Several gold mines around the globe have been forced to halt productions or lower their output significantly. In Mongolia, Steppe Gold Limited is preparing to begin producing and processing gold for the foreseeable future.
Steppe Gold Takes the Opposite Approach
Global coronavirus concerns are forcing many gold refineries to lower through bullion output. This will, in turn, create a degree of scarcity that may drive gold prices higher in the process. However, not all processing plants are subject to this reduced production guideline. Some of them are now only now venturing into the world of ore processing.
Steppe Gold Limited is one interesting example in this regard. Its ATO Gold Mine in Mongolia has been given the green light to begin ore processing. With gold ore being stacked and going through the leach pad, the recovery of gold can begin. It is expected that this firm will achieve a recovery rate of roughly 70%.
Initial projections indicate that ATO Gold Mine will recover $38 million in gold in the near future. That is a significant amount, especially for a new venture in Mongolia like this one. All of the production of this mine will aid the company in achieving its goal of 60,000 ounces in 2020. Currently, it costs the company roughly $500 per ounce to recover gold from the ore.
Coronavirus Creates a Crisis for Others
This news coming out of Mongolia is rather surprising. Unlike other countries, it would appear that this region is still providing ample access to gold deposits. That is good news for Mongolia, especially now that other regions are forcing mines to shut down production or decrease it significantly.
In Switzerland, several mines have been asked to reduce output due to the coronavirus crisis. That move will undoubtedly lead to more scarcity of this precious metal. However, now that Steppe Gold Limited is stepping up its commercial mining, the scarcity factor may not necessarily come into play right away.
In South Africa, there are concerns over the gold mining production as well. Domestic mining companies expect to be shut down due to the coronavirus crisis. This will not only affect the production of gold, but also coal, iron, platinum, and palladium.
It is expected that furnaces and underground mines may be put on “maintenance” mode. That will allow companies to resume operations in the future, but for now, everything will have to be halted. Preventing permanent damage to this sector is the main order of business. The South African Minerals Council will explore possible options in this regard.