Life of Mine
The Altan Tsagaan Ovoo (ATO) gold and silver project is an operational open-pit mine located in the province of Dornod, Mongolia. It is owned by Steppe Gold, a precious metals exploration company.
The project is being developed in a phased manner, with the first phase having achieved commercial production in April 2020. The second phase involves the development of the ATO and Mungu deposits.
Phase one operations involve open-pit mining and heap leach operation to produce gold dore bars up to 2023 while phase two will start production of lead, zinc, and pyrite concentrates in the fourth quarter (Q4) of 2023 and continue until the second quarter (Q2) of 2034.
A feasibility study was completed in October 2021 for phase two of mining and extension of the life of the producing oxide phase by two years. The feasibility study indicated a life of mine (LOM) of 10.5 years for phase two.
Altan Tsagaan Ovoo gold and silver project location and geology
The ATO property is located within the Tsagaan Ovoo soum territory in Dornod, Eastern Mongolia. It lies approximately 660km east of the capital city of Ulaanbaatar and 38km west of Tsagaan Ovoo soum. The project is situated in the mining licence MV-017111, which covers an area of 5,492.63ha.
The property lies within the Mongol-Okhotsk tectonic collage of the Devonian to Late Jurassic age. The tectonic collage is emplaced along the North Asian Craton (NAC). The local geology features metamorphosed Devonian age sedimentary rocks overlain by a sequence of Permian era volcanic and sedimentary rocks. The sequence also includes remnant scraps of Jurassic age volcanoclastic units, intruded by Jurassic plutons.
Mineral reserves of the ATO and Mungu deposits
The proven and probable mineral reserves at the ATO and Mungu deposits were estimated at 26.4 million tonnes (Mt) grading 1.14g/t gold, 11.18g/t silver, 0.46% lead and 0.78% zinc, as of June 2021.
Mining at ATO gold and silver project
The ATO mine is operated as a conventional open-pit mine with drilling, blasting, and truck and shovel operations. The mining fleet includes rigid body mining trucks, hydraulic excavators, and wheel loaders.
The project has two mining areas, namely the ATO and Mungu deposits. The Mungu pit will be explored and mined under phase two. Open at depth, the pit can be mined economically using open-pit methods only for a small portion. The feasibility study suggests the implementation of underground operations to extract ore from the remaining areas of the Mungu pit, upon exhausting the open-pit reserves. The underground potential of the pit needs to be proved through further studies, though.
Processing in phase one of the ATO mine
The ATO processing facility in phase one has a capacity of leaching 1.2 million tonnes per annum (Mtpa) of oxide ore at an average grade of 1.13g/t gold at a recovery rate of 70% and an average grade of 9.25g/t silver at 40% recovery.
The run-of-mine (ROM) ore undergoes three-stage crushing in a primary jaw crusher, secondary cone crusher, and an optional tertiary cone crusher operating in a closed circuit with a final product screen.
The crushed ore is transferred to the heap leach facility to produce a pregnant leach solution (PLS), which is introduced into the carbon adsorption circuit. The loaded carbon from the adsorption circuit is acid washed to remove calcium, sodium salts, magnesium, silica, and fine iron particles. A modified ZADRA elution process is used to remove the adsorbed gold from the loaded carbon.
The pregnant solution flows through one of two electrowinning cells with gold-plated knitted-mesh steel wool cathodes. The loaded cathodes are power washed to remove the gold bearing, which is filtered to eliminate excess moisture and retorted to remove any mercury. Fluxes are introduced and mixed with the retort residue at this stage. The residue is then smelted in an induction furnace to produce gold dore.
Phase two processing details
Phase two is intended to increase gold production while also producing saleable zinc, lead and pyrite concentrates.
A crushing circuit with a capacity of 2.2Mtpa will be installed. The ROM ore will undergo three-stage crushing to reduce the material from an F100 of 800mm to a P80 of 10mm.
The grinding circuit will include a primary ball mill arranged in a closed circuit with a classification screen in the first stage. The second stage of the grinding circuit will include a secondary ball mill in a closed circuit with hydrocyclones.
The flotation process will involve separate circuits for lead, zinc and pyrite concentrates. The concentrate products from each of the circuits will undergo compressed air filtration to produce a dewatered dry filter cake, which will be stockpiled.
The ATO gold and silver property can be accessed from Ulaanbaatar by highway to Choibalsan, the capital of the Dornod Province, and then by an improved unpaved road to Tsagaan Ovoo soum.
A mining camp at the project site can accommodate 300 personnel.
The 2.4MW power supply required for the phase one mining and processing operations is supplied using CAT 3512B diesel power generators having a maximum power generation capacity of 3.6MW. A hybrid solution diesel-renewable power plant is also proposed to be constructed.
Financing for ATO mine
Steppe Gold secured a loan worth $59.7m through the Gold-2 National Program of the Government of Mongolia in November 2021. The loan was facilitated through the Central Bank of Mongolia.
An agreement was also made for a $5m working capital loan from the Trade and Development Bank of Mongolia (TDBM).
Both the loans will be used to accelerate the phase two construction works.
The October 2021 feasibility study was led by DRA Global (DRA), an engineering, project delivery, and operations management group headquartered in Australia. DRA was responsible for the studies related to mine planning, mineral reserve estimate, metallurgy, as well as capital and operating cost estimation.
GeoRes was responsible for the mineral resource estimation while global consulting firm Knight Piésold provided the design of tailings facilities. The hydrogeology, water quality, and environmental resource management studies were performed by Ulzii Environmental (Mongolia).
Steppe Gold engaged Mongolian professional services and equipment supplier Euro Khan to conduct a technical study for the potential development of a hybrid renewable energy system (RES) for the mine. Barloworld Mongolia is the supplier of heavy equipment (CAT) parts and power systems.
Chinese chemical company Hebei Chengxin provides cyanide for the project while Dow Chemical Mongolia supplies other reagents.