The MiningIR Podcast #3: Feat. Aneel Waraich from Steppe Gold

Follow our podcast series on our Soundcloud channel or by clicking HERE for the transcriptions.

This week Liam is joined by Aneel from Steppe Gold to talk about building a mine in the world’s most sparsely populated country and their confidence for a gold market recovery in the near future.

Steppe Gold is a precious metals exploration and development company focussed on opportunities in Mongolia.  The Company owns the advanced-staged ATO Project in Mongolia, acquired in 2017 from Centerra Mongolia, a subsidiary of Centerra Gold Inc.  The Company has an objective to commence production in the third quarter of 2018.  Steppe Gold has also acquired an additional exploration-stage mineral property in Mongolia, the Uudam Khundii (UK) property.

Can’t listen right now? This interview has been conveniently transcribed by our friend Sara Kurt:

Liam Hardy:  Good day everybody. Thank you very much for joining the third edition of the mining IR podcast. Today, we’re going to be joined by Aneel Waraich from Steppe gold, we’ve got a gold deposit ready to go into production sometime next year in Mongolia and North Asia, how are you, sir Aneel?

Aneel Waraich:     I’m great. Thank you Liam.

Liam Hardy:  That’s good to hear Aneel. So for our listeners, could you just introduce yourself and tell us a little bit about the company?

Aneel Waraich:     Absolutely. Yeah, so my name is Aneel Waraich, I’m an executive VP and director of Steppe gold, Steppe gold was founded as a private company just over two years ago, here in Toronto, we went public this year on the main board of the TSX, it was actually I think so far the only main board IPO in the mining space for 2018, we raised twenty-five million dollars at the end of May and we’re actually currently building a mine in Mongolia.

So, Steppe Gold has actually two assets in the company today, the first asset that was acquired in the company, was actually an asset called {ATO} Altan Tsagaan Ovoo. Means white gold Hill in Mongolian and it was previously owned by Centerra  gold.

So Centerra  spent just under thirty million US$ on the project, drilled sixty-seven thousand meters, twenty thousand meters of trenching, fully permitted, fully licensed and actually did their own internal feasibility study on this project, which entailed building a heat bleed CIL in floatation, kind of all at once and what we did at Steppe gold with a very strong geological and exploration team we have in Mongolia, including Matt Wood, who’s a geologist by trade, who founded the company.

We reviewed all that data from Centerra and did two things. One, is we wanted a staged approach for putting the first oxides into production. So instead of building a much larger plant, we wanted to build a smaller heap leach project first, for twenty million capex that we’re building today and actually as per their news release yesterday, you know we’re getting there, we’re almost complete and still trying to get everything done by the end of the year and ideally under budget.

So the stage approach means less capital but it’s a very robust little starter project for the cash cost of three-fifty life-of-mine strip ratio of 0.66. So a very good starter project that actually could fund further exploration and feasibility work on the sulfides underneath and so the second thing we did besides kick-starting this development of the heat bleach operation was look review all of the expiration data, I mean Centerra  did a very good job of acquiring all the data, they had two expirations teams working on the project and just half a kilometer away from the ATO project was this Mungu discovery and it’s a high-grade gold and silver discovery.

So we focused a lot more on actually looking at Mungu that’s close by and seeing if there’s any connection to the ATO project and that’s where we think we’ve had I guess an expiration win on that side, is the ATO pipe for Mungu looked to be actually part of the same twenty kilometer mineralized structure. So today, you know we’ve drilled almost twenty thousand meters since taking over the project from Centerra.

Liam Hardy: And that’s twenty thousand meters on the top of what Centerra already had right?

Aneel Waraich: That’s correct. Yeah, so you know close to ninety thousand meters drilled on a project which gives us a much better view and we’ll have an updated resource an initial resource next year on Mungu, which was never even in any other feasibility work or even in a resource and so that’s some significant value add, I guess since we took over the project.

Liam Hardy: I think that’s a pretty good at a review of the company there Aneel, you’ve taken over from Centerra based on their strong results at the project, you’ve come across a new deposit through extensive drilling in the region, in Mungu and now you’re in the process of building, you know producing mine, what might be really interesting to our listeners is if we talk about Mongolia, it’s way up in North Asia. Supposedly, the most remote place on the planet, some regions of the Gobi, what’s it like to operate as a mining company?

