TORONTO, May 9, 2024
/PRNewswire/ - Allied Gold Corporation (TSX: AAUC) ("Allied" or the
"Company") is herein reporting its financial and operational
results for the first quarter of 2024. During the quarter, the
Company produced 85,177 gold ounces ("oz") and sold 85,136 oz at
total cost of sales, cash costs(1) and all-in sustaining
costs ("AISC")(1) per oz sold of $1,614, $1,397, and
$1,562, respectively. Importantly,
the operating trends and cash flow generation from existing
operations during the first quarter have already begun to show
clear improvements and positive momentum, including:
- Improving Production Base: Production during the first
quarter is 8.3% higher than the comparative prior period quarter of
78,616 oz, and consistent with guidance and sequencing
expectations.
- Improving Cost Profile: Despite an anticipated 8.5%
decrease in oz sold since Q4 2023, cost of sales, cash
costs(1) and AISC(1) per oz sold have all
sequentially decreased.
- Increasing Cash Flow Generation: Operating cash flows
before income tax paid and movements in working capital resulted in
a strong inflow of $38.0 million
during the first quarter, significantly exceeding the figures from
both the fourth quarter and the comparative prior period quarter,
and also surpassing planned cash flow expectations for this
period.
- Exposure to Increasing Gold Price: First quarter cash
flow was generated at an average realized gold price of
$2,053 per oz. With current spot
prices significantly exceeding this realized price, the Company has
entered into zero-cost gold collars for approximately 30% of its
production, or 10,000 oz per month, from May
2024 to March 2025, totaling
110,000 oz. These contracts, with a put of $2,200 per oz and a call of $2,829 per oz, safeguard against downside risks
in gold prices while locking in significant cash flow at prices
materially above current budget assumptions.
FIRST QUARTER HIGHLIGHTS
Financial Results – Strong Liquidity to Support Growth
Initiatives
- Net Profit before income tax for the three months ended
March 31, 2024 of $12.6 million.
- First quarter net loss(2) of $5.7 million or $0.02 per share basic and diluted.
- Adjusted first quarter net earnings(1)(2) of
$0.9 million or $0.00 per share basic and diluted, largely
reflecting adjustments for non-recurring items related to
unrealized losses on the revaluation of financial instruments and
share-based compensation.
- Operating cash flow before income tax paid and movements in
working capital was $38.0
million.
- As previously guided and disclosed, the Company continued to
make payments in the amounts accrued in prior periods in relation
to the going public transaction which is reflected as a one-time
impact to working capital. Working capital is expected to normalize
to lower levels in subsequent periods as such accrued amounts are
paid. Net cash used in operating activities in the period was
$7.9 million.
- Cash flows from operating activities are expected to materially
increase through the remainder of 2024, driven by increased
production contributions and lower costs in the second half of the
year, along with more normalized adjustments for changes to working
capital.
- Expenses are expected to continue to trend lower over the
remainder of the year, with quarter-over-quarter savings and
improvements expected, the most significant of which are expected
in the second-half of the year. As costs further decrease, and
production increases, the per ounce cost of general and
administrative expenses will decrease more than
commensurately.
- Cash and cash equivalents totaled $125.4
million as at March 31, 2024,
coming in ahead of internal forecasts. Given the current gold
price, the Company anticipates being fully financed through
existing cash flows and cash on hand. However, to reduce dependence
on the gold price, Allied is proactively pursuing several
non-dilutive financing options, including streams on producing
assets and a gold prepay facility.
Operational Results – Sustainable Production Base Set for
Improvement
Building on these positive financial and operational trends,
Allied advanced strategic integrations and enhancements across its
mining sites during the quarter. These initiatives were implemented
with the understanding that they would impact first quarter
results, but are aimed at bolstering performance and securing
long-term growth:
- Operational Integration and Enhancement at Agbaou: The
transition of mining operations at Agbaou under the same mining
contractor as at Bonikro, initiated late last year, has now been
completed. This integration is expected to realize enhanced
operational synergies in future quarters, despite the expected and
planned transition-related production impact in the first
quarter.
- Processing Improvements and Mine Sequencing at Bonikro:
Processing enhancements that required a plant shutdown in the first
quarter of 2024 have been completed, and the plant is now operating
normally with improved controls and operational performance.
Furthermore, as expected and previously guided, Bonikro's
sustaining capital and AISC(1) in the quarter were
impacted by capitalized stripping at Pushback 5. The stripping
activities carried out during the year will improve production and
costs for the next few years.
- Setting up Sadiola for Continued Success: Sadiola had a
strong first quarter and is poised for sequential and significant
production increases through the second half of 2024. This is
supported by the addition of ore from Diba, along with other
operational improvements. Diba, an oxide and higher-grade ore body,
is expected to represent a significant component of the Company's
production at Sadiola this year, replacing some of the lower-grade
fresh ore originally planned to be fed through the plant, thereby
improving both production and cost. An access road between the
plant at Sadiola and Diba has been completed and preparatory work
is ongoing. Production from Diba is expected to begin late in the
second quarter of 2024 and development work is presently on
schedule.
