Allied Gold Secures $500M Through UAE Partnership to Advance Mining Operations

Allied Gold has entered a partnership with UAE-based Ambrosia Investment Holding, securing a total of $500 million to enhance its African mining operations. Ambrosia will acquire half of Allied’s Sadiola mine assets and a 12% equity interest in the company. The partnership aims to facilitate growth and expansion projects in Mali and Ethiopia, while Allied also plans to pursue a New York Stock Exchange listing.

Allied Gold (TSX: AAUC) has announced a strategic partnership with an investment group from the United Arab Emirates (UAE), Ambrosia Investment Holding, aimed at enhancing its mining operations in Africa. This alliance is anticipated to deliver critical regional insight and broaden market support, as the UAE has become a significant investor in African ventures, having committed over $110 billion from 2019 to 2023.

As part of the collaboration, Ambrosia will acquire half of Allied’s gold mining assets in Mali, specifically an 80% stake in the Sadiola mine, for a total of $375 million in cash. The deal stipulates an initial payment of $145 million upon closure, followed by the remaining $230 million at a later date. Subsequently, the two parties will establish a 50/50 joint venture for the Malian assets.

Additionally, Ambrosia will obtain a 12% equity stake in Allied Gold at approximately C$156.6 million, which is designated to support the expansion of Sadiola. This equity purchase involves roughly 46 million shares at C$3.40 each, which is lower than the C$4.70 market price at the time of the announcement. As of 11:10 a.m. in Toronto, Allied Gold shares were trading at C$4.41, resulting in a market capitalization of C$1.45 billion.

Peter Marrone, Chairman and CEO of Allied Gold, hailed the transaction as notably unique for bringing together a Canadian company with extensive local experience and Emirati investors venturing into Mali. He expressed optimism that this partnership represents a groundbreaking move in international mining ventures.

Allied Gold asserts that the $500 million total deal value will enhance the company’s financial flexibility, enabling it to pursue expansion strategies, including plans for Sadiola and the Kurmuk project in Ethiopia. The phased expansion at Sadiola aims to boost production from approximately 170,000 ounces in 2023 to 200,000-230,000 ounces yearly, utilizing oxide ore feed and preceding expansions. The first phase will incur $65 million in costs, while the second phase will require $400 million, targeting production of 400,000 ounces per annum over four years.

Furthermore, the partnership entails the installation of a photovoltaic power system at Sadiola as part of a twelve-year agreement with ATGC, a UAE-based power company, aimed at increasing operational efficiency and reducing environmental impact. The Kurmuk project in Ethiopia is on track to commence production by mid-2026, with initial targets set at approximately 290,000 ounces per annum, and a long-term goal of maintaining a production level of 240,000 ounces across 15 years.

Allied Gold is also in the process of applying for a listing on the New York Stock Exchange, complementing its current operations in Canada. CEO Marrone stated that the company is confident it fulfills the NYSE’s listing criteria and anticipates a decision during the initial half of the following year, expressing the significance of NYSE presence in enhancing visibility for the company.

The partnership between Allied Gold and Ambrosia Investment Holding signifies a strategic move to bolster mining operations in Africa, particularly in Mali. With a significant financial investment and plans for production expansion, Allied Gold is positioned for future growth. Furthermore, pursuing a dual listing on the NYSE reflects the company’s ambition and commitment to leveraging international capital markets for its expansion endeavors.

Original Source: www.mining.com