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

Allied Gold Partners with Wheaton Precious Metals

In a significant move to enhance its financial stability and funding capacity for the Kurmuk project, Allied Gold Corporation has recently finalized a streaming agreement worth $175 million with Wheaton Precious Metals International Ltd. This strategic partnership marks a notable step toward the development of what is poised to become Ethiopia's first commercial gold mine.

Agreement Details

Under this streaming arrangement, Allied Gold will receive the total cash amount of $175 million in installments throughout the construction phase of the mine. This funding will assist in not only the construction of the Kurmuk project but also in supporting the company's broader growth strategy.

Peter Marrone, Chairman and CEO of Allied, expressed his enthusiasm regarding the partnership, noting Wheaton’s robust support and acknowledgment of the inherent value of the Kurmuk project. Marrone underlined that the agreement allows Allied to move forward with confidence, securing key financing while emphasizing their commitment to sustainability and community support.

The Kurmuk Project: A Promising Venture

Located within the rich Arabian-Nubian Shield and approximately 500 kilometers from Ethiopia's capital, Addis Ababa, the Kurmuk project has been recognized for its substantial mineral potential. Allied Gold expects initial production to hit around 270,000 ounces of gold over the first five years, with an average annual output of 240,000 ounces for the mine’s lifespan, which is projected to exceed 15 years.

The project is designed with an impressive milling capacity of 6 million tonnes per annum (Mtpa) and a processing plan that boasts a strong recovery rate of 92%. These features place Kurmuk on course to be a significant contributor to the global precious metals market, elevating Ethiopia’s mining sector in the process.

Financial Strategy and Project Advantages

Wheaton will hold the right to purchase 6.7% of the payable gold produced from Kurmuk, decreasing to 4.8% after 220,000 ounces have been delivered. Additionally, Wheaton will pay 15% of the spot gold price for each ounce, ensuring a direct and beneficial relationship as production ramps up.

The streaming agreement strategically enhances Allied's financial framework, enabling it to proceed with the gold prepay, which is crucial for the comprehensive financing package required for the project. As part of this plan, Allied remains focused on advancing its exploration programs, aiming to increase its mineral inventories while committing to sustainable practices during the entire mining operation.

Exploring Future Opportunities

The collaborative approach taken by Allied Gold and Wheaton also reflects in the joint interest in improving environmental and social governance frameworks, with both companies committed to upholding the highest standards.

With a well-defined financial strategy, including cash flows and the anticipated $175 million advance from Wheaton, Allied Gold is positioned effectively for the eventual construction and opening of the Kurmuk mine. The project not only promises financial returns but also the enhancement of the local Ethiopian economy, fostering community engagement and sustainability through job creation and development initiatives.

As the Kurmuk project progresses, Allied Gold, backed by Wheaton’s investment, aims to shine as a beacon of growth and innovation within Ethiopia’s emerging metals and mining sector. The region is on the brink of transformation, and Allied Gold is ready to lead the charge toward a prosperous future for both the company and the communities it serves.

Conclusion

This recent financial transaction exemplifies Allied Gold's robust strategy in leveraging partnerships to bolster its growth trajectory while navigating the evolving dynamics of the global mining sector. The Kurmuk project is set to become a notable player in the industry, paving the way for future ventures and ensuring long-term sustainability for all stakeholders involved.