Allied Gold has formed a strategic alliance with UAE’s Ambrosia Investment Holding, securing $500 million for its mining operations in Africa. The deal includes a joint venture for Mali assets and funding for expanding the Sadiola mine and the Kurmuk project in Ethiopia. Allied aims to list on the NYSE to bolster its market presence and financial growth.
Allied Gold has entered a strategic partnership with Ambrosia Investment Holding, a UAE-based investment fund, securing $500 million to bolster its mining operations in Africa. This partnership will enhance Allied’s endeavors by providing essential regional expertise and market support, as Ambrosia is prominent in the renewable energy sector within the UAE, which has significantly increased its investments in Africa, surpassing $110 billion from 2019 to 2023.
Ambrosia will acquire 50% of Allied’s gold mining assets in Mali, inclusive of an 80% stake in the Sadiola mine, for a cash transaction amounting to $375 million. Of this, $145 million will be paid immediately upon closing, with the remaining $230 million due later. Following the acquisition, the two entities will establish a 50/50 joint venture concerning the Mali assets.
Additionally, the partnership involves Ambrosia purchasing a 12% equity stake in Allied Gold for approximately C$156.6 million, which will be allocated towards funding the phased expansion of the Sadiola mine. Ambrosia will acquire around 46 million shares at C$3.40 each, reflecting a discount compared to Allied’s market price of C$4.70 on the day of the announcement.
This partnership, valued at $500 million, is projected to enhance Allied’s financial flexibility, aiding in its growth initiatives, particularly the expansion of Sadiola and the Kurmuk project in Ethiopia. The phased expansion at the Sadiola mine aims to increase production from 170,000 ounces in 2023 to a target of 200,000-230,000 ounces per year.
Future expansions are planned, with the second phase anticipated for completion by late 2028, targeting production of 400,000 ounces annually for the initial four years and 300,000 ounces per annum over the remaining mine life. The associated costs for these expansions are estimated at $65 million and $400 million, respectively.
As part of the partnership, a new photovoltaic power generation system will be installed at Sadiola under a 12-year supply agreement with ATGC, a UAE power solutions firm, aimed at improving operational costs and the environmental impact of the site. In Ethiopia, the Kurmuk project is set to initiate production by mid-2026 with planned outputs of approximately 290,000 ounces per annum.
Allied Gold is also pursuing a listing on the New York Stock Exchange, leveraging the prestige associated with trading in the US compared to Canada. CEO Peter Marrone indicated that the company meets the listing criteria and anticipates a decision from the NYSE in the first half of the year, emphasizing the value of such an esteemed listing for the company’s growth prospects.
In summary, Allied Gold’s strategic partnership with Ambrosia Investment Holding, including a $500 million capital infusion, positions the company to enhance its mining operations significantly in Africa. With plans to expand production at Sadiola and develop the Kurmuk project, Allied is poised for considerable growth while also exploring a prestigious NYSE listing to further strengthen its market position.
Original Source: www.mining.com
