Mr. Bataa Tumur-Ochir reports

STEPPE GOLD ENTERS INTO SHARE EXCHANGE AGREEMENT TO ACQUIRE BOROO GOLD AND AGREES TO SELL THE TRES CRUCES OXIDE PROJECT

Further to the press releases dated Jan. 22, 2024, and March 19, 2024, Steppe Gold Ltd. has entered into a share exchange agreement, pursuant to which Steppe Gold will acquire all of the issued and outstanding common shares of Boroo Gold LLC from an indirect, wholly owned subsidiary of Boroo Pte. Ltd. (Boroo Singapore) in an all-share transaction.

Additionally, pursuant to separate definitive share purchase agreements, each between one of Steppe Gold's wholly owned subsidiaries, on the one hand, and Boroo Singapore or one of its affiliates, on the other hand, each dated April 11, 2024, Steppe Gold will sell the Tres Cruces oxide project to Boroo Singapore for approximately $12-million in cash payable over the next 18 months beginning as of the closing date (as defined in the share purchase agreements).

Highlights:

• The Boroo Gold transaction will create Mongolia's leading gold producer:
  • Acquisition of a leading gold producer, Boroo Gold, will create Mongolia's leading gold producer.
  • Boroo Singapore will hold approximately 55.9 per cent of the issued and outstanding common shares of Steppe Gold on a fully diluted basis, immediately following the completion of the Boroo Gold transaction.
• Immediate and strong cash flows to Steppe Gold:
  • Boroo Gold estimates over 400,000 ounces of gold production from 2024 to 2031, with projected average annual production of approximately 60,000 oz in 2024, 2025 and 2026.
  • In 2023, Boroo Gold had revenue of $132-million (U.S.) on production of 67,315 oz of gold, with an all-in sustaining cost of $847 per oz, at an average achieved gold price of $1,957 per oz.
  • Boroo Gold is forecasting similar production levels in 2024, albeit with higher sustaining costs.
• Long-standing and strong social licence:
  • The Boroo gold mine comes with a long and proud history of positive impact in Mongolia:
    • Over $1.02-billion (U.S.) in benefits to Mongolia since 2003 (taxes and fees, capital expenditures, donations, payments to local companies for goods and services, and salaries to national employees);
    • Over $17.5-million (U.S.) in donations and investments in local soums between 2007 and 2023 under its framework of social responsibility.
• Steppe Gold combined gold production in 2024 is projected to be 90,000 oz, rising to an estimated annualized 150,000 oz in 2026 as the ATO gold mine phase 2 expansion is planned to come on stream in mid-2026.
• Significant value upside from:
  • Potential cost synergies from combined purchasing power and lower relative administration costs;
  • Increasing reserves and resources near the existing mines.
• Divestment of the Tres Cruces project to the likeliest highest-value buyer will return Steppe Gold's singular focus to Mongolia.

Bataa Tumur-Ochir, chairman and chief executive officer of Steppe Gold, commented: "We are very pleased to announce the agreement to acquire Boroo Gold. This transaction accelerates our path to a multiasset Mongolia-focused mining group and, importantly, immediately provides strong cash flow to support our growth plans, further improved with the recent strong gold prices. In connection with the completion of this transaction, we expect to finish 2024 with a run rate of around 90,000 oz in gold production, moving to over 150,000 oz in 2026 on a pro forma basis. We have also decided to divest the Tres Cruces project to further improve our liquidity and sharpen our focus on Mongolia."

Boroo Gold transaction details

Share exchange agreement

Pursuant to the share exchange agreement, Steppe Gold will acquire all of the BG common shares in consideration for the issuance by Steppe Gold of 138.15 million Steppe Gold common shares, or that number of Steppe Gold common shares that results in Boroo Singapore, directly or indirectly, holding 55.9 per cent of the issued and outstanding Steppe Gold common shares (calculated on a fully diluted basis) upon completion of the Boroo Gold transaction. Steppe Gold will seek approval for the issuance of Steppe Gold common shares in connection with the Boroo Gold transaction at Steppe Gold's annual general and special meeting of shareholders, which is expected to be held in June, 2024.

The Boroo Gold transaction is subject to customary closing conditions, including receipt of approval by Steppe Gold's shareholders at the meeting, and certain regulatory approvals, including the approvals of the Toronto Stock Exchange and applicable Mongolian authorities. Additionally, it is a condition to the closing of the Boroo Gold transaction that the Tres Cruces transaction has closed.

All of the directors and executive officers of Steppe Gold have entered into support and voting agreements pursuant to which they have agreed to support the Boroo Gold transaction and to vote in favour of the Boroo Gold transaction, subject to the provisions of such support and voting agreements.

The share exchange agreement includes customary representations, warranties and covenants, including with respect to non-solicitation of alternative transactions, a right to match superior proposals and a fiduciary out in respect of the same. In addition, each of Boroo Singapore and Steppe Gold has agreed to pay a termination fee if the share exchange agreement is terminated upon the occurrence of certain events.