As previously disclosed, production is expected to be weighted
to the second half of the year with quarter over quarter variances
due to mine sequencing and accessing higher grades as per the
mining plan, along with the implementation of operational
improvements. Production is expected to sequentially increase in
the second and third quarters, with production in the fourth
quarter consistent with the third quarter, all of which aligns with
Allied's guidance of 375,000 to 405,000 ounces for 2024 at a
mine-site AISC(1) of $1,400/oz. The relative proportions of production
for the first and second half of the year, by mine and consolidated
are expected as follows:
Expected 2024
Production Split
|
First
Half
|
Second
Half
|
Sadiola
|
47 %
|
53 %
|
Bonikro
|
45 %
|
55 %
|
Agbaou
|
40 %
|
60 %
|
Consolidated
|
45 %
|
55 %
|
The production and cost guidance for 2024 remains unchanged. As
expected, production and costs in the quarter are lower in terms of
production and higher in terms of costs than subsequent quarters
with a stronger second half of year as noted above. On a
longer-term outlook, the Company continues to target production of
400,000-450,000 oz at a mine-site AISC(1) below
$1,375 per oz for 2025, and aims to
exceed 600,000 oz at a mine-site AISC(1) below
$1,225 per oz for 2026. These
projected improvements are underpinned by additional oxide ore feed
and the Phase 1 expansion at Sadiola, as well as the initiation of
production at Kurmuk in 2026. Meanwhile, annual increases in
production at Bonikro, as PB5 progresses, combined with stable
production at Agbaou, will further enhance the Company's
sustainable production platform.
Sustainability
- The Company did not report any significant Environmental
Incidents for the three months ended March
31, 2024.
- For the quarter ended March 31,
2024, the Company reported 1 Lost Time
Injury, resulting in a Lost Time Injury Rate ("LTIR") of
0.29(4).
Advancement of Key Growth Initiatives
- On September 7, 2023,
construction activities at the expanded Kurmuk Project commenced
through a two-phase development plan, bolstered by the previously
announced strategic consolidation of the minority interest,
bringing the Company's ownership to 100%(3). During its
review of the Kurmuk development plan, the Company decided to
pursue an expanded project involving an upgrade of the processing
plant's capacity from 4.4Mt/a to the confirmed design of 6.0Mt/a.
This expansion, as indicated in the 2023 Front End Engineering and
Design ("FEED"), leverages major equipment already owned by the
Company, reducing implementation risks and capital intensity. The
advancement of the Kurmuk project into the execution phase
represents a significant milestone. The project implementation
team, which boasts strong African project delivery capabilities,
began focusing on early works execution planning in the fourth
quarter of 2023, continuing through the first quarter of 2024.
Activities included implementing the staffing plan, mobilizing the
EPCM to site, advancing detailed engineering, formalizing and
executing on the procurement plan, defining and implementing all
project procedures, planning logistics, tracking key logistic
deliveries such as camp facilities, and placing orders for key
early works machinery and contracts, including the installation of
the first phase of the camp and building the construction water
dam. The construction water dam is progressing well and is
scheduled for completion in the second quarter of 2024, ahead of
the wet season. The expanded project is now expected to achieve an
average annual gold production of over 290,000 oz over the first
five years and sustain over 240,000 oz per year with
AISC(1) targeted below $950 per gold ounce, with a 10-year mine life
based solely on Mineral Reserves. As reported in the press release
titled "Allied Gold Announces Positive Exploration Results at
Kurmuk's Tsenge Gold Prospect and New Oxide Discoveries at Sadiola,
Supporting the Company's Objectives to Extend Mine Life and
Increase Production" dated April 10,
2024, the Company is advancing highly prospective targets to
significantly increase the Mineral Resources and Mineral Reserves
at Kurmuk, aligning with the Company's goal of achieving a minimum
of five million ounces of gold in mineral inventories at the
project, and pursuing a strategic mine life extending for at least
15 years at production levels in excess of 250,000 oz per annum.
The project execution requires development capital of approximately
$500 million, funded by available
cash on hand and cash flows from producing mines, with the first
gold pour expected in the second quarter of 2026.
- Production from Diba is expected to begin late in the second
quarter, with development work presently on schedule. As of
December 31, 2023, a maiden Mineral
Reserve estimate declared 6.1 million tonnes of Proven and Probable
Mineral Reserves at a grade of 1.43 g/t, containing 280,000 oz. The
Company has been actively engaging with local communities and
upgrading infrastructure, including the completion of an access
road between the Sadiola plant and Diba. Advanced grade
control drilling started in the first quarter of 2024, preparing
the site for mining. The total development costs for the Diba
Project, including the construction of the access road, are
projected at $12 million. The
anticipated additional production from Diba is expected to
significantly enhance operational efficiency and financial
performance at Sadiola, increasing revenue, lowering
AISC(1), and improving cash flows in 2024 and 2025, thus
substantially supporting the Company's growth plans.
- Over the last several years, the Company has been advancing a
strategy of optimization and expansion at Sadiola. Initial efforts
related to the stabilization of the operation, primarily in
relation to the existing processing capacity of mostly oxide ores,
although followed by a phased expansion to process fresh ores, with
the objective of increasing production and cash flows in the short
and longer terms. Present efforts have focused on increasing the
inventory of oxide and fresh ores, the latter significantly,
optimizing mining and processing, conducting several technical
studies on processing fresh ores through existing facilities to be
followed by the development of a new plant for processing fresh ore
exclusively and implementation of augments to existing facilities
to benefit the existing plant and planned new plant for processing
fresh ore. Meaningful improvements in production are targeted in
the short term as a result of the contribution from Diba high-grade
oxide ore, with the objective to support production levels between
200,000 and 230,000 ounces per year in the next two years, reduce
AISC(1), increase revenue, and provide robust cash flows
in 2024 and 2025, to support development projects across the
Company. This approach will enable the mine to continue producing
at elevated levels while incurring lower near-term capital costs.
Following this period, with the commissioning of the Phase 1
Expansion, the mine is expected to support an average production
level between 200,000 and 230,000 ounces per year through 2028, by
processing more fresh ore with higher grades and lower recoveries.
