TORONTO, Feb. 21,
2024 /CNW/ - Allied Gold Corporation (TSX: AAUC)
("Allied" or the "Company") herein provides its preliminary
operating results for 2023, alongside the Company's 2024 operating
guidance and medium term outlook, including updates on Mineral
Reserves and Mineral Resources. This announcement underscores the
significant potential and inherent upside within Allied's asset
portfolio, supported by growth and robust, expanding geological
endowments across both established and emerging premier gold mining
jurisdictions.
Production for the fourth quarter totaled 94,755 ounces of gold,
with full year 2023 production reaching 343,817 ounces, slightly
below the previously disclosed 2023 production range of
approximately 350,000 ounces. The All-in Sustaining Costs
("AISC")(1) for the year are estimated at less than
$1,585 per ounce, which is in line
with the normal cost tolerances used by Allied, which are two
percent above and below Allied's guided AISC(1), which,
in this case, was $1,550 per ounce
for 2023.
The Company's producing mines are expected to sustainably
produce at least 375,000 ounces per year, as evidenced by the run
rate delivered in the fourth quarter. Building on this foundation,
Allied has executed several strategic project advancements and
exploration efforts throughout 2023, laying the groundwork for
future growth and enhanced cash flow.
The advancement of the Kurmuk project into the execution phase,
with its confirmed design for a 6Mt/y capacity operation,
represents a significant milestone. This phase involves the
establishment of Allied's project management framework, the
appointment of an EPCM contractor, the initiation of detailed
engineering and early works, and the procurement of critical
project services and infrastructure along with strengthening
relationships and engaging with local stakeholders. Additionally,
the Company has established a phased expansion plan at Sadiola,
designed to significantly reduce capital expenditures in the short
term, while boosting production at lower costs.
On the exploration front, Allied expanded its Mineral Reserves
and Resources, replacing depletion by 190% in 2023. The Company
remains focused on extending the mine lives at Agbaou, Bonikro, and
Kurmuk, and on increasing the oxide mineral inventory at Sadiola,
facilitating a smoother transition for the phased expansion and
providing additional processing flexibility. Moreover, Allied
advanced its regional exploration programs aimed at uncovering
significant potential across its portfolio, realizing exploration
success at highly prospective locations such as Oume, located north
of Bonikro mill, and Tsenge, located south to the project mill at
Kurmuk.
Optimizations in mine contractor management and enhancements in
processing plant controls, including increased security and
metallurgical oversight at the gravity circuit, are key components
of Allied's strategy to solidify a sustainable production base.
These measures underscore the Company's commitment to continuous
improvement, setting the stage for ongoing success and growth.
In 2024, Allied anticipates producing 375,000 to 405,000 ounces
of gold. Achieving the higher end of this guided range primarily
hinges on the successful completion of mine contractor transition
at Agbaou, where efforts to enhance efficiencies and maximize
long-term value are underway, notwithstanding the short-term
impacts on production.
(000's
ounces)
|
2023
Actual
|
2024
Guidance
|
Sadiola
|
171,007
|
195,000 –
205,000
|
Bonikro
|
99,409
|
95,000 –
105,000
|
Agbaou
|
73,401
|
85,000 –
95,000
|
Total Gold
Production
|
343,817
|
375,000 –
405,000
|
Regarding costs, the projected mine-site level
AISC(1) for 2024 is expected to be $1,400 per ounce marking a significant reduction
compared to the preliminary AISC(1) for 2023. Allied
offers this cost guidance within a range of +/- 2%, with the guided
figure representing the range's midpoint.
(US$/oz
Sold)
|
|
2024 Cash
Costs(1)
|
2024 Mine-Site
AISC(1)
|
Sadiola
|
|
1,075
|
1,150
|
Bonikro
|
|
1,275
|
1,650
|
Agbaou
|
|
1,595
|
1,675
|
Total
|
|
1,250
|
1,400
|
Anticipated cost savings in 2024, amounting to nearly
$200 per ounce compared to 2023, are
set to reflect the benefits of increased production and continued
optimization efforts.
Corporate items are expected to add approximately $100 per ounce sold to arrive at the
corporate-level AISC(1), with this impact decreasing in
future periods as costs decline and production rises.
The following table presents expansionary capital, sustaining
capital and exploration spend expectations by mine and
company-level for 2024:
(US$
millions)
|
Expansionary
Capital
|
Sustaining
Capital
|
Total
Exploration
|
Sadiola
|
35.0
|
12.5
|
8.0
|
Bonikro
|
1.0
|
5.5
|
10.5
|
Agbaou
|
0.5
|
7.5
|
6.0
|
Kurmuk
|
155.0
|
-
|
7.5
|
Corporate
|
7.0
|
4.0
|
-
|
Total
|
198.5
|
29.5
|
32.0
|
Approximately 70% of the Company's expected exploration spend is
capital in nature.
