Allied Gold has formed a strategic partnership with UAE-based Ambrosia Investment Holding, securing $500 million to enhance its mining operations in Africa. Ambrosia will acquire 50% of Allied’s Mali assets and a 12% equity stake in the company. This partnership aims to significantly boost production and improve sustainability measures, while Allied also seeks a dual listing on the New York Stock Exchange.
Allied Gold Inc. (TSX: AAUC) has announced a strategic alliance with an investment group based in the United Arab Emirates, aimed at enhancing its mining operations in Africa. This partnership with Ambrosia Investment Holding will leverage regional knowledge and market support, marking a significant move as the UAE surpasses China in backing African ventures, having invested over $110 billion between 2019 and 2023.
As part of the agreement, Ambrosia will acquire 50% of Allied’s gold mining assets in Mali, which includes an 80% stake in the Sadiola mine, for a total of $375 million. Allied will receive an initial payment of $145 million upon closing, with an additional $230 million to follow. The collaboration will establish a 50/50 joint venture for the management of these assets.
Additionally, Ambrosia will buy a 12% equity stake in Allied Gold for approximately C$156.6 million, supporting the phased expansion of the Sadiola mine. This involves the purchase of around 46 million shares at C$3.40 each, reflecting a discount compared to the current market price.
The transaction, valued at $500 million, is anticipated to enhance Allied’s financial position, facilitating their growth strategies, including Sadiola’s expansion and the Kurmuk project in Ethiopia. The phased expansion at Sadiola aims to increase gold production from 170,000 ounces in 2023 to between 200,000 and 230,000 ounces annually at mid-term.
Allied plans two stages of expansion at Sadiola, with estimated costs of $65 million for the first phase and $400 million for the second, projected to reach production levels of 400,000 ounces per year over the first four years. The company also intends to introduce a photovoltaic power generation system at Sadiola, improving operational costs and minimizing environmental impact.
In Ethiopia, the Kurmuk project is expected to begin production in mid-2026, targeting a yield of approximately 290,000 ounces annually in the initial four years. With estimated reserves of 2.7 million ounces, Allied is optimistic about a mine life exceeding 15 years.
Furthermore, Allied Gold aims to list on the New York Stock Exchange, having initiated its application process. CEO Peter Marrone stated that the company meets the necessary criteria for NYSE listing and anticipates a decision within the first half of the year. “Canada is a great place to be a mining company, but New York is the king of the mountain in terms of listing seniority,” he remarked.
In conclusion, the strategic partnership between Allied Gold and Ambrosia Investment Holding is a significant development, providing enhanced financial support and regional expertise for advancing mining operations in Mali and Ethiopia. This collaboration may lead to increased production capacities and improved sustainability measures while positioning Allied favorably for future growth and potential listing on the NYSE. The significance of Emirati investments in Africa cannot be understated, indicating a shift in investment dynamics.
Original Source: www.mining.com
