Allied Gold (TSX: AAUC) announced on Tuesday a strategic partnership with Ambrosia Investment Holding, a UAE-based investment group, aimed at advancing its mining operations in Africa. The partnership is expected to provide crucial regional expertise and broader market support, particularly in the growing African market where the UAE has become a prominent investor, surpassing China in backing new business initiatives. Between 2019 and 2023, UAE companies committed over $110 billion to African projects.
Under the terms of the agreement, Ambrosia will acquire a 50% stake in Allied’s gold mining assets in Mali, including an 80% interest in the Sadiola mine, for a total of $375 million. Of this amount, $145 million will be paid upon closing, with the remaining $230 million due at a later date. The deal will result in the formation of a 50/50 joint venture between the two entities on the Malian assets. Additionally, Ambrosia will purchase a 12% equity interest in Allied Gold for approximately C$156.6 million, which will be used to fund the phased expansion of Sadiola. The purchase involves the acquisition of around 46 million shares at C$3.40 per share, reflecting a discount to the stock’s opening price of C$4.70 on Tuesday.
At 11:10 a.m. in Toronto, Allied’s shares were trading at C$4.41, giving the company a market capitalization of C$1.45 billion.
Peter Marrone, Allied’s chairman and CEO, praised the transaction, calling it a “unique” collaboration between a Canadian company and Emirati entrepreneurs. “This is the first of its kind—Canadian management expertise combined with Emirati investment in Mali,” he said.
Strategic Growth and Expansion Plans
The partnership is valued at $500 million and will significantly enhance Allied’s financial flexibility as the company pursues its growth initiatives. Allied is focused on expanding the Sadiola mine and advancing its Kurmuk project in Ethiopia. The phased expansion of Sadiola is expected to increase production from approximately 170,000 ounces in 2023 to between 200,000 and 230,000 ounces per year in the mid-term, driven by the introduction of oxide ore feed and the first expansion phase later this year.
A second phase expansion, projected for completion by late 2028, will target annual production of 400,000 ounces over the first four years and 300,000 ounces per year for the remaining 19-year mine life. The estimated costs for the two expansion phases are $65 million and $400 million, respectively.
Additionally, the partnership will include the installation of a photovoltaic power generation system at Sadiola, as part of a 12-year supply agreement with UAE-based power solutions company ATGC. This initiative is expected to improve both the asset’s operational costs and its environmental footprint.
Ethiopia’s Kurmuk Project and Future Developments
In Ethiopia, the Kurmuk project is on track to begin production in mid-2026, with initial output expected to be around 290,000 ounces per year over the first four years, tapering to 240,000 ounces per year over the life of the mine. The project, with mineral reserves of 2.7 million ounces, offers significant upside potential through further exploration. Allied is targeting a mine life exceeding 15 years for Kurmuk.
To help fund Kurmuk’s development, Allied signed a C$175 million gold streaming deal with Wheaton Precious Metals in late 2024.
US Listing in the Works
Allied Gold is also taking steps toward listing on the New York Stock Exchange (NYSE), joining the ranks of major gold miners that trade both in the US and Canada. CEO Peter Marrone confirmed that the company is in the process of applying for an NYSE listing and expects to receive a decision on its application in the first half of the year. “Canada is a great place to be a mining company, but New York is the king of the mountain in terms of listing seniority,” Marrone said in a recent Bloomberg interview. “That’s where we want to be.”
Related topics:
Yen Faces Pressure Amid Rising Long-Term Yields and Inflation Concerns
Crypto Today: Litecoin, Binance, and Solana Take Center Stage as Bitcoin Soars to $97K
Australian Dollar Weakens After Employment Data and China’s Policy Announcement