The following table presents other expenditure expectations for
2024:
(US$
millions)
|
2024
Guidance
|
Total
DD&A
|
55
|
Cash based
G&A
|
38
|
Cash income taxes paid
(assumes $2,000/oz Au)
|
60
|
Allied's key focus for 2024 is the sustainable reduction of
costs across its asset portfolio. Alongside this, the Company is
dedicated to delivering near-term oxide ores at Sadiola and
advancing construction activities at Kurmuk, while also continuing
its exploration success to extend mine life, particularly in Côte
d'Ivoire. Based on ongoing efforts to optimize assets, Allied will
release a three-year production and cost forecast in due
course.
While not currently reflected in Allied's official one-year
guidance, the operating trends clearly support the Company's vision
of achieving significant growth at substantially lower costs and
underpin the outlook for 2025 and 2026.
At Sadiola, gold production is anticipated to increase
sequentially each year during the outlook period, with a goal of
achieving 230,000 ounces per year. The improvement is expected to
be driven by the inclusion of additional oxide ore from Diba and
targets such as Sekekoto West, FE4, and S12, alongside the Phase 1
expansion. These developments are anticipated to offer further
opportunities for production increases. For 2025, the
AISC(1) is expected to remain within the range of
$1,150 to $1,250 per ounce. Although AISC(1) may
see a slight increase in 2026, it is projected to stay below
$1,350 per ounce. This anticipated
rise in costs is partly attributed to the preparations for the
mine's second phase expansion later in that year, which will follow
the commencement of production at Kurmuk. During this period, costs
are expected to continue benefiting from increased production and
optimizations. With the availability of oxide ore from Diba and
other targets, Phase 1 execution is now targeted to start in late
2024, with production commencing in early 2026.
In the near term, Bonikro is expected to achieve modest yearly
increases in gold production during the outlook period, with a goal
of exceeding 110,000 ounces annually. This projection does not
account for the potential additional benefits from Oume. This
improvement is due to the stripping phase planned for 2024 that
will expose higher-grade materials in 2025 and 2026, significantly
reducing the mine-site AISC(1) to below $1,050 per ounce by the end of the outlook
period. At Oume, there is potential for further gains, including
advanced resource drilling at Oume West and North, as well as at
the Akissi-So target south of Bonikro mill.
For Agbaou, gold production is expected to remain consistent
each year throughout the outlook period, not falling below 90,000
ounces annually. The improvements are attributed to the
identification of additional Mineral Reserves in Agbalé, as well as
mining and plant optimizations. These enhancements enable the mill
to handle relatively harder rock blends more effectively, while
also offering the opportunity to increase oxide feed from Agbalé
and other targets.
Kurmuk is expected to start production by mid-2026, contributing
more than 175,000 ounces of gold to the latter half of the 2026
forecast. Significant exploration potential at near-mine locations
around Dish Mountain and Ashashire, and the Tsenge prospect,
supports a strategic mine life of at least 15 years at a mine-site
AISC(1) below $950 per
ounce. This expected performance is driven by increased throughput
and unit costs savings, access to low-cost renewable energy supply
and high grade ore near surface among others.
Overall, these developments across Allied's portfolio, from
enhanced production and cost efficiencies at Sadiola and Bonikro to
the promising exploration and operational optimizations at Agbaou
and Kurmuk, collectively reinforce a positive outlook, positioning
the Company to deliver >600,000 ounces of gold at an
AISC(1) below $1,225 per
ounce in 2026.
