Allied Gold Partners with UAE Fund, Secures $500 Million for Expansion Plans
Allied Gold (TSX: AAUC) has secured a strategic partnership with UAE-based Ambrosia Investment Holding, acquiring $500 million in funds for its mining expansion in Africa. Ambrosia will purchase half of Allied’s Mali assets and a 12% equity stake, bolstering production at Sadiola and advancing the Kurmuk project in Ethiopia. This partnership exemplifies UAE’s growing investment in African initiatives and Allied’s aim for a NYSE listing.
Allied Gold (TSX: AAUC) has announced a strategic partnership with a UAE-based investment group to bolster its mining operations in Africa. Ambrosia Investment Holding, the newly formed investment fund, aims to provide regional expertise and market support, as the UAE has become a significant backer of African businesses, investing over $110 billion since 2019.
As part of the agreement, Ambrosia will acquire half of Allied’s gold mining assets in Mali for $375 million, including an 80% stake in the Sadiola mine. Initially, $145 million will be paid upon closing, with an additional $230 million to follow. The partnership will lead to the establishment of a 50/50 joint venture on these Malian assets.
Furthermore, Ambrosia will purchase a 12% equity stake in Allied Gold for C$156.6 million to aid in the expansion of Sadiola, wherein 46 million shares will be acquired at a discount of C$3.40 per share. Following the announcement, Allied’s shares traded at C$4.41, resulting in a market capitalization of C$1.45 billion.
Peter Marrone, Allied’s chairman and CEO, remarked on the transaction’s uniqueness, highlighting the collaboration between a Canadian firm and Emirati entrepreneurs investing in Mali. The partnership underscores the growing international investment in African mining operations.
Allied Gold anticipates that this $500 million transaction will strengthen its financial flexibility to pursue growth, particularly in expanding Sadiola and developing the Kurmuk project in Ethiopia. The phased expansion at Sadiola aims to boost production from 170,000 ounces in 2023 to up to 230,000 ounces annually by implementing strategic enhancements.
The second expansion is projected to propel production levels up to 400,000 ounces annually within four years, backed by mineral reserves of 7.2 million ounces. Costs for both expansions have been estimated at $65 million and $400 million, respectively.
Allied’s partnership with Ambrosia will also introduce a photovoltaic power generation system at Sadiola, enhancing both cost efficiency and the environmental footprint as part of a 12-year supply agreement with ATGC.
The Kurmuk project is expected to achieve production status by mid-2026, targeting approximately 290,000 ounces annually during its initial four years. The project holds mineral reserves of 2.7 million ounces with an anticipated mine life exceeding 15 years.
In addition to this partnership, Allied Gold is seeking to list on the New York Stock Exchange, having commenced its application process. CEO Marrone mentioned that the company meets the necessary criteria for a NYSE listing and expects a decision in the first half of the year, emphasizing the prestige associated with trading on this platform.
In summary, Allied Gold’s strategic partnership with Ambrosia Investment Holding marks a significant step towards enhancing its mining operations and financial flexibility. With the investment totaling $500 million, Allied is positioned to expand its production capabilities in both Mali and Ethiopia. The collaboration reflects a growing trend of international investment in Africa’s mining sector, while Allied’s application for a NYSE listing further indicates its ambitions for growth and prominence in the market.
Original Source: www.mining.com
