#Canada #Toronto #Wheaton Precious Metals #Allied Gold #Kurmuk Project

Allied Gold Secures Financial Milestone in Kurmuk Project

Allied Gold Corporation, listed on both the Toronto Stock Exchange (TSX: AAUC) and OTCQX (AAUCF), has made significant strides in its Kurmuk project following a recent announcement about the receipt of the first construction payment linked to its streaming agreement with Wheaton Precious Metals International Ltd. This payment is part of a broader $175 million agreement aimed at propelling the development of the Kurmuk gold mining initiative located in Ethiopia.

First Payment Overview

The initial payment of $43.75 million marks a critical step in Allied's financial strategy. This amount was made available after meeting customary conditions laid down in the Kurmuk stream agreement, paving the way for upcoming financial commitments crucial for the ongoing project construction. Allied officials expressed satisfaction at the progress and look forward to the remaining three scheduled payments, which cumulatively will support the project’s extensive development plans.

In a complementary financing effort, Allied Gold announced an additional $75 million through a gold prepaid forward arrangement with select lenders, including notable institutions like National Bank of Canada, Macquarie Bank Limited, and Citibank, N.A. Under this agreement, the lenders will purchase approximately 2,802 ounces of gold monthly over a twelve-month period starting in October 2026. Notably, this arrangement aims to reduce capital costs while ensuring robust cash flows as the project advances.

The Kurmuk Project: Strategic Insights

The Kurmuk project is strategically located in the mineral-rich region of western Ethiopia, within the Arabian-Nubian Shield, roughly 500 kilometers from the capital, Addis Ababa. Allied Gold's plans for this project are ambitious yet grounded in feasible production targets, aiming for an initial output of 270,000 ounces of gold within the first five years. The anticipated average annual production over its lifespan is projected at 240,000 ounces, with a competitive all-in sustaining cost of below $1,000 per ounce.

The company’s optimistic projections are backed by proven and probable mineral reserves estimated at 2.7 million ounces, with the mine life projected to exceed 15 years, significantly bolstered by ongoing exploration initiatives. Currently, the Kurmuk project is near full permitting and construction, with a timeline set for commencing gold production in the second quarter of 2026. The site is designed for a milling capacity of 6 million tons per annum (Mtpa), highlighting its substantial operational potential.

Operational Status and Future Plans

Construction activities are reportedly on track and within budget, featuring significant progress in earthworks, camp construction, and engineering procurement. The mining operation, envisioned as conventional open-pit mining employing shovel-truck methods, is set to commence at two initial site locations: Dish Mountain and Ashashire. Additionally, allied's processing design involves a conventional carbon-in-leach (CIL) circuit, expecting recovery rates averaging around 92% throughout the mine’s functional life.

Allied Gold is also negotiating to secure stable power supplies from the Ethiopian grid with a power purchase agreement established for ten years, which aligns with the company's objective of efficient and cost-effective production practices.

The financial and operational developments signal a positive future for Allied Gold as it continues to push forward with aggressive exploration, budgeting $7.5 million for programs in 2024. Current explorations target known mineral resource extensions near the designated open pits and include exciting regional prospects such as the newly discovered Tsenge area.

In summary, Allied Gold, backed by significant strategic developments and financial support, is positioning itself strongly within the competitive gold mining sector. The combination of operational efficiencies, robust financial strategies, and an ambitious growth trajectory signals a commitment to becoming a leading gold producer in Africa. Moving forward, stakeholders will be keenly watching the Kurmuk project's evolution as Allied Gold strives to deliver on its ambitious targets.

Conclusion

With its trajectory firmly set, Allied Gold is intent on evolving into a mid-tier gold producer, with synergies cultivated from its existing portfolios across Côte d'Ivoire, Mali, and Ethiopia. The financial backing through Wheaton and select lending bodies will undoubtedly serve as springboards as the company approaches its pivotal milestones within the gold mining landscape.