ALLIED'S OUTLOOK UNDERPINNED BY
EXPANDING MINERAL RESERVES AND MINERAL RESOURCES
Allied's near-term guidance and longer-term outlook is supported
by growing Mineral Reserves and Mineral Resources which underpin
the longevity of the Company's sustainable production platform and
the optionality to increase near term production and cash flows
from near mine high-yield targets. As at December 31, 2023, Proven and Probable Mineral
Reserves were reported at 11.2 million ounces of gold contained
within 238 million tonnes at a grade of 1.46 g/t, an increase of
over 300,000 ounces versus the previous year. This increase
reflects meaningful growth at Sadiola, Agbaou and Kurmuk, with
partial replacement of mining depletion at Bonikro. Similarly,
total Measured and Indicated Mineral Resources grew to over 16.0
million ounces of gold contained within 330 million tonnes at a
grade of 1.51 g/t, up from 15.2 million ounces in the previous
year, partly due to the conversion of Inferred Mineral Resources,
which ended the year at 1.8 million ounces contained within 43
million tonnes at a grade of 1.29 g/t. Highlights of the expanding
mineral inventory, and the strategic initiatives leveraging their
growth, include:
- Optimizing oxide mineral inventory at Sadiola: Allied is
focused on optimizing the oxide mineral inventory at Sadiola,
aiming to enhance the mine's value by leveraging ongoing
exploration successes. This strategy is designed to optimize
near-term cash flow and refine the capital expenditure profile. The
start of production from Diba, anticipated in the first half of
2024, will introduce near-surface high-grade oxide ore into the
processing mix, complementing the increased rates of fresh ore
feed. As of December 31, 2023, Allied
has identified Proven and Probable Mineral Reserves at Diba,
totaling 280,000 ounces of gold contained within 6.1 million tonnes
at a grade of 1.43 g/t. Additionally, the total Measured and
Indicated Resource at Diba, inclusive of Mineral Reserves, is now
estimated at 377,000 ounces of gold contained within 8.8 million
tonnes at a grade of 1.33 g/t. To further grow near-term oxide
inventories and maximize near-term free cash flow and operational
flexibility, Allied has approved an $8
million 2024 exploration budget at Sadiola, in part, to
support a 12,000-meter drilling program aimed at extending these
Mineral Resources. Significant work programs are also being pursued
at Sekekoto West, FE4 and S12 where results to date show the
potential to add additional near-term high-grade oxide ore to the
mine plans. Sadiola maintains a world-class mineral inventory with
nearly 7.4 million ounces of gold in Mineral Reserves, contained in
156 million tonnes at a grade of 1.48 g/t. With the addition of
Diba helping to drive a 187% replacement of depletion during 2023,
and additional near mine high-grade oxide targets, the Company has
increased flexibility for the execution of the phased expansion, in
particular allowing for an optimized allocation of capital and
execution of phase 1, which is now expected to be in production in
early 2026.
- Extending mine life at Agbaou: The Company is focused on
extending the life of its mines in Côte d'Ivoire through strategic
exploration and resource management, with new life-of-mine planning
at Agbaou supporting total gold production of over 465,000 ounces
through 2028 at a mine-site AISC(1) below $1,450 per ounce versus the most recent
life-of-mine estimate which saw mining cease in mid-2026. The
proposed pit stages for the improved life-of-mine are shown in
Figure 1. This outlook is supported by updated Proven and Probable
Mineral Reserves of approximately 0.5 million ounces of gold
contained within 7.9 million tonnes at a grade of
1.84 g/t. This represents a 25% increase
compared to the previous year and equates to a 229% replenishment
of the year's depletion. Notably, Measured and Indicated Resources,
inclusive of Mineral Reserves, also increased during the year to
nearly 0.9 million ounces of gold contained in 13.3 million tonnes
at a grade of 1.99 g/t, up from 0.6
million ounces. The Company is actively optimizing operations,
focusing on cost reduction while extending mine life and pursuing
growth through the newly defined Agbalé deposit. This
deposit is planned for processing at Agbaou, as
detailed in the following section. The company has allocated
$6 million to further advance
exploration initiatives at Agbaou in 2024.
- Exploration upside at Bonikro: At Bonikro, ongoing
drilling successes at Agbalé and Oume (formerly known as Dougbafla)
have led to a 28% increase in Measured and Indicated Mineral
Resources, now totaling 1.4 million ounces of gold in 32.8 million
tonnes at a grade of 1.32 g/t. Despite a decrease in Mineral
Reserves by 74,000 ounces to 0.6 million ounces contained in 13.7
million tonnes at a grade of 1.30 g/t, the Company managed to
partially offset depletion given 2023 production of 99,409 ounces.
This reflects the exploration strategy to increase total Mineral
Resources at Oume first to better define the orebody before
stepping up infill-drilling. Exploration drilling continues at
Oume, including advanced resource drilling at Oume West and North.
Additionally, Allied is conducting resource drilling at Akissi-So
and scout drilling at Agbalé in the Hire area to expand the mineral
inventory. As noted above, Agbalé ore is planned to be transported
to Agbaou due to its metallurgy and short haulage distances. These
efforts are part of a broader strategy to extend the strategic mine
life in Côte d'Ivoire to over 10 years, aiming for annual
production of 180-200,000 gold ounces at reduced costs. To support
this aim, $10.5 million is allocated
for total exploration spending at Bonikro in 2024.
- Definition Drilling and Upside Potential at Kurmuk:
Definition drilling at Kurmuk has resulted in a 5% increase in
Proven and Probable Mineral Reserves to 2.7 million gold ounces
contained in 60.5 million tonnes at a grade of 1.41 g/t. Similarly,
total Measured and Indicated Mineral Resources increased to over
3.1 million ounces contained in 57.9 million tonnes at a grade of
1.68 g/t. These advancements, however, do not yet reflect the
outcomes of in-pit Inferred Mineral Resource conversion drilling
and ongoing regional exploration efforts, which has continued to
meet with success and supports the broader strategy to extend the
strategic mine life to at least 15 years. Drilling efforts, as part
of the $7.5 million 2024 exploration
budget at Kurmuk, are concentrated on near-mine targets around Dish
Mountain and Ashashire, which are the initial open pits housing all
current Mineral Reserves. Additionally, drilling activities
continue with several diamond drill rigs at the Tsenge Prospect,
defined by a 9km gold in soil and rock anomaly. Initial holes at
Tsenge have returned economic widths and grades of gold in drill
core, indicating significant upside potential which could
potentially contribute to extend mine life and optimize short term
production.
