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Gold/Mining/Energy : Steppe Gold (SPE:V) -- Ignore unavailable to you. Want to Upgrade?

To: Steve Johnston who wrote (1052)	8/25/1998 7:21:00 PM
From: Robert Dydo	Read Replies (1) \| Respond to of 1248

Annual and six month results; property review Steppe Gold Resources Ltd SPE Shares issued 27,967,926 Jul 3 close $0.24 Tue 25 Aug 98 News Release Mr. John Menzies reports The company had a loss of $1,946,563 for the year ended Dec. 31, 1997, a loss of $187,613 for the quarter ended March 31, 1998, and a loss of $545,410 for the quarter ended June 30, 1998 (eight cents, one cent and two cents per share respectively for each of the periods). As of June 30, 1998, the company had cash and cash equivalents of $1.75-million following the successful $2.0-million financing with Antares. Over the past 18 months the company has focused on advancing the development of the Mizek heap leach gold project, acquiring high quality copper/gold development projects and rationalizing its holdings in precious and base metal exploration properties, all within Kazakhstan. In July 1997, the company completed a definitive feasibility study on the Mizek heap leach gold project in northeast Kazakhstan. Mineable reserves, categorized as proven and probable, are reported to be 5.47 million tonnes at 2.14 g/t Au at a 0.80 g/t cutoff, and a stripping ratio of 0.4:1.0. These reserves were calculated at a gold price of $350 (U.S.) per ounce. The reserves are shown to be relatively insensitive to gold price with a decrease in reserves of only 1.4 per cent using a gold price of $325 (U.S.) per ounce. The project capital cost was estimated to be $23.8-million (U.S.) including working capital and contingencies, but excluding financing and other soft costs. Direct mine cash operating costs are estimated at $8.72 (U.S.) per tonne of ore processed and $158.05 (U.S.) per ounce of gold produced over the five year projected mine life. During the first 12 months of production at full capacity, the mine is estimated to produce 80,000 ounces of gold at a cash cost of $120 (U.S.) per ounce. The company commenced construction at Mizek in August 1997 and has completed 85 per cent of the earthworks for the solution ponds and general site preparation as well as for the phase I leach pads. Construction of a 100 man camp for the mine workforce is 60 per cent complete. Mizek construction activities have been put on hold awaiting completion of additional equity financing. Insufficient working capital was also the reason for the delay in completion of the 1997 audit. In September 1997, the company signed an option agreement to acquire 100 per cent of the Kosmurun & Akbastau (K&A) copper-gold-zinc projects, approximately 40km southeast of Mizek. The K&A projects are advanced stage exploration projects having had a total of 88,000m of diamond drilling and 2.4km of underground development completed during the 1970s by agencies of the former Soviet Union. The company has completed confirmatory drilling of 23 reverse circulation holes and one core hole which confirmed the results recorded by the Soviets. The identified resources for each deposit were estimated by the Soviets as follows: PROPERTY KILO CU ZN AU AG TONNES % % G/T G/T Kosmurun Upper zone - open pit 3,407 4.28 2.06 2.39 33.17 Main zone - U/G 18,755 3.02 0.72 0.84 17.03 ----------------------------------------- Total 22,162 3.21 0.93 1.08 19.51 Akbastau Open Pit Enriched zone 5,184 1.78 1.44 0.70 26.50 Primary zone 7,292 1.75 0.66 0.46 6.47 Sub-total 12,476 1.76 1.05 0.56 14.80 Underground 19,435 1.73 0.77 0.60 18.38 ----------------------------------------- TOTAL K & A 41,497 2.52 0.86 0.86 18.98 In March 1998, the company entered into an agreement to purchase Goldbelt International LLC from Goldbelt Resources in exchange for a $1-million (U.S.) non-interest bearing convertible note, subject to certain conditions. The closing date is Aug. 31, 1998. Goldbelt LLC has a 50 per cent interest in the Leningorsk gold tailings project and a 60 per cent interest in the Abyz gold-base metal deposit. The Leninorgorsk gold tailings project is an advanced acquisition with 2.4 million ounces in previously reported reserves and resources and has been the subject of extensive studies by recognized North American consulting and engineering firms. Abyz, approximately 80km northwest of Mizek, is a high grade copper-gold-zinc deposit similar to Kosmurun and Akbastau. A pre-feasibility study reported diluted mineable (proven and probable) reserves as follows: CATEGORY KILO CU ZN AU AG TONNES % % G/T G/T Open pit 1,400 3.0 7.3 9.8 86.2 Underground 2,000 2.3 5.7 6.2 64.0 ----------------------------------------- Total 3,400 2.6 6.4 7.7 73.1 The company also holds controlling interests and is the operator of the Selety (25,000 square kilometres) and the Southern Urals (8,000 square kilometres) joint venture exploration properties which it believes offers promise for the discovery of precious and base metal deposits. The company's development plan is for the sequential development of the Mizek heap leach gold project followed by the Kosmurun and Akbastau projects. Startup of Mizek is scheduled for the third quarter of 1999. Mizek will generate the cash flow for growth and will be the first greenfield mining project to commence production since Kazakhstan's independence in December 1991. The company plans to focus on completion of equity and debt financing required to progress the Mizek project. It is anticipated that this will be in place in time to enable purchasing activities to commence during the winter months, thus allowing site construction to recommence in the spring of 1999.