News Summary
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.
Material Impact
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.
Catalysts
– Q4 2025 Financial Results: Confirmation that the company achieved the 23,000 oz production and 30,000 oz sales figures. The key metrics will be the reported AISC and the year-end cash balance. A significant reduction in AISC from Q3 levels is essential to restore confidence.
– Debt Restructuring Update: The company has been working to restructure its debt with the Trade and Development Bank of Mongolia. Progress on repaying higher-cost loans and aligning debt facilities with cash flow is a key catalyst.
– ATO Phase 2 Expansion Financing: This is the most significant long-term value driver. Any concrete news on securing the financing package will be a major event. The company noted in Q2 that negotiations were taking “longer than expected.”
– Status of the Boroo Singapore Bond: The $102 million bond investment from its parent company matures on December 31, 2025. News on its repayment and the use of proceeds will be critical for the company’s balance sheet health and credibility. Any impairment would be materially negative.
Materiality Conclusion
The news is rated Material – Positive. It addresses and reverses the primary operational and financial concerns that arose from the Q3 2025 results. By confirming the company will meet its annual production guidance and will generate substantial cash flow in Q4, it alleviates immediate fears of a guidance miss and a liquidity crisis, thereby materially improving the short-term investment thesis.