FINANCIAL FLEXIBILITY
Allied is actively executing a select number of non-dilutive
alternatives to enhance the company's financial flexibility as it
progresses with its growth initiatives, which include streams on
producing assets and a gold prepay facility. This strategic
direction is prompted by the current capital markets not fully
capturing the inherent value of the Company's assets, leading
Allied to seek alternative sources of capital that offer low-cost
options with the added benefit of more accurately reflecting true
value to market participants. Among these initiatives, Allied is in
advanced discussions to implement a stream for approximately
$50 million on non-core assets, with
the competitive tension in the market supporting the potential to
raise proceeds of about $75-100
million from a small 0.75-1.00% stream on Sadiola. Additionally,
the company aims to secure at least $100
million in proceeds by late 2024 or early 2025 through a
gold prepay facility, which not only brings forward revenue but
also includes a built-in gold price collar amidst favorable market
rates, acting as a hedge against gold price depreciation during the
construction of Kurmuk. Furthermore, Allied has completed
negotiations and entered into a Revolving Credit Facility, which it
does not expect to draw upon, reinforcing its financial strategy to
support growth while mitigating downside price risks.
The Company will release its fourth quarter and year-end 2023
operational and financial results after the market closes on
Tuesday, March 26, 2024, Eastern Daylight
Time ("EDT"). The Company will then host a conference call
and webcast to review the results on Wednesday, March 27, 2024, at 9:00 a.m. EDT.
Fourth Quarter 2023
Conference Call
|
|
|
Toll-free dial-in
number (Canada/US):
|
1-800-898-3989
|
Local dial-in
number:
|
416-406-0743
|
Toll Free
(UK):
|
00-80042228835
|
Participant
passcode:
|
5324345#
|
Webcast:
|
https://alliedgold.com/investors/presentations
|
Conference Call
Replay
|
Toll-free dial-in
number (Canada/US):
|
1-800-408-3053
|
Local dial-in
number:
|
905-694-9451
|
Passcode:
|
6354190#
|
The conference call replay will be available from
12:00 p.m. EDT on March 26,
2024, until 11:59 p.m. EDT on
April 26, 2024.
Mineral Reserves at 31 December
2023
Mineral
Property
|
Proven Mineral
Reserves
|
Probable Mineral
Reserves
|
Total Mineral
Reserves
|
Tonnes
(kt)
|
Grade
(g/t)
|
Content
(koz)
|
Tonnes
(kt)
|
Grade
(g/t)
|
Content
(koz)
|
Tonnes
(kt)
|
Grade
(g/t)
|
Content
(koz)
|
Sadiola Mine
|
18,612
|
0.82
|
492
|
137,174
|
1.57
|
6,907
|
155,786
|
1.48
|
7,399
|
Kurmuk
Project
|
21,864
|
1.51
|
1,063
|
38,670
|
1.35
|
1,678
|
60,534
|
1.41
|
2,742
|
Bonikro Mine
|
4,771
|
0.71
|
108
|
8,900
|
1.62
|
462
|
13,671
|
1.30
|
571
|
Agbaou Mine
|
1,815
|
2.01
|
117
|
6,092
|
1.79
|
351
|
7,907
|
1.84
|
469
|
Total Mineral
Reserves
|
47,061
|
1.18
|
1,782
|
190,836
|
1.53
|
9,399
|
237,897
|
1.46
|
11,180
|
Notes:
- Mineral Reserves are stated effective as at December 31, 2023 and estimated in accordance
with CIM Standards and NI 43-101.
- Shown on a 100% basis.
- Reflects that portion of the Mineral Resource which can be
economically extracted by open pit methods.
- Considers the modifying factors and other parameters, including
but not limited to the mining, metallurgical, social,
environmental, statutory and financial aspects of the project.
Sadiola Mine:
- Includes an allowance for mining dilution at 8% and ore loss at
3%
- A base gold price of US$1,500/oz
was used for the pit optimization, with the selected pit shells
using values of US$1,320/oz (revenue
factor 0.88) for Sadiola Main and US$1,500/oz (revenue factor 1.00) for FE3, FE4,
Diba, Tambali and Sekekoto.
- The cut-off grades used for Mineral Reserves reporting were
informed by a US$1,500/oz gold price
and vary from 0.31 g/t to 0.73 g/t for different ore types due to
differences in recoveries, costs for ore processing and ore
haulage.
Kurmuk Project:
- Includes an allowance for mining dilution at 18% and ore loss
at 2%
- A base gold price of US$1,500/oz
was used for the pit optimization, with the selected pit shells
using values of US$1,320/oz (revenue
factor 0.88) for Ashashire and US$1,440/oz (revenue factor 0.96) for Dish
Mountain.