Aneel Waraich: I guess for north American investors, I mean from where we are, I mean our ATO project is in the eastern most province of Mongolia in Dornod Province, it’s off the main highway, in terms of weather, I think it’s similar to Edmonton in comparison, very cold in the winter but you still get summer-like conditions in the summer and you can actually work all year round and actually run a heap leach operation all year round as there have been two other heap leach operations in Mongolia.

In terms of Mongolia as a country, it’s a population of three and a half million people, very large landmass and majority about half the country lives in Ulaanbaatar and the rest of them are spread out across the country and so it’s a relatively under explored, what we think is the last frontier market, it’s the size of Ecuador and Peru put together, there’s large copper porphyry targets in deposits as a world class as we know from Oyu Tolgoi and with that usually comes large gold epithermal deposits and that’s where Steppe gold is focusing on: Building a mid-tier precious metals producer, solely focused on Mongolia.

Liam Hardy: And this is a politically stable region?

Aneel Waraich: Yeah. Mongolia is a country, it’s a democratic country, I think it’s still relatively new, and was a Russian satellite country up to the early 90s. So it’s still relatively new democracy and so I think they’re still you know learning but the government that’s in power today and as well as the president, as a businessman, they are pro mining, they are pro foreign investment and they’ve really focused on that messaging for the last couple years by coming to PDAC for the last two years, sending the same message that we are open for business and we are going to show you, how you can build and have the government support in country and Steppe gold is kind of the poster child for that, we are the next company to be producing and where the only ones building a mine at the moment. So I think we are the kind of that poster child in the spotlight to show how the governor supportive and how easy you can do business there.

Liam Hardy: Yeah. It’s brilliant to have a government that’s supportive, especially when they’re coming to PDAC and helping you put that message out there. Mongolia is still incredibly sparsely populated there, I mean do you find getting around, access to resources there, water, power, etc. Do you find that to be a problem at all?

Aneel Waraich: Not at all. So water, Centerra drilled a few Boreholes on our property, so we actually have no issues on water, we’re twenty kilometers away from the grid. So our stage two, when we do build a CIL plant, we will look at different ways for power, different opportunities, whether it’s a mix of grid, maybe some renewable energy sources or potentially even a small coal plant that the Chinese do that a lot and they build these little smaller plants and there’s lots of coal.

So I don’t think we’ve seen any issues there in terms of the infrastructure, I mean we’re right off a main road, if you see the pictures, you can see, you know we’re building a mine with no issues at the moment and I think we can get to our phase two CIL plant without any issues either but there is obviously more work to be done on that side.

Liam Hardy: Sounds like a great place to build a mine Aneel. So how have you performed in the last twelve months and maybe looking forward to the next twelve months, how do you hope to perform financially for your shareholders?

Aneel Waraich: Sure. So we actually listed at two dollars at the end of May, it was a two dollars’ unit offering. So, didn’t come with a unit, a warrant exercisable at 2.34, our stock has dropped unfortunately, since the listing for… to be honest a variety of reasons, I don’t think much has to do fundamentally with the company because we are fully funded into production. So nothing has changed, if you look at the amount of work that we’ve done and completed since the IPO in just six months, you know drilling eleven thousand meters or so and had some very good hits on those, not just the first time we found visible gold in the property but there’s some larger intercepts that show that the size and the grade is there on a much bigger project and of course, we’re building a mine and what we think is going to come in at or under budget.

So financial side, the company is well-funded into first cash on the stock price, I think that’s just the circumstances of the market at the moment unfortunately, for variety reasons, people sell to move on to other shorter speculative deals and some funds have had some liquidation issues and small caps are the first guys that get hit unfortunately.

Liam Hardy: The trend seems to be quite common across the mid-tier companies or companies moving into production, if you look at Hummingbird Resources on the AIM and Anaconda on the TSX up in Newfoundland, they’re struggling to hold their share price, do you think this is a long-term problem or do you think there’ll be a recovery?

