ALLIED GOLD ANNOUNCES FIRST CONSTRUCTION PAYMENT UNDER STREAMING AGREEMENT WITH WHEATON PRECIOUS METALS, AND US$75 MILLION GOLD PREPAY ARRANGEMENT
Rhea-AI Summary
Allied Gold (TSX: AAUC, OTCQX: AAUCF) has received the first construction payment of US$43.75 million from Wheaton Precious Metals under their previously announced US$175 million streaming agreement. Additionally, Allied has secured a US$75 million gold prepay arrangement with National Bank of Canada, Macquarie Bank , and Citibank.
Under the prepay arrangement, Allied will deliver 2,802 ounces of gold monthly to the lenders over twelve months, starting October 2026. This financing represents the latest component of the comprehensive financial package for the Kurmuk project development, which is expected to significantly boost the company's overall production and cash flows once operational.
AI-generated analysis. Not financial advice.
Positive
- Secured US$43.75 million initial construction payment from Wheaton streaming agreement
- Obtained additional US$75 million financing through gold prepay arrangement
- Low cost of capital financing structure
- Kurmuk project expected to significantly increase production and cash flows
Negative
- Future gold delivery obligations of 2,802 ounces monthly starting October 2026
News Market Reaction – AAUCF
On the day this news was published, AAUCF declined 3.76%, reflecting a moderate negative market reaction.
Data tracked by StockTitan Argus on the day of publication.
In addition, Allied has entered into gold prepaid forward arrangement with select lenders (the "Prepay Lenders"), for a total advance amount of
The gold prepay arrangement is a low cost of capital financing and represents the latest component of the previously announced comprehensive financial package for the construction and development of the Kurmuk project which once in production will significantly increase production overall for the Company and generate robust and increasing cash flows.
About Kurmuk Project
The Kurmuk project is located in western
The Kurmuk project is fully permitted and currently in construction with first gold planned by the second quarter of 2026. Earthworks, camp construction along with engineering and procurement are progressing well with the project remaining on track and on budget. The Kurmuk project has been designed for a milling capacity of 6 Mtpa to leverage the large and prospective land package. Mining is planned as conventional shovel-truck open pit operations at Dish Mountain and Ashashire. Processing is designed as conventional CIL circuit and recoveries are expected to average
Allied is advancing an aggressive exploration program at Kurmuk, with a 2024 exploration budget of
About Allied Gold Corporation
Allied is a Canadian-based gold producer with a significant growth profile and mineral endowment which operates a portfolio of three producing assets and development projects located in Côte d'Ivoire,
END NOTES
(1) | This is a non-GAAP financial performance measure for which the most directly comparable IFRS measure is cost of sales. Refer to the Non-GAAP Financial Performance Measures section at the end of this news release. |
Qualified Persons
Except as otherwise disclosed, all scientific and technical information contained in this press release has been reviewed and approved by Sébastien Bernier, P.Geo (Vice President, Technical Services). Mr. Bernier is an employee of Allied and a "Qualified Person" as defined by Canadian Securities Administrators' National Instrument 43-101 - Standards of Disclosure for Mineral Projects.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION AND STATEMENTS
This press release contains "forward-looking information" under applicable Canadian securities legislation. Except for statements of historical fact relating to the Company, information contained herein constitutes forward-looking information, including, but not limited to, any information as to the Company's strategy, objectives, plans or future financial or operating performance. Forward-looking statements are characterized by words such as "plan", "expect", "budget", "target", "project", "intend", "believe", "anticipate", "estimate" and other similar words or negative versions thereof, or statements that certain events or conditions "may", "will", "should", "would" or "could" occur. Forward-looking information included in this press release includes, without limitation, statements with respect to information concerning the stream transaction, gold prepaid forward arrangement, expectations to be fully financed, expected construction plans for the mine at the Kurmuk project, and expected production, exploration, development and expansion plans discussed herein being met. Forward-looking information is based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made, and is inherently subject to a variety of risks and uncertainties and other known and unknown factors that could cause actual events or results to differ materially from those projected in the forward-looking information. These factors include the Company's ability to satisfy all conditions precedent to the completion of the transactions discussed herein; ability to successfully execute on its development, optimization and expansion plans; expected life of mine extension being achieved as anticipated; dependence on products produced from its key mining assets; fluctuating price of gold; risks relating to the exploration, development and operation of mineral properties, including but not limited to adverse environmental and climatic conditions, unusual and unexpected geologic conditions and equipment failures; risks relating to operating in emerging markets, particularly
Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that could cause actions, events or results to not be as anticipated, estimated or intended. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The Company undertakes no obligation to update forward-looking information if circumstances or management's estimates, assumptions or opinions should change, except as required by applicable law. The reader is cautioned not to place undue reliance on forward-looking information. The forward-looking information contained herein is presented for the purpose of assisting investors in understanding the progress under the Company's strategic financing package and the Company's operational performance and the Company's plans and objectives and may not be appropriate for other purposes.