- The cut-off grades used for Mineral Reserves reporting were
informed by a US$1,500/oz gold price
and vary from 0.30 g/t to 0.45 g/t for different ore types due to
differences in recoveries, costs for ore processing and ore
haulage.
Bonikro Mine:
- Includes an allowance for mining dilution at 8% and ore loss at
5%
- A base gold price of $1,500/oz
was used for the Mineral Reserves for the Bonikro pit:
- With the selected pit shell using a value of $1,388/oz (revenue factor 0.925).
- Cut-off grades vary from 0.68 to 0.74 g/t Au for different
ore types due to differences in recoveries, costs for ore
processing and ore haulage.
- A base gold price of $1,800/oz
was used for the Mineral Reserves for the Agbalé pit:
- With the selected pit shell using a value of US$1,800/oz (revenue factor 1.00).
- Cut-off grades vary from 0.58 to 1.00 g/t Au for different
ore types to the Agbaou processing plant due to differences in
recoveries, costs for ore processing and ore haulage
Agbaou Mine:
- Includes an allowance for mining dilution at 26% and ore loss
at 1%
- A base gold price of $1,500/oz
was used for the Mineral Reserves for the:
- Pit designs (revenue factor 1.00) apart from North Gate (Stage
41) and South Sat (Stage 215) pit designs which used a higher short
term gold price of $1,800/oz and
account for 49 koz or 10% of the Mineral Reserves.
- Cut-off grades which range from 0.49 to 0.74 g/t for
different ore types due to differences in recoveries, costs for ore
processing and ore haulage.
Mineral Resources at 31 December
2023
Mineral
Property
|
Measured Mineral
Resources
|
Indicated
Mineral
Resources
|
Total Measured
and
Indicated Mineral Resources
|
Tonnes
(kt)
|
Grade
(g/t)
|
Content
(koz)
|
Tonnes
(kt)
|
Grade
(g/t)
|
Content
(koz)
|
Tonnes
(kt)
|
Grade
(g/t)
|
Content
(koz)
|
Sadiola Mine
|
20,079
|
0.86
|
557
|
205,952
|
1.53
|
10,101
|
226,031
|
1.47
|
10,659
|
Kurmuk
Project
|
20,472
|
1.74
|
1,148
|
37,439
|
1.64
|
1,972
|
57,912
|
1.68
|
3,120
|
Bonikro Mine
|
7,033
|
0.98
|
222
|
25,793
|
1.41
|
1,171
|
32,826
|
1.32
|
1,393
|
Agbaou Mine
|
2,219
|
2.15
|
154
|
11,130
|
1.96
|
701
|
13,349
|
1.99
|
855
|
Total Mineral
Resources
|
49,804
|
1.30
|
2,081
|
280,315
|
1.55
|
13,945
|
330,118
|
1.51
|
16,027
|
Inferred Mineral Resources at 31
December 2023
Mineral
Property
|
Inferred Mineral
Resources
|
Tonnes
(kt)
|
Grade
(g/t)
|
Content
(koz)
|
Sadiola Mine
|
16,177
|
1.12
|
581
|
Kurmuk
Project
|
5,980
|
1.62
|
311
|
Bonikro Mine
|
19,588
|
1.30
|
816
|
Agbaou Mine
|
959
|
1.84
|
57
|
Total Mineral
Resources
|
42,704
|
1.29
|
1,765
|
Notes:
- Mineral Resources are estimated in accordance with CIM
Standards and NI 43-101.
- Shown on a 100% basis.
- Are inclusive of Mineral Reserves. Mineral Resources that are
not Mineral Reserves do not have demonstrated economic
viability.
- Are listed at 0.5 g/t Au cut-off grade, constrained within an
US$1,800/oz pit shell and depleted to
31 December 2023.
- Rounding of numbers may lead to discrepancies when summing
columns.
Qualified Persons
Except as otherwise disclosed, all scientific and technical
information contained in this press release has been reviewed and
approved by Sébastien Bernier, P.Geo (Vice President, Technical
Performance and Compliance). Mr. Bernier is an employee of Allied
and a "Qualified Person" as defined by Canadian Securities
Administrators' National Instrument 43-101 - Standards of
Disclosure for Mineral Projects ("NI 43-101").
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.
END
NOTES
|
|
|
(1)
|
This is a non-GAAP
financial performance measure. Refer to the Non-GAAP Financial
Performance Measures section at the end of this news
release.
|
CAUTIONARY STATEMENT REGARDING
FORWARD-LOOKING INFORMATION AND STATEMENTS
This press release contains "forward-looking information"
including "future oriented financial information" under applicable
Canadian securities legislation. Except for statements of
historical fact relating to the Company, information contained
herein constitutes forward-looking information, including, but not
limited to, any information as to the Company's strategy,
objectives, plans or future financial or operating performance.
