TORONTO, Nov. 9, 2023
/CNW/ - Allied Gold Corporation (TSX: AAUC) ("Allied" or the
"Company") is pleased to announce that the Company has completed
its previously announced acquisition of the permitted Korali-Sud
Small Scale Mining License as well as beneficial interest of the
highly prospective Lakanfla Exploration License (together, the
"Project" or "Diba") by acquiring all of the shares of Legend Mali
(BVI) III Inc. from LGN Holdings (BVI) Inc., a wholly owned
subsidiary of Elemental Altus Royalties Corp (TSXV: ELE) (OTCQX:
ELEMF) ("Elemental Altus") for consideration comprised of a modest
upfront cash payment, deferred payments based on the achievement of
performance, production and operational milestones, and a Net
Smelter Returns ("NSR") royalty.
Strategic Rationale
- The Company is actively implementing its strategic plan to
maximize oxide ore content at its flagship Sadiola Gold Mine
("Sadiola") as it pursues a two-phased expansion plan. In the
initial Phase 1 expansion, modifications to the existing plant are
underway to accommodate a growing percentage of fresh rock.
Subsequently, in Phase 2, a new processing plant exclusively
dedicated to fresh rock will be constructed.
- Allied's strategic approach revolves around maximizing oxide
ore content to enhance production during the Phase 1 expansion.
This effort aims to reduce costs, thereby maximizing margins,
EBITDA, and cash flows, starting as early as 2024.
- In tandem with ongoing exploration targets aimed at increasing
oxide ore inventory across Allied's portfolio, the Diba Project
plays a crucial role in bolstering the Company's cash flows and
liquidity in the near term. This is particularly significant as the
Company pursues its growth initiatives.
- Situated 15 kilometers south of Sadiola's processing plant and
adjacent to the Sadiola Large Scale Mining License, the Diba
Project presents a unique opportunity. Its geological
characteristics indicate the feasibility of Open Pit mining,
utilizing the same equipment profile as Sadiola. Moreover, the ore
can be processed at the existing CIP plant, offering the potential
to capture significant synergies and create substantial value.
- The operating plan consists of mining and trucking the
high-grade oxides up to a throughput of 1.8 million tonnes per
year. These high-grade oxides are expected to increase the average
throughput at Sadiola given their soft ore characteristics and
have meaningful positive impact on Sadiola's production and cash
flows.
- The acquisition provides Allied with a high-quality, bolt-on,
permitted project with a significant Mineral Resource and excellent
potential for further expansion. As previously noted, the Board has
approved US$12 million in total
development costs for the advancement of the Diba Project,
including expenses for an access road to transport ore to the
Sadiola plant, which is expected to be spent in 2023 and 2024.
- The result of these strategic actions is to increase the
Company's production profile moving into 2024 and 2025 before a
step change in 2026 with the construction of Kurmuk. The
additions of these ounces, at lower costs, are expected to maximize
margin, EBITDA, and cash flows in 2024, 2025, and 2026. These
improvements lay the foundation for enhanced financial performance,
setting the stage for Kurmuk's added contributions. More detailed
information on near-term production guidance will be provided in
due course but the Company presently expects production from
Sadiola to be in the range of 175-180,000 ounces of gold in 2023,
and with Diba, increasing to an average exceeding 230,000 ounces
over 2024 and 2025.
Highlights of the Acquisition
Addition of the Diba Project significantly enhances Sadiola's
footprint, value and growth strategy:
- The Project covers a surface area of approximately 107 square
kilometers in the same geological district as Sadiola, providing
meaningful near and long-term opportunities for production and
financial growth.
- The Diba orebody shows extensive oxidation at depths of up to
70 m and it presents continuous,
higher grade, mineralization near surface, making it amenable to
simple, productive, and cost-efficient open pit mining methods and
agitated leaching at the Sadiola plant.
- Elemental Altus' Mineral Resource Estimate (the "Resource
Estimate") issued in August 2022
confirmed Total Indicated Mineral Resources of 312,000 ounces of
gold with a grade of 1.24 g/t, including 199,000 ounces of gold in
Oxides with an average grade of 1.52 g/t, as well as Inferred
Mineral Resources of 362,000 ounces at 0.88 g/t of gold.