CAUTIONARY STATEMENT REGARDING NON-GAAP MEASURES
The Company has included certain non-GAAP financial performance measures in this press release, which supplement its Consolidated Financial Statements that are presented in accordance with IFRS, including the following:
- Cash costs per gold ounce sold (which is included in AISC); and
- AISC per gold ounce sold
The Company believes that these measures, together with measures determined in accordance with IFRS, provide investors with an improved ability to evaluate the underlying performance of the Company.
Non-GAAP financial performance measures do not have any standardized meaning prescribed under IFRS, and therefore may not be comparable to similar measures employed by other companies. Non-GAAP financial performance measures are intended to provide additional information, and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS and are not necessarily indicative of operating costs, operating earnings or cash flows presented under IFRS.
Management's determination of the components of non-GAAP financial performance measures and other financial measures are evaluated on a periodic basis, influenced by new items and transactions, a review of investor uses and new regulations as applicable. Any changes to the measures are duly noted and retrospectively applied, as applicable. Subtotals and per unit measures may not calculate based on amounts presented in the following tables due to rounding.
The measures of cash costs and AISC, along with revenue from sales, are considered to be key indicators of a company's ability to generate operating earnings and cash flows from its mining operations.
CASH COSTS PER GOLD OUNCE SOLD
Cash costs include mine site operating costs such as mining, processing, administration, production taxes and royalties which are not based on sales or taxable income calculations. Cash costs exclude DA, exploration costs, accretion and amortization of reclamation and remediation, and capital, development and exploration spend. Cash costs include only items directly related to each mine site, and do not include any cost associated with the general corporate overhead structure.
The Company discloses cash costs because it understands that certain investors use this information to determine the Company's ability to generate earnings and cash flows for use in investing and other activities. The Company believes that conventional measures of performance prepared in accordance with IFRS do not fully illustrate the ability of its operating mines to generate cash flows. The most directly comparable IFRS measure is cost of sales, excluding DA. As aforementioned, this non-GAAP measure does not have any standardized meaning prescribed under IFRS, and therefore may not be comparable to similar measures employed by other companies, should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS, and is not necessarily indicative of operating costs, operating earnings or cash flows presented under IFRS.
Cash costs are computed on a weighted average basis, with the aforementioned costs, net of by-product revenue credits from sales of silver, being the numerator in the calculation, divided by gold ounces sold.
AISC PER GOLD OUNCE SOLD
AISC figures are calculated generally in accordance with a standard developed by the World Gold Council ("WGC"), a non-regulatory, market development organization for the gold industry. Adoption of the standard is voluntary, and the standard is an attempt to create uniformity and a standard amongst the industry and those that adopt it. Nonetheless, the cost measures presented herein may not be comparable to other similarly titled measures of other companies. The Company is not a member of the WGC at this time.
AISC include cash costs (as defined above), mine sustaining capital expenditures (including stripping), sustaining mine-site exploration and evaluation expensed and capitalized, and accretion and amortization of reclamation and remediation. AISC exclude capital expenditures attributable to projects or mine expansions, exploration and evaluation costs attributable to growth projects, DA, income tax payments, borrowing costs and dividend payments. AISC include only items directly related to each mine site, and do not include any cost associated with the general corporate overhead structure. As a result, Total AISC represent the weighted average of the three operating mines, and not a consolidated total for the Company. Consequently, this measure is not representative of all of the Company's cash expenditures.
Sustaining capital expenditures are expenditures that do not increase annual gold ounce production at a mine site and exclude all expenditures at the Company's development projects as well as certain expenditures at the Company's operating sites that are deemed expansionary in nature, such as the Sadiola Phased Expansion, the construction and development of Kurmuk and the PB5 pushback at Bonikro. Exploration capital expenditures represent exploration spend that has met criteria for capitalization under IFRS.
The Company discloses AISC as it believes that the measure provides useful information and assists investors in understanding total sustaining expenditures of producing and selling gold from current operations, and evaluating the Company's operating performance and its ability to generate cash flow. The most directly comparable IFRS measure is cost of sales, excluding DA. As aforementioned, this non-GAAP measure does not have any standardized meaning prescribed under IFRS, and therefore may not be comparable to similar measures employed by other companies, should not be considered in isolation as a substitute for measures of performance prepared in accordance with IFRS, and is not necessarily indicative of operating costs, operating earnings or cash flows presented under IFRS.
AISC are computed on a weighted average basis, with the aforementioned costs, net of by-product revenue credits from sales of silver, being the numerator in the calculation, divided by gold ounces sold.