Forward-looking statements are characterized by words such as
"plan", "expect", "budget", "target", "project", "intend",
"believe", "anticipate", "estimate" and other similar words or
negative versions thereof, or statements that certain events or
conditions "may", "will", "should", "would" or "could" occur. In
particular, forward-looking information included in this press
release includes, without limitation, statements with respect
to:
- the Company's expectations in connection with the production
and exploration, development and expansion plans at the Company's
projects discussed herein being met;
- the Company's plans to continue building on its base of
significant gold production, development-stage properties,
exploration properties and land positions in Mali, Côte d'Ivoire and Ethiopia through optimization initiatives at
existing operating mines, development of new mines, the advancement
of its exploration properties and, at times, by targeting other
consolidation opportunities with a primary focus in Africa;
- the Company's expectations relating to the performance of its
mineral properties;
- the estimation of Mineral Reserves and Mineral Resources;
- the timing and amount of estimated future production;
- the estimation of the life of mine of the Company's
projects;
- the timing and amount of estimated future capital and operating
costs;
- the costs and timing of exploration and development
activities;
- the Company's expectations regarding the timing of feasibility
or pre-feasibility studies, conceptual studies or environmental
impact assessments;
- the effect of government regulations (or changes thereto) with
respect to restrictions on production, export controls, income
taxes, expropriation of property, repatriation of profits,
environmental legislation, land use, water use, land claims of
local people, mine safety and receipt of necessary permits;
- the Company's community relations in the locations where it
operates and the further development of the Company's social
responsibility programs;
- the Company's expectations regarding the payment of any future
dividends; and
- the Company's aspirations to become a mid-tier next generation
gold producer in Africa and
ultimately a leading senior global gold producer.
Forward-looking information is based on the opinions,
assumptions and estimates of management considered reasonable at
the date the statements are made, and is inherently subject to a
variety of risks and uncertainties and other known and unknown
factors that could cause actual events or results to differ
materially from those projected in the forward-looking information.
These factors include the Company's dependence on products produced
from its key mining assets; fluctuating price of gold; risks
relating to the exploration, development and operation of mineral
properties, including but not limited to adverse environmental and
climatic conditions, unusual and unexpected geologic conditions and
equipment failures; risks relating to operating in emerging
markets, particularly Africa,
including risk of government expropriation or nationalization of
mining operations; health, safety and environmental risks and
hazards to which the Company's operations are subject; the
Company's ability to maintain or increase present level of gold
production; nature and climatic condition risks; counterparty,
credit, liquidity and interest rate risks and access to financing;
cost and availability of commodities; increases in costs of
production, such as fuel, steel, power, labour and other
consumables; risks associated with infectious diseases; uncertainty
in the estimation of Mineral Reserves and Mineral Resources; the
Company's ability to replace and expand Mineral Resources and
Mineral Reserves, as applicable, at its mines; factors that may
affect the Company's future production estimates, including but not
limited to the quality of ore, production costs, infrastructure and
availability of workforce and equipment; risks relating to partial
ownerships and/or joint ventures at the Company's operations;
reliance on the Company's existing infrastructure and supply chains
at the Company's operating mines; risks relating to the
acquisition, holding and renewal of title to mining rights and
permits, and changes to the mining legislative and regulatory
regimes in the Company's operating jurisdictions; limitations on
insurance coverage; risks relating to illegal and artisanal mining;
the Company's compliance with anti-corruption laws; risks relating
to the development, construction and start-up of new mines,
including but not limited to the availability and performance of
contractors and suppliers, the receipt of required governmental
approvals and permits, and cost overruns; risks relating to
acquisitions and divestures; title disputes or claims; risks
relating to the termination of mining rights; risks relating to
security and human rights; risks associated with processing and
metallurgical recoveries; risks related to enforcing legal rights
in foreign jurisdictions; competition in the precious metals mining
industry; risks related to the Company's ability to service its
debt obligations; fluctuating currency exchange rates (including
the US Dollar, Euro, West African CFA Franc and Ethiopian Birr
exchange rates); the values of assets and liabilities based on
projected future conditions and potential impairment charges; risks
related to shareholder activism; timing and possible outcome of
pending and outstanding litigation and labour disputes; risks
related to the Company's investments and use of derivatives;
taxation risks; scrutiny from non-governmental organizations;
labour and employment relations; risks related to third-party
contractor arrangements; repatriation of funds from foreign
subsidiaries; community relations; risks related to relying on
local advisors and consultants in foreign jurisdictions; the impact
of global financial, economic and political conditions, global
liquidity, interest rates, inflation and other factors on the
Company's results of operations and market price of common shares;
risks associated with financial projections; force majeure events;
the Company's plans with respect to dividend payment; transactions
that may result in dilution to common shares; future sales of
common shares by existing shareholders; the Company's dependence on
key management personnel and executives; possible conflicts of
interest of directors and officers of the Company; the reliability
of the Company's disclosure and internal controls; compliance with
international ESG disclosure standards and best practices;
vulnerability of information systems including cyber attacks; as
well as those risk factors discussed or referred to herein.
