TS. BYAMBATSEREN: THE ALTAN TSAGAAN OVOO PROJECT IS PLANNED TO CONTINUE UNTIL 2036

 

B. Ariunaa

Steppe Gold participated in the Eastern conference “Responsible Mining” organized by the National Mining Association of Mongolia. How is responsible mining developing in the Eastern region, especially in Dornod aimag where you work?

Our company was first established in 2016 and, in 2017, we were granted a special license to operate the Altan Tsagaan Ovoo mine located in Tsagaan-Ovoo soum of Dornod aimag. Subsequently, in 2018, our company issued its first shares on the Toronto Stock Exchange and became a public company. We successfully traded the shares and then invested in our mine and commenced construction work. We have been operating continuously since 2020.

Our mine is the only one in Tsagaan-Ovoo soum. The workers are mostly local residents. Today we employ about 350 people and 3 out of 4 workers are local youth. We also support local procurement in every way possible and purchase local goods, products and services. As part of our social responsibility, our goal is to reach out to every resident of Tsagaan-Ovoo soum, including the residents of Elst Buun bagh where our mine is located, to get their opinions and contribute to the long-term development of the community.

We regularly meet and talk with local herders, residents, government and non-governmental organizations. This helps us to check whether we are able to reflect the interests and needs of local people in our activities.

As we develop our relationship, local people are becoming more aware of and embracing the principles of responsible mining. Today, one in four households in Tsagaan-Ovoo soum is connected to our mine in one way or another. Responsible mining is characterized by a policy that includes all stakeholders, ensures their participation in all aspects, creates long-term benefits for the local community and minimizes environmental impact. Our company Steppe Gold will continue to adhere to this policy.

Could you tell us more about your social responsibility activities?

In 2019, our company signed a cooperation agreement with the governors of Dornod aimag and Tsagaan-Ovoo soum on “infrastructure development and job creation related to environmental protection, mining and plant construction”. We have been implementing this agreement up to now.

Over the period of the Altan Tsagaan Ovoo project, i.e. 11 years, it is planned to collect 11 billion MNT for the Local Development Fund. Funding will be provided every year according to the plan.

Although not covered by the cooperation agreement, the company continues to voluntarily invest in local infrastructure, construction, healthcare and education, totaling approximately 10 billion MNT. In particular, we have provided scholarships to over 1,600 local students since 2017.

How do you carry out environmental monitoring? In particular, how are funds raised for environmental assessment and restoration?

In 2022, our company was elected as a member of the Council of the Mongolian National Mining Association (MNMA). In accordance with the Voluntary Code of Practice on Responsible Mining implemented by the MNMA Council, we incorporate requirements such as corporate governance, transparency, labor relations, human rights, safety, health and environmental protection in our operations.

The environmental and social impact assessment of the project was conducted by the competent authority in 2019 and approved by the Ministry of Environment and Tourism. We also developed an Environmental Protection and Management Plan and presented it to local stakeholders for further cooperation.

Funds are allocated annually to the rehabilitation fund for implementation of the Environmental Management Plan.

In addition, the financial calculations required for mine closure and environmental rehabilitation are made by a professional organization and presented to the public every quarter according to the current plan of activities.

The relevant Mongolian legislation on the use and protection of chemicals is in line with international standards. We work within the legal framework concerning chemicals and prepare and submit relevant documents in a timely manner.

Monitoring and measurements are necessary to minimize the environmental impact of mining operations. How is environmental monitoring performed?

To study and monitor the potential impacts of mining activities, we place air, water and soil monitoring stations around the project site and regularly monitor the flora and fauna of the environment.

For example, air samples are collected monthly at 19 stations around the project site and soil samples collected quarterly at 25 locations. Subsequent tests are conducted at accredited laboratories.

In addition, groundwater levels are measured every 30 minutes in one well, every 7 days in 25 wells, every month in 29 wells and 7 herders’ wells, and quarterly in all wells of all herders’ households in the 2nd bagh. Surface and groundwater samples are taken from 47 monitoring points and tested in an accredited laboratory for more than 40 indicators, including chemical and physical composition of water, heavy metal content and bacteriology.

