Steppe Gold Provides Q4 Production Update Change of Auditor

The most recent news, released on December 9, 2025, provides a Q4 2025 production update and announces a change of auditor. - Upgraded Guidance: The company has increased its Q4 2025 gold production guidance to 23,000 ounces, a significant increase from the 15,000 ounces previously guided in the Q3 results. - Sales Forecast: Gold sales for Q4 2025 are forecast to be 30,000 ounces. - Full Year Guidance: This update brings the full-year 2025 gold production forecast to 70,000 ounces, meeting the initial guidance provided earlier in the year. The company attributes the increase to fleet upgrades, completion of maintenance, and processing of higher-grade ore. - Auditor Change: Steppe Gold has changed its auditor from Kingston Ross Pasnak LLP to a member firm of KPMG International, effective December 8, 2025. The stated reason is to align with the audit relationship of the broader group for consistency and transparency.

This news is materially positive. The market had reason to be concerned following the Q3 2025 financial results (released November 14, 2025), which showed extremely high All-In Sustaining Costs (AISC) of $2,780/oz, low quarterly sales of ~8,000 oz, and a dangerously low cash balance of $5.6 million. This combination pointed towards a significant production miss for 2025 and a potential liquidity crisis.

The December 9th update completely reverses this short-term negative outlook: - Meeting Guidance: By guiding to 70,000 oz for the full year, the company is now set to meet its original target, which seemed out of reach after Q3. This demonstrates a significant operational turnaround in the final quarter. - Resolving Cash Crunch: The forecast to sell 30,000 ounces in Q4 (at current gold prices, this would generate over US$60 million in revenue) will provide a massive and critically needed cash infusion. This directly addresses the liquidity concerns raised by the Q3 report. - Explaining High Q3 Costs: The large discrepancy between Q3 sales (~8k oz) and implied Q3 production (~14k oz) suggests a significant inventory build-up. This build-up would have incurred costs without corresponding revenue, explaining the anomalously high AISC in Q3. Selling this inventory in Q4 should lead to a much stronger financial performance and a return to more normalized costs.

The change to a KPMG-affiliated auditor is a secondary, minor positive, suggesting a move towards enhanced governance appropriate for a larger, multi-asset producer.

While this news is a significant operational positive, it does not resolve the company's longer-term structural risks, including its high debt load, the need for Phase 2 expansion financing, and the questionable nature of a large related-party bond on its balance sheet. However, by averting a near-term crisis, it provides the company with the breathing room needed to address these larger issues. The stock sold off heavily after the Q3 report, and this news should trigger a significant relief rally.

Steppe Gold is a precious metals producer with operations in Mongolia. Following its acquisition of Boroo Gold LLC in 2024, the company operates two producing gold mines: the Altan Tsagaan Ovoo (ATO) mine and the Boroo Gold Mine. - Flagship Project: The primary focus for growth is the ATO Phase 2 Expansion. This project aims to significantly increase annual production to over 100,000 gold equivalent ounces and extend the mine life. The company is currently working on an updated feasibility study and seeking project financing for the expansion, which has a stated capex of ~$128 million from an older presentation.