Although the Company has attempted to identify important factors
that could cause actual actions, events or results to differ
materially from those described in forward-looking information,
there may be other factors that could cause actions, events or
results to not be as anticipated, estimated or intended. There can
be no assurance that forward-looking information will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such statements. The Company
undertakes no obligation to update forward-looking information if
circumstances or management's estimates, assumptions or opinions
should change, except as required by applicable law. The reader is
cautioned not to place undue reliance on forward-looking
information. The forward-looking information contained herein is
presented for the purpose of assisting investors in understanding
the Company's expected financial and operational performance and
results as at and for the periods ended on the dates presented in
the Company's plans and objectives and may not be appropriate for
other purposes.
CAUTIONARY NOTES TO INVESTORS –
MINERAL RESERVE AND MINERAL RESOURCE ESTIMATES
Mineral Resources are stated effective as at December 31, 2023, reported at a 0.5 g/t cut-off
grade, constrained within an $1,800/oz pit shell and estimated in accordance
with the 2014 Canadian Institute of Mining, Metallurgy and
Petroleum Definition Standards for Mineral Resources and Mineral
Reserves ("CIM Standards") and 43-101. Where Mineral Resources are
stated alongside Mineral Reserves, those Mineral Resources are
inclusive of, and not in addition to, the stated Mineral Reserves.
Mineral Resources that are not Mineral Reserves do not have
demonstrated economic viability.
Mineral Reserves are stated effective as at December 31, 2023 and estimated in accordance
with CIM Standards and NI 43-101. The Mineral Reserves:
- are inclusive of the Mineral Resources which were converted in
line with the material classifications based on the level of
confidence within the Mineral Resource estimate;
- reflect that portion of the Mineral Resources which can be
economically extracted by open pit methods;
- consider the modifying factors and other parameters, including
but not limited to the mining, metallurgical, social,
environmental, statutory and financial aspects of the project;
- include an allowance for mining dilution and ore loss; and
- were reported using cut-off grades that vary by ore type due to
variations in recoveries and operating costs. The majority (99.3%
of contained gold) of the cut-off grades and pit shells were based
on a $1,500/oz gold price with three
short term pits (Agbale, North Gate and South Sat 3 cutback) were
based on a $1,800/oz gold price.
Mineral Reserve and Mineral Resource estimates are shown on a
100% basis. Designated government entities and national minority
shareholders hold the following interests in each of the mines: 20%
of Sadiola, 10% of Bonikro and 15% of Agbaou. Only a portion of the
government interests are carried. The Government of Ethiopia is entitled to a 7% equity
participation in Kurmuk once the mine enters into commercial
production.
The Mineral Resource and Mineral Reserve estimates for each of
the Company's mineral properties have been approved by the
qualified persons, within the meaning of NI 43-101, as set forth
below:
- Mineral Resources: John Cooke of
Allied Gold Corporation
- Mineral Reserves: Steve Craig of
Orelogy Consulting Pty Ltd.
Except as otherwise disclosed, all scientific and technical
information contained in this press release has been reviewed and
approved by Sébastien Bernier, P.Geo (Vice President, Technical
Performance and Compliance). Mr. Bernier is an employee of Allied
and a "Qualified Person" as defined by Canadian Securities
Administrators' NI 43-101.
Readers should also refer to the technical reports in respect of
the Sadiola Mine, the Kurmuk Project, the Bonikro Mine and the
Agbaou Mine, as well as the Annual Information Form of the Company
for the year ended December 31, 2022
dated September 7, 2023, each
available on SEDAR at www.sedarplus.ca for further information on
Mineral Reserves and Mineral Resources, which is subject to the
qualifications and notes set forth therein.a
CAUTIONARY NOTE TO U.S. INVESTORS
REGARDING ESTIMATES OF MEASURED, INDICATED AND INFERRED
RESOURCES
This press release uses the terms "Measured", "Indicated" and
"Inferred" Mineral Resources as defined in accordance with NI
43-101. United States readers are
advised that while such terms are recognized and required by
Canadian securities laws, the United States Securities and Exchange
Commission does not recognize them. Under United States standards, mineralization may
not be classified as a "reserve" unless the determination has been
made that the mineralization could be economically and legally
produced or extracted at the time the reserve calculation is made.
United States readers are
cautioned not to assume that all or any part of the mineral
deposits in these categories will ever be converted into reserves.
In addition, "Inferred Resources" have a great amount of
uncertainty as to their existence, and as to their economic and
legal feasibility. It cannot be assumed that all or any part of an
Inferred Resource will ever be upgraded to a higher category.
United States readers are also
cautioned not to assume that all or any part of an Inferred Mineral
Resource exists or is economically or legally mineable.