In addition, animal observations are conducted annually over an area of 3,000 km2 , and plant observations are conducted at 19 locations between May and October. Plant observations are conducted for the following indicators: vegetation cover, species composition and biomass.

Steppe Gold LLC adheres to the principles of environmental responsibility, regularly performing tasks such as minimizing the potential impact of the Altan Tsagaan Ovoo mine on the local environment and preventing any negative impact on it.

Steppe Gold is focused on the construction of the 2nd phase of the Altan Tsagaan Ovoo mine. The company announced that it has raised the $150 million in financing required for construction. How will this affect the company’s operations and finances?

In Phase 1 of the Altan Tsagaan Ovoo project, we will use heap leaching technology from oxidized ore. In Phase 2, we will establish a flotation processing plant and mine from primary ore. At this phase we plan to produce lead, zinc and pyrite concentrates. Extensive construction works are ahead. Initially, we plan to increase the capacity of the crusher and are close to commissioning the new crusher.

We estimate that the second phase plant will be commissioned in the fourth quarter of 2025. This will raise production volumes and increase the number of our employees by another 300 or so.

As a result, we will become one of the largest employers in the eastern region.

The allocation of $150 million has been confirmed, which is necessary for construction. This means that future work can continue regularly, without risk of interruption and according to plan.

Today, there are several projects operating on primary gold deposits in Mongolia. Primary deposits are more industrialized and have less environmental impact than placer deposits. However, they require more investment and financing. Therefore, we are happy to continue our work despite these special circumstances. With the realization of our 2nd phase project, the Altan Tsagaan Ovoo project is expected to continue until 2036.

Steppe Gold has acquired the Tres Cruces project in Peru, a high-grade oxide ore deposit. This deal looks very interesting. What are you going to do next?

This year, our company closed a deal to purchase the Tres Cruces project, located in a major gold-bearing area of Peru. But not in cash. The transaction was concluded by converting a certain portion of the company’s shares in accordance with mutually agreed terms.

The Tres Cruces mine is similar in structure to Altan Tsagaan Ovoo. This project has not yet commenced production and is in the development stage. Given the similarity of the deposits, we intend to develop the Tres Cruces project utilizing the experience and skills of our Mongolian specialists and engineers who have successfully managed the construction and operation of the Altan Tsagaan Ovoo project.

Steppe Gold shares are publicly traded on the Toronto Stock Exchange. It is a publicly traded stock company. There are very few companies operating in Mongolia that are listed on this exchange, which has a large concentration of publicly traded mining companies in the world. How do investors view Mongolia?

More than 20% of Steppe Gold’s shareholders are Mongolians. They are followed by major investors from the North American mining industry, including Triple Flag, as well as the so-called “Warren Buffett” of the gold industry, Eric Sprott, and other major investors.

Today, not only in the mining sector, but in all industries, the activities and policies implemented by any company for sustainable development attract the most attention. This is also evident in the attitude of investors. That is why this year, for the first time, we prepared the Environmental, Social and Governance Report on a voluntary basis.

This report covers the period since the launch of the Altan Tsagaan Ovoo mine, i.e. from 2018 to 2022, and details the work we have done, including environmental activities, contributions to the local community, as well as the standards we follow in governance and our efforts to establish the proper model.

The company used SASB (Sustainability Accounting Standards Board) and GRI (Global Reporting Initiative Index) - international research methods that are already used by companies whose shares are traded on international stock exchanges. These, in turn, serve as an objective tool for investors to assess the company’s activities and policies towards sustainable development.

Steppe Gold’s vision is to ensure sustainable socio-economic development of the local region by creating long-term value for all stakeholders, to responsibly manage and keep environmental impacts to a minimum, and to operate in a sustainable and long-term manner. This policy is becoming a key indicator of investor confidence.