This strategy not only optimizes the use of existing Mineral
Resources but also aligns with our commitment to extend the life of
the mine and enhance its profitability. Pre-construction activities
for the Phase 1 Expansion are progressing well, with detailed
engineering, procurement, and execution planning activities
continuing through the first quarter. The updated engineering study
for this phase has reconfirmed total capital expenditure of
approximately $61.6 million and the
design to treat up to 60% of fresh rock at a rate of up to 5.7 Mt/y
in the existing process plant. Upgrades in infrastructure to
prepare the site for the next phase of investment will also be
advanced in this period. The Phase 2 Expansion, planned as a new
processing plant to be built beginning in late 2026 and dedicated
to processing fresh rock and oxides at a rate of up to 10Mt per
year, starting in 2029, is expected to increase production to an
average of 400,000 ounces per year for the first 4 years and
300,000 ounces per year on average for the mine's 19-year life,
with AISC(1) expected to decrease to below $1,000 per gold ounce. Capital expenditures for
this phase are estimated to be approximately $400 million inclusive of infrastructure
upgrades. While the investment in the Sadiola Project is delineated
in phases for planning purposes, it is critical to recognize that
these phases are part of an integrated development effort, aimed to
significantly increase Sadiola's production, enhance its
profitability and longevity, and reaffirm the commitment to the
Company's stakeholders as demonstrated by the over $127 million invested in Sadiola to date, which
has allowed for a material increase in production and Mineral
Reserves and advance the project to the execution phase, the
planned expenditure of $100 million
between 2024 and 2025, and over $350
million expected to be spent from 2026 to 2029 by which time
both the modified existing plant and new plant will be commissioned
and functioning. The Company is also advancing opportunities for
optimization of the project, including metallurgical test work and
a pre-feasibility study to potentially increase recoveries by over
10% through the use of flotation and concentrate leaching. This
study, supported by the Company's phased investment, seeks to
improve the project's financial performance significantly. With
this long-term and value-focused strategy, the Company is
well-positioned to affirm that the advancement of the Sadiola
Project is proceeding as planned, reinforcing Allied's commitment
to operational excellence and long-term value creation.
Financial Flexibility
The Company's ability to deliver on this positive outlook and to
unlock the significant value in its large and expanding mineral
inventory is supported by the financial flexibility needed to
internally fund these optimization and growth initiatives. To
further enhance the Company's financial flexibility as these
initiatives progress, Allied is actively executing a select number
of non-dilutive alternatives including 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 its Côte d'Ivoire assets. The proceeds, which are
expected to incur a competitive cost of capital based on Proven
& Probable Mineral Reserves and remain competitive when
assuming Mineral Resource conversion, will bolster and ensure
self-funding for Allied's extensive exploration and optimization
program in Côte d'Ivoire where $16.5
million is allocated for 2024 to advance highly prospective
sites such as Oume, located north of the Bonikro mill, as well as
Akissi-So, Agbalé and other targets. The stream proceeds will
enable strategic enhancements distinct from the current life of
mine plans, designed to incrementally advance asset value without
diminishing shareholder equity and unlock upside that otherwise
would not be readily funded in the short term as the Company
pursues the advancement of Kurmuk and Sadiola projects. Given the
competitive cost of capital, Allied is also exploring 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.
With an established and growing sustainable production platform,
a significant mineral inventory with highly prospective exploration
targets and the financial flexibility to deliver on its long-term
vision, Allied is set to become Africa's next senior gold producer.
OPERATING RESULTS SUMMARY
|
For three months
ended March 31,
|
|
2024
|
2023
|
Gold
ounces
|
|
|
Production
|
85,177
|
78,616
|
Sales
|
85,136
|
83,475
|
Per Gold Ounce
Sold
|
|
|
Total Cost of
Sales(4)
|
$
1,614
|
$
1,582
|
Cash
Costs(1)
|
$
1,397
|
$
1,436
|
AISC(1)
|
$
1,562
|
$
1,548
|
|
|
|
Average revenue per
ounce
|
$
2,053
|
$
1,846
|
Average market price
per ounce*
|
$
2,071
|
$
1,892
|
*Average market prices
based on the LMBA PM Fix Price
|
Sadiola
For the three months ended March 31,
2024, Sadiola had a strong quarter and fully met
expectations with production of 48,330 ounces compared to 40,533
ounces in the comparative prior year period, representing an
increase of 19%. Initiatives undertaken at the end of the fourth
quarter, predominantly focused on crushing and screening, continued
throughout the quarter and were successfully implemented. Results
were also positively impacted by the higher feed grade. Diba
continues to progress on plan, and is expected to deliver its first
production later in the second quarter.
Expected cost reductions are to be achieved through the further
inclusion of oxide ore from Diba and the sequential increases
in production over the remaining quarters of the year.
Since acquiring the Sadiola Project in 2021, Allied has
identified over 15 million tonnes of economic oxide mineralization
within the near-mine footprint, significantly enhancing the oxide
Mineral Resource base critical for the existing and planned
processing infrastructure. Ongoing exploration activities
at Diba, Sekekoto West, FE4, and Tambali South are crucial to
Allied's strategy to leverage the existing Mineral Resources and
infrastructure to maximize production and cash flows in the short
term.