CAUTIONARY STATEMENT REGARDING
NON-GAAP MEASURES
The Company has included certain non-GAAP financial performance
measures to supplement its Consolidated Financial Statements, which
are presented in accordance with IFRS, including the following:
- Cash costs per gold ounce sold;
- AISC per gold ounce sold; and
The Company believes that these measures, together with measures
determined in accordance with IFRS, provide investors with an
improved ability to evaluate the underlying performance of the
Company.
Non-GAAP financial performance measures do not have any
standardized meaning prescribed under IFRS, and therefore may not
be comparable to similar measures employed by other companies.
Non-GAAP financial performance measures are intended to provide
additional information, and should not be considered in isolation
or as a substitute for measures of performance prepared in
accordance with IFRS and are not necessarily indicative of
operating costs, operating earnings or cash flows presented under
IFRS.
Management's determination of the components of non-GAAP
financial performance measures and other financial measures are
evaluated on a periodic basis, influenced by new items and
transactions, a review of investor uses and new regulations as
applicable. Any changes to the measures are duly noted and
retrospectively applied, as applicable. Subtotals and per unit
measures may not calculate based on amounts presented in the
following tables due to rounding.
The measures of cash costs and AISC, along with revenue from
sales, are considered to be key indicators of a company's ability
to generate operating earnings and cash flows from its mining
operations.
CASH COSTS PER GOLD OUNCE
SOLD
Cash costs include mine site operating costs such as mining,
processing, administration, production taxes and royalties which
are not based on sales or taxable income calculations. Cash costs
exclude DA, exploration costs, accretion and amortization of
reclamation and remediation, and capital, development and
exploration spend. Cash costs include only items directly related
to each mine site, and do not include any cost associated with the
general corporate overhead structure.
The Company discloses cash costs because it understands that
certain investors use this information to determine the Company's
ability to generate earnings and cash flows for use in investing
and other activities. The Company believes that conventional
measures of performance prepared in accordance with IFRS do not
fully illustrate the ability of its operating mines to generate
cash flows. The most directly comparable IFRS measure is cost of
sales, excluding DA. As aforementioned, this non-GAAP measure does
not have any standardized meaning prescribed under IFRS, and
therefore may not be comparable to similar measures employed by
other companies, should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with
IFRS, and is not necessarily indicative of operating costs,
operating earnings or cash flows presented under IFRS.
Cash costs are computed on a weighted average basis, with the
aforementioned costs, net of by-product revenue credits from sales
of silver, being the numerator in the calculation, divided by gold
ounces sold.
AISC PER GOLD OUNCE SOLD
AISC figures are calculated generally in accordance with a
standard developed by the World Gold Council ("WGC"), a
non-regulatory, market development organization for the gold
industry. Adoption of the standard is voluntary, and the standard
is an attempt to create uniformity and a standard amongst the
industry and those that adopt it. Nonetheless, the cost measures
presented herein may not be comparable to other similarly titled
measures of other companies. The Company is not a member of the WGC
at this time.
AISC include cash costs (as defined above), mine sustaining
capital expenditures (including stripping), sustaining mine-site
exploration and evaluation expensed and capitalized, and accretion
and amortization of reclamation and remediation. AISC exclude
capital expenditures attributable to projects or mine expansions,
exploration and evaluation costs attributable to growth projects,
DA, income tax payments, borrowing costs and dividend payments.
AISC include only items directly related to each mine site, and do
not include any cost associated with the general corporate overhead
structure. As a result, Total AISC represent the weighted average
of the three operating mines, and not a consolidated total for the
Company. Consequently, this measure is not representative of all of
the Company's cash expenditures.
Sustaining capital expenditures are expenditures that do not
increase annual gold ounce production at a mine site and exclude
all expenditures at the Company's development projects as well as
certain expenditures at the Company's operating sites that are
deemed expansionary in nature, such as the Sadiola Phased
Expansion, the construction and development of Kurmuk and the PB5
pushback at Bonikro. Exploration capital expenditures
represent exploration spend that has met criteria for
capitalization under IFRS.
The Company discloses AISC as it believes that the measure
provides useful information and assists investors in understanding
total sustaining expenditures of producing and selling gold from
current operations, and evaluating the Company's operating
performance and its ability to generate cash flow. The most
directly comparable IFRS measure is cost of sales, excluding DA. As
aforementioned, this non-GAAP measure does not have any
standardized meaning prescribed under IFRS, and therefore may not
be comparable to similar measures employed by other companies,
should not be considered in isolation as a substitute for measures
of performance prepared in accordance with IFRS, and is not
necessarily indicative of operating costs, operating earnings or
cash flows presented under IFRS.
AISC are computed on a weighted average basis, with the
aforementioned costs, net of by-product revenue credits from sales
of silver, being the numerator in the calculation, divided by gold
ounces sold.
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SOURCE Allied Gold Corporation