Allied Gold Secures $175 Million for Ethiopian Gold Project

2024-12-07 companies

Toronto, Friday, 6 December 2024.
Allied Gold Corporation has secured $175 million in financing from Wheaton Precious Metals International, facilitating the development of the Kurmuk Project, Ethiopia’s first commercial gold mine.

Key Deal Terms

Allied Gold Corporation (TSX: AAUC) (OTCQX: AAUCF) has finalized a streaming agreement with Wheaton Precious Metals International (WPMI) on December 4, 2024 [1][2]. Under the terms of the agreement, WPMI will provide $175 million in upfront cash payments, distributed in four equal installments during the construction phase [3]. The streaming agreement grants WPMI the right to purchase 6.7% of payable gold until 220,000 ounces are delivered, after which the rate decreases to 4.8% for the remainder of the mine’s life [3][5].

Project Specifications

The Kurmuk Project, set to become Ethiopia’s first commercial gold mine, boasts impressive specifications with proven and probable mineral reserves of 2.7 million ounces [2]. The mine is projected to achieve an annual production of 240,000 ounces of gold, with operations expected to commence by mid-2026 [5]. Notably, the project demonstrates strong economic potential with anticipated All-In Sustaining Costs below $1,000 per ounce [2], significantly lower than Allied’s current portfolio average of $1,400 per ounce at its Mali and Côte d’Ivoire operations [5].

Strategic Implications

This financing agreement marks a crucial milestone in Allied Gold’s expansion strategy. Peter Marrone, Chairman and CEO of Allied Gold, emphasized that this stream financing enables the completion of their comprehensive financing package for the Kurmuk project [2]. The development positions Allied to increase its production to approximately 600,000 ounces per year by 2026, with further growth to 800,000 ounces annually by 2028 [5]. The project includes a 7% equity participation for the Government of Ethiopia upon reaching commercial production [2].

Future Outlook

The project’s development is already underway, with a $7.5 million exploration program targeting near-mine extensions and regional opportunities [2]. Randy Smallwood, President and CEO of Wheaton Precious Metals, has expressed confidence in the project, noting its significant exploration potential [2]. The streaming agreement is expected to enhance Wheaton’s total estimated proven and probable mineral gold reserves by 180,000 ounces [3], demonstrating the substantial scale of this venture.

Sources

Allied Gold financing