During the quarter, exploratory and Mineral Resource drilling
programs were conducted on the Sadiola and Diba mining licenses. A
total of 185 holes were drilled for 19,273 meters by 5 drill rigs,
with 106 holes for 14,565 meters completed at Sadiola and 79 holes
for 4,708 meters completed at Diba. Mineral Resource drilling
programs were ongoing at Tambali Pit, S12 prospect, Sekekoto West,
and FE2.5 prospects, and at Diba where infill drilling on the
historical Mineral Resource area was in progress. Infill drilling
at approximately 25-meter spacing on the Diba Mineral Reserve was
undertaken by two exploration rigs during the quarter to improve
the definition for oxide mining planned in the second quarter.
Core drilling to test the resource potential beneath the Tambali
oxide pits was completed. The program aims to define a larger
Inferred Mineral Resource for further definition infill in 2024,
with a decision on potential mining and subsequent backfilling of
the void from the Sadiola Main sulphide mine waste anticipated.
Results for all drillholes were returned, including positive
results from a hole drilled under the southern end of the Tambali
oxide pit in fresh rock, hosted in pyrite-arsenopyrite mineralized
psammopelite. This illustrates the opportunity to develop a
secondary sulphide Mineral Resource at Tambali that can
contribute to the longer-term life of mine planning for the Sadiola
sulphide project outside of the Sadiola Main deposit, offering an
alternative mining area.
At Sekokoto West, Allied provided updates regarding progress in
the April 10, 2024 press release,
"Allied Gold announces positive exploration results at Kurmuk's
Tsenge gold prospect and new oxide discoveries at Sadiola,
supporting the Company's objectives to extend mine life and
increase production", noting the following highlights:
- New Near-Mine Oxide Discovery at Sekekoto West: Drilling at
Sekekoto West has uncovered a new oxide deposit, set to contribute
additional feed to the Sadiola plant. This deposit, located 2 km
south of the Sadiola Processing Plant, underscores the ongoing
potential for Mineral Resource expansion within the mining license
and covers a zone that has been historically underexplored,
presenting significant new opportunities for resource growth over
approximately 2 km of strike. Recent drilling has extended the
known mineralisation by an additional 100m to the north, with plans to test further
northward extensions by another 300m
in Q2, aiming to uncover potential linkages and oxide
mineralisation towards the FE3S rock storage facilities.
- Strategic Corridor between Sekekoto and S12: The discovered
corridor linking Sekekoto to the high-grade S12 prospect represents
a promising target for further oxide ore discoveries. This corridor
holds the potential to continue adding incremental higher-grade,
lower-cost oxide ore feed to the Sadiola mill, ensuring enhanced
throughput and efficiency, especially during Sadiola's expansion.
Allied's current exploration model indicates the potential for
uncovering significant mineralisation between these two areas and
in other prospective areas across the Sadiola land package. This
model is actively being tested, and could substantially increase
oxide gold ounces available for extraction. Exploration results to
date continue to corroborate the Company's exploration model for
Sadiola.
Bonikro
For the three months ended March 31,
2024, Bonikro produced 18,631 ounces compared to 20,038
ounces in the comparative prior period. Following a detailed
capability assessment, conducted at the end of the prior year,
certain improvements and process adjustments were identified and
planned for 2024. A short stoppage on the processing plant was
carried out, allowing the Company to undertake adjustments of
certain areas of the flow circuit, as well as to improve management
matters. The plant throughput variability reduced significantly
after these improvements were completed, and processing performance
has now been fully stabilized. The planned implementation of the
aforementioned adjustments resulted in lower throughput was
partially offset by higher feed grades and recovery rates. Despite
recent improvements, several other opportunities to optimize the
plant further are being pursued, including, but not limited to
improved operational and maintenance practices, comminution circuit
optimizations, increased gravity gold recovery, better slurry
density, and viscosity controls.
Consistent positive mining performance has ensured mining
sequencing remained on plan.
At Bonikro, expected cost reductions are to be achieved through
the normalization of production after the aforementioned short
processing plant stoppage to implement certain improvements and
process adjustments. However, as expected and guided, Bonikro's
sustaining capital and AISC(1) in the quarter were
impacted by capitalized stripping at Pushback 5. The stripping
activities being carried out during the year will improve
production and costs for the next few years, as high grade ore will
be exposed while significantly lower waste removal is planned. The
classification of stripping costs to sustaining capital was changed
in the fourth quarter of 2023, with first production from the
pushback achieved in that quarter. Prior year comparative costs
associated with PB5, which did not have any ore production in the
first quarter of 2023, were deemed as expansionary capital and
consequently did not impact AISC(1). Further, the
increase in depreciation and amortization from the comparative
prior quarter is related to amortization of the PB5 expansionary
deferred stripping, which commenced in the fourth quarter of
2023.
Gold sales were slightly higher than production, due to timing
of sales.
During the quarter, extensive Mineral Resource and exploration
drilling activities were conducted across the Company's mining
licenses ("ML") and exploration licenses ("EL"). Drilling covered
130 holes, totalling 13,952 metres.
At the Hire mine, core drilling to the WSW of the Agbale
prospect, which is expected to be processed at Agbaou, continued
beneath and adjacent to the Akissi-So waste rock facility. These
areas, historically drilled, yielded intersections of high-grade
mineralization associated with a 1 to 2 meter
quartz-carbonate-sulphide-gold vein. Allied drilled this vein on a
40 meter sectional basis, confirming a strike of 360 meters,
potentially representing an underground target. Further work is
needed to advance this target.
At Oume, drilling at the Dougbafla West and North deposits aimed
to convert Inferred Mineral Resources to Indicated Mineral
Resources, with a focus on the oxide portion of the Mineral
Resource at Dougbafla West. Further drilling will test the strike
extent to the north and south, and infill drilling is intended to
enhance Indicated category Mineral Resources.