Aneel Waraich: I don’t think it’s a long-term trend, I think when investors start looking at gold again and this is where, you know I think the audience hasn’t been there, people have been looking at cannabis and crypto and other industries and sectors and I think as gold, which I think will start to shine soon, you didn’t get the generalist investors back in the game and I think that’s we’re getting at the next leg up, guys like us will just continue to grind it out and execute and create value for shareholders and eventually, it’s going to reflect in the share price and luckily, we’re not at the mercy of the markets to go raise and do a diluted financing.

Liam Hardy: And where is your main shareholder base, is it mostly in North America or you… but more international, you mentioned you’re coming to Europe next week and I’ll see you based in North Asia. So where is your main shareholder base?

Aneel Waraich: Sure. We have a decent mix of shareholders from around the world, you know I think currently between ten and fifteen percent are held in Australians hands, so we have you know Matt Wood is in Australian, he’s had success in the past with ASX listed companies, including in Mongolia. So he was a founder of who knew coal, which was a twenty million dollar IPO on the ASX in 2010 and it was in 2011, he sold that for half a billion cash and put two mines into early stage production in Mongolia and so he’s had some wins there obviously, so there’s a following there in Australia,

About twenty to twenty-five percent of our investors are from Asia, so Hong Kong our lead investor in very large supporters. Lim Advisers, they were the cornerstone investor in the IPO, I think post IPO, they even bought an additional million a half or so shares on the market. So they were obviously a new supporter out of Asia.

Out of North America, we raised with Triple Flag and Elliot Asset Management, you know that’s another large shareholder, it’s probably about ten to fifteen percent.

So there’s actually a good mix around the world and then out of Europe in Zurich, we have the Groupon Azeri invest, who are very good supporters of ours, them and their investors or co-investors are probably close to ten percent of the company as well. So we’re really kind of diversified in terms of capital.

Liam Hardy: So a high percentage of institutional investment at the moment?

Aneel Waraich: Yes. Like I said, I think the retail, I mean now’s a really good time for retail investors to get in, one is they’re getting in the cheaper than some very smart long-term money that came in at… well I guess double to where we are today in our long term. So there’s an opportunity and probably won’t be for long to accumulate shares of these very cheap pricing, while we continue to execute ahead of a lot more milestones and catalysts and just the next couple months alone going right into Q1, but yes, is nice to have the institutional support and now I think it’s a good time to focus on the retail side and there will be some investors will take some profits from the other sectors and probably look at where the good stories are, the guys who are funded and are executing and doing what they say and I think that’s what we’re doing.

Liam Hardy:  And you’re out and about bringing that message to retail investors at some fairly large conferences, where’s the best place for anybody who’s not going to be at those conferences to find out more about the company?

Aneel Waraich:     Absolutely. So our website is I think that’s the best place, Haywood has recently initiated a research as well and I think they’ll probably one or two more analyst covering the stock in the next three to six months and of course were obviously building our awareness through obviously speaking to people like yourself and making the rounds at these retail and institutional conferences.

Liam Hardy:  There’s certainly a lot of those coming up, it’s a pretty hectic autumn.

Aneel Waraich:     Absolutely

Liam Hardy:  So good luck on your travels Aneel. I hope you have a really good time in Europe and thank you very much for taking the time speak to us today.

Aneel Waraich:     Excellent. Well, thank you very much Liam.

Liam Hardy:  So thank you everybody for joining us today for the mining IR podcast with Aneel Waraich from Steppe gold, you may or may not know we’re on the road right now. This podcast was actually recorded from the back end of a conference in London, we’re going to be at Edel metal in Munich, starting tomorrow, which looks like a really good schedule followed by Mining Investment London, 121 London and then mines and money as well.

So we’re going to be in the UK, if you’d like to chat with us, we will be there, say hello, you can join us next week to hear from Dave Patterson from British Columbia based crowdfunding company vested, who recently had success listing KAL minerals to the CSE. So we look forward to hearing how they intend to change the way we invest in the future.

Thank you very much for stopping by, I’ve been Liam Hardy for mining IR and I hope we speak again.

Cheers. hosts a variety of articles from a range of sources, our content, while interesting, should not be considered as formal financial advice. Always seek professional guidance and consult a range of sources before investing.

Posted in Podcast Tagged with: , , ,

Leave a Reply

Your email address will not be published. Required fields are marked *