Steppe Gold has signed a turnkey engineering, procurement and construction (EPC) contract with Hexagon Build Engineering for the second-phase expansion of the ATO Gold Mine in Mongolia.

The contract awarded to Hexagon, a construction group with operations in Mongolia and internationally, is valued at around $148.4m.

The contract amount is fully funded by a project finance package made available to Steppe Gold and its affiliates by TDB Capital, its affiliates, and the Trade and Development Bank of Mongolia.

The ATO Phase 2 expansion financing package, totalling $150m, is set to fund the expansion project.

An initial agreement for a secured loan of $50m with the Trade and Development Bank of Mongolia has been signed, and the company has begun drawing funds.

These funds will primarily be used to order equipment and long-form items necessary for the expansion.

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The company noted that construction efforts are already in progress, with the crushing circuit nearing completion at 90%.

The first concentrate production and sales from phase two are expected to commence in early 2026.

This expansion is expected to create approximately 300 new jobs during both the construction and operational phases, contributing to local employment opportunities.

Additionally, the Government of Mongolia has expressed full support for the project.

Steppe Gold chairman and CEO Bataa Tumur-Ochir said: “With our landmark financing package secured and drawdowns now commenced, we are very excited to announce the signing of the EPC contract for the design and construction of our ATO Phase 2 Expansion.

“We are fully aligned with our partners at the TDB Group and we are very excited to partner with Hexagon, a leading Mongolian construction group. This allows us to continue work under way at the ATO site and accelerate plans for a busy construction year in 2024.”