Proactive Investors - Hannam & Partners analysts believe the main catalysts for Steppe Gold’s stock price should be the start of developing the Phase 2 expansion of the ATO Gold Mine in Mongolia as well as achieving production guidance for 2023 of 25,000 to 30,000 ounces, this after the precious metals miner reported its second-quarter 2023 financial results.
In a note to clients, they value Steppe at C$2.90 per share, which implies 287% upside to the company’s current stock price.
"(The Phase 2 Expansion) will extend the life of ATO by 12 years to 2036 with average annual production of 103,000 ounces on a gold equivalent basis with a total of 1.237 million ounces on a gold equivalent basis recovered and with expanded production commencing in 2025," the analysts wrote.
They expect average all-in sustaining costs (AISC) of US$850 per ounce during the operation of Phase 2, while adding that the engineering, procurement and construction arrangements for Phase 2 should be completed by the end of the year.
Analysts at Hannam & Partners also noted that Steppe’s recent acquisition of Anacortes Mining and the Tres Cruces gold project in Peru would produce 68,000 ounces per year of gold, at an AISC of US$734 per ounce, after entering production following the commissioning of Phase 2.