Agbaou
For the three months ended March 31,
2024 Agbaou produced 18,216 ounces compared to 18,045 ounces
in the comparative prior period. First quarter performance was
strong, despite the transition to a new mining contractor, which is
now complete. The oxide blend ratio feed at the Agbaou plant was
enhanced by continued production from Agbale, which has
consistently met grade expectations and provided significant
flexibility during the first quarter.
At Agbaou, expected cost reductions are to be achieved mainly
through the increase of production in subsequent quarters after the
aforementioned contractor changeover, as well as mining and process
optimizations.
Gold sales for the three months ended March 31, 2024 were in line with production, with
small differences attributable to timing.
During the quarter, extensive resource and exploration drilling
activities were undertaken on Agbaou's mining licenses, with 33
holes for a total of 4,320 metres.
At quarter end, resource drilling at South Sat 3 pit was
underway to test Inferred blocks below the US$1,800 pit optimisation. Preparation and
compensation of drill lines was also underway for drilling at the
Agbaou South prospect located 5 kilometres south of the Agbaou
processing plant.
Progress at Kurmuk
During the fourth quarter of 2023, FEED for the project's
critical components was successfully completed on schedule. The key
outcomes of the 2023 FEED include:
- A projected ten-year mine life based on the currently defined
2.7 million ounces in Proven and Probable Mineral Reserves, with an
anticipated production of 290,000 ounces per year in the first five
years and a life-of-mine AISC(1) of $950 per ounce.
- A mining plan utilizing conventional open pit mining techniques
with internationally recognized mining contractors and a robust
process design using proven technologies.
- An increase in plant throughput from 4.4 Mt per year in the
2022 Definitive Feasibility Study to 6.0 Mt per year in the 2023
FEED, representing a 38% increase.
- Estimated pre-production costs of approximately $500 million.
- Anticipated first production in the first half of 2026.
The project implementation team, which boasts strong African
project delivery capabilities, began focusing on early works
execution planning in the fourth quarter of 2023, continuing
through the first quarter of 2024. Activities included implementing
the staffing plan, mobilizing the EPCM early works team to the
site, advancing detailed engineering, formalizing the procurement
plan, defining and implementing all project procedures, planning
logistics, tracking key logistic deliveries such as camp
facilities, and placing orders for key early works contracts,
including the installation of the starter camp and the construction
of the temporary water dam. The construction of the temporary water
dam is progressing well and is scheduled for completion in the
second quarter of 2024, ahead of the wet season. Additionally,
sufficient accommodations were built during the first quarter of
2024 to facilitate the initiation of starter camp construction in
the upcoming reporting period.
Of the total capital allocated for project development,
$155.0 million is allocated for 2024
for the initial capital commitment and continuing through mid-2026
for the balance of the required capital.
During the first quarter, Mineral Resource drilling focused on a
scout drilling exercise at the Tsenge prospect, with a total
of 7 holes for 2,277 meters drilled. By quarter's end, the program
was 10% complete with 11 of 104 planned holes executed.
The balance of assays from the fourth quarter of 2023 infill
drilling at Dish Mountain was received. Infill drilling in this
area is planned for the third and fourth quarters of 2024. Notable
drillhole highlights from the southern area of Black Dog Hill at
Dish Mountain included significant intersections 70 meters below
the base of the $1,500 per oz pit
optimization, suggesting potential to deepen and expand the pit
optimizations with further drilling.
Mapping, channel sampling, and core drilling continued at
Tsenge, showing promising results. The channel sampling campaign
started with two channels, TSCH001 and TSCH002, sampled along drill
access roads in the southern Setota area. These efforts revealed
significant intersections, encompassing both the gold-mineralized
lower-grade sulphide disseminated shear zone and higher gold grades
in the extensional quartz-carbonate arrays at the surface. These
findings were further underscored by the details shared in the
April 10, 2024 press release titled,
"Allied Gold announces positive exploration results at Kurmuk's
Tsenge gold prospect and new oxide discoveries at Sadiola,
supporting the Company's objectives to extend mine life and
increase production", highlighting the following:
- Extended Mineralisation at Tsenge Ridge: Ongoing exploration
has revealed significant gold mineralisation along a 9-kilometre
strike length, validated through soil sampling, geological mapping,
and scout drilling. The Tsenge area, one of four prioritized areas
for Mineral Resource expansion, continues to demonstrate prolific
geological potential.
- High Economic Potential: Initial drill results and channel
sampling have indicated economic thicknesses and grades of gold
mineralisation in hard rock both at the surface and at least up to
200 metres vertically below the outcrops
- Confirming High-Grade Sources: These findings verify that the
gold-in-soil anomalies originate from significant gold grades
exceeding 1.0 g/t gold in rock samples, aligning with the
successful exploration outcomes at Dish Mountain and Ashashire—the
two initial open pits that encompass all current Mineral Reserves.
Exploration of high-priority targets has yielded exceptional
results to date, including a 24-metre intercept with a grade of
over 3 g/t gold near the surface.
These exploration successes at Tsenge not only support the
potential for expanding the mineral inventory at this target but
also across the entire Kurmuk Project, where other similar targets
and anomalies have been identified. Allied is applying the same
proven and efficient exploration model to these areas, to underpin
an expanded, long-term production outlook based on an expanded
mineral inventory. This strategy aims to enhance Kurmuk's existing
Mineral Reserves and Mineral Resources, supporting a strategic mine
life of over 18 years with annual gold production exceeding 250,000
ounces at an AISC(1) below $950 per ounce. Ultimately, this approach
enhances the overall asset base of the Company, aligning closely
with the strategic goal of creating long-lasting value for its
stakeholders and advancing towards Allied's target of achieving a
minimum of five million ounces of gold in mineral inventories at
the Kurmuk Project.