Further details with respect to the Boroo Gold transaction and the Tres Cruces transaction will be included in the information circular to be mailed to Steppe Gold's shareholders in connection with the meeting. Provided all conditions precedent in the share exchange agreement are satisfied or waived in a timely manner (including the closing of the Tres Cruces transaction), it is currently anticipated that the Boroo Gold transaction will close in the third quarter of 2024. A copy of the share exchange agreement, the share purchase agreements and the information circular in respect of the meeting will be filed on Steppe Gold's SEDAR+ profile and will be available for viewing at SEDAR+.

Investor rights agreement

At the closing of the Boroo Gold transaction, Steppe Gold will enter into an investor rights agreement with Boroo Singapore. Pursuant to the investor rights agreement, Boroo Singapore will have the right to nominate up to two directors to the board of directors of Steppe Gold, subject to Boroo Singapore maintaining ownership of at least 10 per cent of the issued and outstanding Steppe Gold common shares, and other terms and conditions as further set forth in the investor rights agreement. In addition, Boroo Singapore will be provided with certain governance rights, so long as it maintains certain Steppe Gold common share ownership thresholds, including pre-emptive rights and customary registration rights. The key executive management team of Steppe Gold will remain in place following closing of the Boroo Gold transaction.

Expected management team on closing:

• Bataa Tumur-Ochir, chairman and chief executive officer;
• Tserenbadam Duger, chief operating officer;
• Jeremy South, senior vice-president and chief financial officer;
• Byambatseren Tsogbadrakh, president and vice-president, finance.

Benefits of the Boroo Gold transaction

The Boroo Gold transaction is expected to provide meaningful benefits to shareholders of Steppe Gold, including:

• Increased gold production to 90,000 oz per annum in 2025 and 150,000 oz per annum by 2026;
• Strong cash flow and increased financial strength to service ATO gold mine phase 2 expansion debt and project financing;
• Financing for exploration programs and further acquisition opportunities in Mongolia;
• Liquidity from the sale of the Tres Cruces project;
• Creation of a multiasset producer with a strong base and focus in Mongolia.

Tres Cruces transaction details

Steppe Gold is also pleased to announce that it has entered into the share purchase agreements, pursuant to which Boroo Singapore will acquire the Tres Cruces project by purchasing all of the issued and outstanding shares of two of Steppe Gold's indirect, wholly owned subsidiaries for aggregate cash consideration of approximately $12-million. The consideration is payable in four instalments over a period of 18 months starting on the closing date (as defined in the share purchase agreements). The Tres Cruces transaction is expected to close in July, 2024, following which the Boroo Gold transaction will close subsequently thereafter.

The Tres Cruces transaction is subject to customary closing conditions and is cross-conditional on the closing of the Boroo Gold transaction.

Recommendation of the Steppe Gold board

Based on an independent verbal fairness opinion provided by Sequeira Partners, in respect of the Boroo Gold transaction, and after consulting with its financial and legal advisers, among other considerations, the Steppe Gold board has unanimously: (i) determined that each of the Boroo Gold transaction and the Tres Cruces transaction is fair to Steppe Gold; (ii) approved each of the Boroo Gold transaction and the Tres Cruces transaction, and the entering into of the share exchange agreement and share purchase agreements, respectively, to be in the best interests of Steppe Gold; and (iii) resolved to recommend that Steppe Gold's shareholders vote in favour of the transaction resolution (as defined in the share exchange agreement).

Advisers

Steppe Gold's legal counsel is Fasken Martineau DuMoulin LLP. Boroo Singapore's Canadian legal counsel is Stikeman Elliott LLP. Payet, Rey, Cauvi, Perez Abogados is Peruvian legal counsel to Steppe Gold and Boroo Singapore. Steppe Gold's financial adviser is Sequeira Partners. Boroo Singapore's financial adviser is Cormark Securities Inc.

Qualified persons

The technical content of this news release regarding Steppe Gold has been reviewed and validated by Enkhtuvshin Khishigsuren, PEng, a qualified person as that term is defined in National Instrument 43-101 (Standards of Disclosure for Mineral Projects).

Technical reports

Additional information with respect to Steppe Gold's Altan Tsagaan Ovoo project, including its gold equivalent resource base, is contained in the technical report of Steppe Gold dated Nov. 6, 2022, and entitled "Altan Tsagaan Ovoo Project (ATO) 2022 Mineral Resources & Reserves Report (NI 43-101)." A copy of said report can be obtained from SEDAR+.

Further information with respect to the Tres Cruces project is contained in the technical report of Steppe Gold, dated Aug. 21, 2023, and entitled "Form 43-101F1 Technical Report Preliminary Economic Assessment." A copy of said report can be obtained from SEDAR+.

About Steppe Gold Ltd.

Steppe Gold is Mongolia's premier precious metal company and 100-per-cent owner of the ATO gold mine and the Uudam Khundii project in Mongolia.

About Boroo Gold LLC

Established in 1997, Boroo Gold is a leading gold producer in Mongolia with an over-50,000-ton-per-day mining fleet, 5,500-ton-per-day mill and carbon-in-leach circuit gold processing plant, three-million-ton-per-year heap leach and carbon-in-column plant, and an approximate work force of over 400 people. Boroo Gold operates the Boroo mine in Selenge province, as well as owning and operating the adjacent Ulaanbulag mine in Mongolia.

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