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Matthew Wood
On this summer day too, a cold wind blows over the vast cloud-covered steppe in the easternmost part of Mongolia . Here, eight hours drive from the capital, Ulaanbaatar, three geologists brought by plane on behalf of Canadian institutional investors descend on drill cores. Chaining the few thousand samples taken from the surrounding hills, they spread out over a distance of 70 km The nuclei originate from dormant geysers from the Earth's mantle over a hundred million years ago. years () Gold 1244.56 0.19% ) Near the surface of the earth. Steppe Gold, listed on the Toronto Stock Exchange in May, plans to raise gold before the end of the year and in large numbers, as stated by Matthew Wood , President and CEO of Steppe Gold. Based on a thorough analysis, the Australian believes that the Altan Tsagaan Ovoo Project (ATO) will support 10 million ounces of precious metals in the coming years. Pierre Vaillancourt, a mining analyst with Canadian asset manager Haywood Securities, believes this conclusion is realistic. According to a report by Vaillancourt, "Gold Steppe has a good chance of becoming Mongolia's first precious metals company." Mongolia, heavily dependent on the mining sector, faces economic difficulties following the collapse of prices raw materials and domestic turbulence behind him. Meanwhile, many foreign investors have turned their backs on the country. This raises the question of whether Steppe Gold has put this frontier market too early. Wood rejects him. He justifies the decision in addition to what he believes to be the high price of gold in the long run, especially with the domestic political situation that has become more stable. "The government elected in 2016 has a clear majority in parliament and, like the president, is the guarantor of political stability, which allows us to plan security," says the qualified geologist. As a Canadian company, Steppe Gold can count on an investment protection agreement between Ulaanbaatar and Ottawa and Gold Steppe is already the third company it founded there. "My previous Mongolian companies have been a success for me as well as for the shareholders. "As evidence, he lists Hunnu Coal.The initial public offering in Australia dumped $ 10 million into coal mines eight years ago. was sold to the Thai energy company Banpu for only $ 18.5 million just eighteen months later. Wood acknowledges that the success of Steppe Gold will depend primarily on the development of the prices of the company. 39 gold and production costs, he is convinced that this equation works. "In terms of profitability, the ATO project has significant room for maneuver at a current price of over $ 1,200 an ounce, our production costs being the lowest in the world at $ 350 an ounce." Wood is convinced that the long-term gold demand will be important and that the price will remain high. So he points to his beginnings as a geologist. "At the time, I thought that the price of gold would never exceed $ 500. Those who said the opposite at the time were declared crazy.In the following years, the precious metal has temporarily risen to more than $ 1,800.) A price of $ 2,000 seems quite realistic from this point of view, "says Wood .It also states that Steppe Gold is relying on the expansion. , investors should give up dividends in a first phase. "We plan to invest current income in future growth. Dividends can only be considered in three or four years. The company achieves a market capitalization of 56 million kan. $, C is therefore a microcap with corresponding risk. There is currently no income, net debt exceeds equity by a factor of 4. For an investment to be profitable, Wood's production plans must be absorbed. Otherwise bankruptcy threatens instead of the miracle of the desired price Dependence on raw materials and weak structures make the country the toy of global cycles. This should change. Back to the main article here. 
photo: ZVG
Mongolia must diversify
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