For three months
ended
March 31,
2024
|
Production Gold
Ounces
|
Sales Gold
Ounces
|
Cost of Sales
Per
Gold Ounce Sold
|
Cash
Cost(1) Per
Gold Ounce Sold
|
AISC(1) Per Gold
Ounce Sold
|
Sadiola Gold
Mine
|
48,330
|
44,868
|
$
1,263
|
$
1,172
|
$
1,240
|
Bonikro Gold
Mine
|
18,631
|
21,304
|
$
1,880
|
$
1,405
|
$
1,737
|
Agbaou Gold
Mine
|
18,216
|
18,964
|
$
2,146
|
$
1,919
|
$
2,125
|
Total
|
85,177
|
85,136
|
$
1,614
|
$
1,397
|
$
1,562
|
FINANCIAL SUMMARY AND KEY STATISTICS
Key financial operating statistics for the first quarter 2024
are outlined in the following tables.
(In thousands of US
Dollars, except for shares and per share amounts)
(Unaudited)
|
For three months
ended March 31,
|
2024
|
2023
|
Revenue
|
$
175,067
|
$
154,320
|
Cost of sales,
excluding depreciation and amortization
|
(123,313)
|
(122,891)
|
Gross profit
excluding depreciation and amortization(1)
|
$
51,754
|
$
31,429
|
Depreciation and
amortization
|
(14,135)
|
(9,139)
|
Gross
profit
|
$
37,619
|
$
22,290
|
General and
administrative expenses
|
$
(14,161)
|
$
(10,625)
|
Gain (loss) on
revaluation of call and put options
|
—
|
(10,000)
|
Loss on revaluation of
financial instruments and embedded derivatives
|
(1,783)
|
(1,146)
|
Impairment of
exploration and evaluation asset
|
—
|
—
|
Revaluation of
provision for reclamation and closure costs
|
—
|
—
|
Other (losses)
income
|
(3,415)
|
45
|
Net earnings before
finance costs and income tax
|
$
18,260
|
$
564
|
Finance
costs
|
(5,637)
|
(5,939)
|
Net earnings (loss)
before income tax
|
12,623
|
(5,375)
|
Current income tax
expense
|
$
(8,486)
|
$
(7,917)
|
Deferred income tax
expense
|
(4,979)
|
(6,069)
|
Net loss and total
comprehensive loss for the period
|
$
(842)
|
$
(19,361)
|
|
|
|
(Loss) earnings and
total comprehensive (loss) earnings attributable to:
|
|
|
Shareholders of the
Company
|
$
(5,685)
|
$
(20,433)
|
Non-controlling
interests
|
4,843
|
1,072
|
Net loss and total
comprehensive loss for the period
|
$
(842)
|
$
(19,361)
|
|
|
|
Net loss per share
attributable to shareholders of the Company
|
|
|
Basic and
Diluted
|
$
(0.02)
|
$
(0.11)
|
(In thousands of US
Dollars, except per share amounts)
|
For three months
ended March 31,
|
2024
|
2023
|
Net Loss
attributable to Shareholders of the Company
|
$
(5,685)
|
$
(20,433)
|
Net Loss
attributable to Shareholders of the Company per
Share
|
$
(0.02)
|
$
(0.11)
|
Transaction related
costs
|
$
—
|
$
—
|
(Gain) loss on
revaluation of call and put options
|
—
|
10,000
|
Loss on revaluation of
financial instrument
|
1,783
|
1,146
|
Impairment of
exploration and evaluation asset
|
—
|
—
|
Foreign
exchange
|
264
|
209
|
Share-based
compensation
|
2,127
|
1,214
|
Other
adjustments
|
2,082
|
(1,798)
|
Tax
adjustments
|
354
|
—
|
Total increase to
Attributable Net Earnings (Loss)(2)
|
$
6,610
|
$
10,771
|
Total increase to
Attributable Net Earnings (Loss)(2) per share
|
$
0.03
|
$
0.06
|
Adjusted Net
Earnings (Loss)(1)
|
$
925
|
$
(9,662)
|
Adjusted Net
Earnings (Loss)(1) per
Share
|
$
—
|
$
(0.05)
|
First Quarter 2024 Conference Call
The Company will host a conference call and webcast on Friday,
May 10, 2024 at 8:30 a.m.
EST.
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. EST on May 10,
2024, until 11:59 p.m. EST on
June 9, 2024.
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.
|
(2)
|
Net earnings and
adjustments to net earnings represent amounts attributable to
Allied Gold Corporate equity holders.
|
(3)
|
The Government of
Ethiopia is entitled to a 7% equity participation in Kurmuk once
the mine enters commercial production and upon completion of
certain commitments such as public road upgrades and the
installation of a power line.
|
(4)
|
Calculated on a
1,000,000 exposure-hour basis.
|
NON-GAAP FINANCIAL PERFORMANCE MEASURES
The Company has included certain non-GAAP financial performance
measures to supplement its Condensed Consolidated Interim Financial
Statements, which are presented in accordance with IFRS, including
the following:
- Cash costs per gold ounce sold;
- AISC per gold ounce sold;
- Gross profit excluding Depreciation and Amortization;
- Sustaining, Expansionary and Exploration Capital Expenditures;
and
- Adjusted Net Earnings (Loss) and Adjusted Net Earnings (Loss)
per share
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, including cash costs
and AISC, 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 intend to provide additional information, and should not
be considered in isolation 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 described 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. This data is furnished to provide additional
information and is a non-GAAP financial performance measure.