- In its due diligence process and subsequent engineering work,
Allied has validated the Resource Estimate and identified a
potential of approximately 200,000 ounces of gold readily available
in the oxide and transitional categories at the shovel-ready
Korali-Sud project, which are targeted to be added to the near-term
Sadiola mine plan.
- Allied's board approved the deployment of capital to advance
delineation drilling, engineering and early works for Diba and it
expects to define Mineral Reserves and a detailed production plan
by early 2024. The Company expects that a significant tonnage, on a
selective targeted basis, will be processed from this higher grade,
oxidized inventory in 2024 and 2025 resulting in increased
production above the base plan, reducing costs and improving
margins and EBITDA during the construction of Kurmuk, thereby
ensuring more secure cash flows and liquidity.
Purchase Price
The agreed purchase price consists of cash payments and an NSR
royalty.
- Upfront cash payment of US$1
million on closing, followed by deferred amounts payable
upon the attainment of defined production milestones of up to
200,000 ounces produced from Korali-Sud of up to US$5 million.
- NSR Royalty: The remainder of the purchase price consists of an
NSR royalty at a rate of 3% for the first 226,000 ounces of gold
produced from Korali-Sud, and at a rate of 2% for ounces from
Korali-Sud and Lakanfla thereafter.
Qualified Persons
Scientific and technical information contained in this news
release has been reviewed and approved by Matthew McInnes,
Senior Vice President, Studies of the Company. Mr. McInnes is an
employee of the Company and a "qualified person" as defined by
Canadian Securities Administrators' National Instrument 43 101 -
Standards of Disclosure for Mineral Projects.
About Allied Gold Corporation
Allied Gold is a Canadian-based gold producer with a significant
growth profile and mineral endowment which operates a portfolio of
three producing assets and development projects located in Côte
d'Ivoire, Mali and Ethiopia. Led by a team of mining executives
with operational and development experience and proven success in
creating value, Allied Gold aspires to become a mid-tier next
generation gold producer in Africa
and ultimately a leading senior global gold producer.
Cautionary Statement Regarding Forward-Looking
Information
This news release contains certain "forward-looking information"
within the meaning of applicable Canadian securities legislation.
Such forward-looking information is not representative of
historical facts or information or current condition, but instead
represents only Allied Gold's beliefs regarding future events,
plans or objectives, many of which, by their nature, are inherently
uncertain and outside of Allied Gold's control. Generally, such
forward-looking information can be identified by the use of
forward-looking terminology such as "plans", "expects", "is
expected", "scheduled", "estimates", "forecasts", "intends",
"anticipates", "believes", or the negative or variations of such
words and phrases or may contain statements that certain actions,
events or results "may", "could", "would", "might" or "will be
taken", "will continue", "will occur" or "will be achieved". The
forward-looking information contained herein includes, but is not
limited to, information concerning expectations with regards to the
Diba Project, and the resulting beneficial ownership and the key
catalysts expected to be achieved by the Company on the Diba
Project its impact on the business of Allied Gold.
By identifying such information and statements in this manner,
Allied Gold is alerting the reader that such information and
statements are subject to known and unknown risks, uncertainties
and other factors that may cause the actual results, level of
activity, performance or achievements of Allied Gold to be
materially different from those expressed or implied by such
information and statements. In addition, in connection with the
forward-looking information contained in this news release, Allied
Gold has made certain assumptions. Among the key factors that could
cause actual results to differ materially from those projected in
the forward-looking information are the following: the inability of
Allied Gold to achieve any one or more of its key catalysts on the
timeline expected, or at all and any changes in the development of
the business of Allied Gold, as well as those risk factors more
generally set out in Allied Gold's annual information form
available under Allied Gold's profile on SEDAR+ at
www.sedarplus.ca. Should one or more of these risks, uncertainties
or other factors materialize, or should assumptions underlying the
forward-looking information prove incorrect, actual results may
vary materially from those described herein as intended, planned,
anticipated, believed, estimated or expected.
Although Allied Gold believes that the assumptions and factors
used in preparing, and the expectations contained in, the
forward-looking information are reasonable, undue reliance should
not be placed on such information, and no assurance or guarantee
can be given that such forward-looking information will prove to be
accurate. The forward-looking information contained in this news
release is provided as of the date of this news release, and Allied
Gold does not undertake to update any forward-looking information
that is contained or referenced herein, except in accordance with
applicable Canadian securities laws.
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SOURCE Allied Gold Corporation