through its wholly-owned subsidiary, Anacortes Mining Corp., at fair market value.
The proposed transaction will likely provide meaningful benefits to shareholders of Steppe Gold, including increased production from 30,000 to 90,000ozpa in 2024 and 2025 and strong cash flow and increased financial strength to service the ATO Gold Mine Phase 2 Expansion project financing.
To find out more, please visit www.steppegold.com
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