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. 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.
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 excludes
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. 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.
The following tables provide detailed reconciliations from total
costs of sales to cash costs(1) and AISC(1).
Subtotals and per unit measures may not calculate based on amounts
presented in the following tables due to rounding.
(In thousands of US
Dollars, unless otherwise noted)
|
For three months
ended March 31, 2024
|
For three months
ended March 31, 2023
|
Bonikro
|
Agbaou
|
Sadiola
|
Total
|
Bonikro
|
Agbaou
|
Sadiola
|
Total
|
Cost of Sales,
excluding DA
|
$
30,221
|
$
38,364
|
$
54,728
|
$
123,313
|
$
26,882
|
$
35,954
|
$
60,055
|
$
122,891
|
DA
|
9,839
|
2,334
|
1,962
|
14,135
|
6,814
|
865
|
1,460
|
9,139
|
Cost of
Sales
|
$
40,060
|
$
40,698
|
$
56,690
|
$
137,448
|
$
33,696
|
$
36,819
|
$
61,515
|
$
132,030
|
Cash Cost
Adjustments
|
|
|
|
|
|
|
|
|
DA
|
$
(9,839)
|
$
(2,334)
|
$
(1,962)
|
$
(14,135)
|
$ (6,814)
|
$
(865)
|
$ (1,460)
|
$ (9,139)
|
Exploration
Expenses
|
(174)
|
(2,617)
|
(2,039)
|
(4,830)
|
(170)
|
(1,799)
|
(1,650)
|
(3,619)
|
Agbaou Contingent
Consideration
|
—
|
683
|
—
|
683
|
—
|
798
|
—
|
798
|
Silver by-Product
credit
|
(114)
|
(44)
|
(100)
|
(258)
|
(106)
|
(42)
|
(64)
|
(212)
|
Total Cash
Costs(1)
|
$
29,933
|
$
36,386
|
$
52,589
|
$
118,908
|
$
26,606
|
$
34,911
|
$
58,341
|
$
119,858
|
|
|
|
|
|
|
|
|
|
AISC(1) Adjustments to Total Cash
Costs(1) noted
above
|
|
|
|
|
|
|
|
|
Reclamation &
Remediation Accretion
|
$
218
|
$
318
|
$
560
|
$
1,096
|
$
172
|
$
241
|
$
453
|
$
866
|
Exploration
Capital
|
1,650
|
—
|
—
|
1,650
|
768
|
—
|
141
|
909
|
Exploration
Expenses
|
174
|
2,617
|
2,039
|
4,830
|
170
|
1,799
|
1,650
|
3,619
|
Sustaining Capital
Expenditures
|
5,026
|
946
|
470
|
6,442
|
1,405
|
1,062
|
1,456
|
3,923
|
IFRS 16 Lease
Adjustments
|
—
|
26
|
—
|
26
|
—
|
28
|
—
|
28
|
Total
AISC(1)
|
$
37,001
|
$
40,293
|
$
55,658
|
$
132,952
|
$
29,121
|
$
38,041
|
$
62,041
|
$
129,203
|
|
|
|
|
|
|
|
|
|
Gold Ounces
Sold
|
21,304
|
18,964
|
44,868
|
85,136
|
22,597
|
18,367
|
42,511
|
83,475
|
|
|
|
|
|
|
|
|
|
Cost of Sales per Gold
Ounce Sold
|
$
1,880
|
$
2,146
|
$
1,263
|
$
1,614
|
$ 1,491
|
$ 2,005
|
$ 1,447
|
$ 1,582
|
Cash Cost(1)
per Gold Ounce Sold
|
$
1,405
|
$
1,919
|
$
1,172
|
$
1,397
|
$ 1,177
|
$ 1,901
|
$ 1,372
|
$ 1,436
|
AISC(1) per
Gold Ounce Sold
|
$
1,737
|
$
2,125
|
$
1,240
|
$
1,562
|
$ 1,289
|
$ 2,071
|
$ 1,459
|
$ 1,548
|
GROSS PROFIT EXCLUDING DEPRECIATION AND
AMORTIZATION
The Company uses the financial measure "Gross Profit excluding
Depreciation and Amortization" to supplement information in its
financial statements. The Company believes that in addition to
conventional measures prepared in accordance with IFRS, the Company
and certain investors and analysts use this information to evaluate
the Company's performance.
Gross profit excluding Depreciation and Amortization is
calculated as Gross Profit plus Depreciation and Amortization.
The Company discloses Gross Profit excluding Depreciation and
Amortization because it understands that certain investors use this
information to determine the Company's ability to generate earnings
and cash flows. 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 Gross
Profit. 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.
The reconciliation of Gross Profit to Gross Profit Excluding
Depreciation and Amortization can be found on page 9 of
this press release and in Section 1: Highlights and Relevant
Updates of the Company's MD&A, under the Summary of Financial
Results and Section 4: Review of Operations and Mine Performance,
for the relevant mines.
ADJUSTED NET EARNINGS (LOSS) AND ADJUSTED NET EARNINGS (LOSS)
PER SHARE
The Company uses the financial measures "Adjusted Net Earnings
(Loss)" and the non-GAAP ratio "Adjusted Net Earnings (Loss) per
share" to supplement information in its financial statements. The
Company believes that in addition to conventional measures prepared
in accordance with IFRS, the Company and certain investors and
analysts use this information to evaluate the Company's
performance.
Adjusted Net Earnings (Loss) and Adjusted Net Earnings (Loss)
per share are calculated as Net Earnings (Loss) attributable to
Shareholders of the Company, excluding non-recurring items, items
not related to a particular periods and/or not directly related to
the core mining business such as the following, with notation of
Gains (Losses) as they would show up on the financial
statements.
- Gains (losses) related to the reverse takeover transaction
events and other items,
- Gains (losses) on the revaluation of historical call and put
options,
- Unrealized Gains (losses) on financial instruments and embedded
derivatives,
- Write-offs (reversals) on mineral interest, exploration and
evaluation and other assets,
- Gains (losses) on sale of assets,
- Unrealized foreign exchange gains (losses),
- Share-based (expense) and other share-based compensation,
- Unrealized foreign exchange gains (losses) related to
revaluation of deferred income tax asset and liability on
non-monetary items,
- Deferred income tax recovery (expense) on the translation of
foreign currency inter-corporate debt,
- One-time tax adjustments to historical deferred income tax
balances relating to changes in enacted tax rates,
- Non-recurring provisions,
- Any other non-recurring adjustments and the tax impact of any
of these adjustments calculated at the statutory effective rate for
the same jurisdiction as the adjustment.
Non-recurring adjustments from unusual events or circumstances
are reviewed from time to time based on materiality and the nature
of the event or circumstance.
Management uses these measures for internal valuation of the
core mining performance for the period and to assist with planning
and forecasting of future operations. Management believes that the
presentation of Adjusted Net Earnings (Loss) and Adjusted Net
Earnings (Loss) per share provide useful information to investors
because they exclude non-recurring items, items not related to or
not indicative of current or future periods' results and/or not
directly related to the core mining business and are a better
indication of the Company's profitability from operations as
evaluated by internal management and the board of directors. The
items excluded from the computation of Adjusted Net Earnings (Loss)
and Adjusted Net Earnings (Loss) per share, which are otherwise
included in the determination of Net Earnings (Loss) and Net
Earnings (Loss) per share prepared in accordance with IFRS, are
items that the Company does not consider to be meaningful in
evaluating the Company's past financial performance or the future
prospects and may hinder a comparison of its period-to-period
profitability.
The most directly comparable IFRS measure is Net Earnings
(Loss). 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.
The reconciliation of Net Loss to attributable to Shareholders
of the Company to Adjusted Net Earnings (Loss) can be found on
pages 9 and 10 of this press release and in Section 1:
Highlights and Relevant Updates of the Company's MD&A, under
the Summary of Financial Results.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
INFORMATION
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 expectation 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; and
- the Company's expectations regarding the payment of any future
dividends.
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 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.
NOTES ON MINERAL RESERVES AND MINERAL RESOURCES
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/ounce 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 National Instrument 43-101
Standards of Disclosure for Mineral Projects ("NI 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 cut-off grades
and pit shells were based on a $1,500/ounce gold price, except for the Agbalé
pit, which was based on a $1,800/ounce 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, 10.11% 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 and certain governmental commitments such as public road
upgrades and installation of a power line are complete.
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:
Qualified Person of
Mineral Reserves
|
Qualified Person of
Mineral Resources
|
John Cooke of Allied
Gold Corporation
|
Steve Craig of Orelogy
Consulting Pty Ltd.
|
Mineral Reserves (Proven and Probable)
The following table sets forth the Mineral Reserve estimates for
the Company's mineral properties at December
31, 2023.
|
Proven Mineral
Reserves
|
Probable Mineral
Reserves
|
Total Mineral
Reserves
|
|
Tonnes
(kt)
|
Grade
(g/t)
|
Content
(k ounces)
|
Tonnes
(kt)
|
Grade
(g/t)
|
Content
(k ounces)
|
Tonnes
(kt)
|
Grade
(g/t)
|
Content
(k ounces)
|
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$1500/oz
was used for the pit optimization, with the selected pit shells
using values of US$1320/oz (revenue
factor 0.88) for Sadiola Main and US$1500/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$1500/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$1500/oz
was used for the pit optimization, with the selected pit shells
using values of US$1320/oz (revenue
factor 0.88) for Ashashire and US$1440/oz (revenue factor 0.96) for Dish
Mountain.
- The cut-off grades used for Mineral Reserves reporting were
informed by a US$1500/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 $1500/oz was
used for the Mineral Reserves for the Bonikro pit:
- With the selected pit shell using a value of $1388/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 $1800/oz was
used for the Mineral Reserves for the Agbalé pit:
- With the selected pit shell using a value of US$1800/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 $1500/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 $1800/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 (Measured, Indicated, Inferred)
The following table set forth the Measured and Indicated Mineral
Resource estimates (inclusive of Mineral Reserves) and for the
Company's mineral properties at December 31,
2023.
|
Measured Mineral
Resources
|
Indicated Mineral
Resources
|
Total Measured
and Indicated
|
|
Tonnes
(kt)
|
Grade
(g/t)
|
Content
(k ounces)
|
Tonnes
(kt)
|
Grade
(g/t)
|
Content
(k ounces)
|
Tonnes
(kt)
|
Grade
(g/t)
|
Content
(k ounces)
|
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
|
57,911
|
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 (M&I)
|
49,804
|
1.30
|
2,081
|
280,315
|
1.55
|
13,945
|
330,118
|
1.51
|
16,027
|
The following table set forth the Inferred Mineral Resource
estimates and for the Company's mineral properties at December 31, 2023.
|
Inferred Mineral
Resources
|
|
Tonnes
(kt)
|
Grade
(g/t)
|
Content
(k ounces)
|
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 (Inferred)
|
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$1800/oz pit shell and depleted to
31 December 2023.
- Rounding of numbers may lead to discrepancies when summing
columns.
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SOURCE Allied Gold Corporation