CAUTIONARY NOTE TO U.S. INVESTORS REGARDING ESTIMATES OF MEASURED, INDICATED AND INFERRED RESOURCES
This press release uses the terms "Measured", "Indicated" and "Inferred" Mineral Resources as defined in accordance with NI 43-101.
NOTES ON MINERAL RESERVES AND MINERAL RESOURCES
Mineral Resources are stated effective as at December 31, 2023, reported at a 0.5 g/t cut-off grade, constrained within an
Mineral Reserves are stated effective as at December 31, 2023 and estimated in accordance with CIM Standards and NI 43-101. The Mineral Reserves:
- are inclusive of the Mineral Resources which were converted in line with the material classifications based on the level of confidence within the Mineral Resource estimate;
- reflect that portion of the Mineral Resources which can be economically extracted by open pit methods;
- consider the modifying factors and other parameters, including but not limited to the mining, metallurgical, social, environmental, statutory and financial aspects of the project;
- include an allowance for mining dilution and ore loss; and
- were reported using cut-off grades that vary by ore type due to variations in recoveries and operating costs. The cut-off grades and pit shells were based on a
$1,500 $1,800
Mineral Reserve and Mineral Resource estimates are shown on a
The Mineral Resource and Mineral Reserve estimates for each of the Company's mineral properties have been approved by the qualified persons (within the meaning of NI 43-101) as set forth below:
Qualified Person of Mineral Reserves | Qualified Person of Mineral Resources |
John Cooke of Allied Gold Corporation | Steve Craig of Orelogy Consulting Pty Ltd. |
Mineral Reserves (Proven and Probable)
The following table sets forth the Mineral Reserve estimates for the Company's mineral properties as at December 31, 2023.
Mineral Property | Proven Mineral Reserves | Probable Mineral Reserves | Total Mineral Reserves | ||||||
Tonnes (kt) | Grade (g/t) | Content (koz) | Tonnes (kt) | Grade (g/t) | Content (koz) | Tonnes (kt) | Grade (g/t) | Content (koz) | |
Sadiola Mine | 18,612 | 0.82 | 492 | 137,174 | 1.57 | 6,907 | 155,786 | 1.48 | 7,399 |
Kurmuk Project | 21,864 | 1.51 | 1,063 | 38,670 | 1.35 | 1,678 | 60,534 | 1.41 | 2,742 |
Bonikro Mine | 4,771 | 0.71 | 108 | 8,900 | 1.62 | 462 | 13,671 | 1.30 | 571 |
Agbaou Mine | 1,815 | 2.01 | 117 | 6,092 | 1.79 | 351 | 7,907 | 1.84 | 469 |
Total Mineral Reserves | 47,061 | 1.18 | 1,782 | 190,836 | 1.53 | 9,399 | 237,897 | 1.46 | 11,180 |
Notes:
- Mineral Reserves are stated effective as at December 31, 2023 and estimated in accordance with CIM Standards and NI 43-101.
- Shown on a
100% basis. - Reflects that portion of the Mineral Resource which can be economically extracted by open pit methods.
- Considers the modifying factors and other parameters, including but not limited to the mining, metallurgical, social, environmental, statutory and financial aspects of the project.
Sadiola Mine:
- Includes an allowance for mining dilution at
8% and ore loss at3% - A base gold price of
$150 0$132 0$150 0 - The cut-off grades used for Mineral Reserves reporting were informed by a
$150 0
Kurmuk Project:
- Includes an allowance for mining dilution at
18% and ore loss at2% - A base gold price of
$150 0$132 0$144 0 - The cut-off grades used for Mineral Reserves reporting were informed by a
US /oz gold price and vary from 0.30 g/t to 0.45 g/t for different ore types due to differences in recoveries, costs for ore processing and ore haulage.$150 0
Bonikro Mine:
- Includes an allowance for mining dilution at
8% and ore loss at5% - A base gold price of
$150 0- With the selected pit shell using a value of
$138 8 - Cut-off grades vary from 0.68 to 0.74 g/t Au for different ore types due to differences in recoveries, costs for ore processing and ore haulage.
- With the selected pit shell using a value of
- A base gold price of
$180 0- With the selected pit shell using a value of
$180 0 - Cut-off grades vary from 0.58 to 1.00 g/t Au for different ore types to the Agbaou processing plant due to differences in recoveries, costs for ore processing and ore haulage
- With the selected pit shell using a value of
Agbaou Mine:
- Includes an allowance for mining dilution at
26% and ore loss at1% - A base gold price of
$150 0- Pit designs (revenue factor 1.00) apart from North Gate (Stage 41) and South Sat (Stage 215) pit designs which used a higher short term gold price of
$180 010% of the Mineral Reserves. - Cut-off grades which range from 0.49 to 0.74 g/t for different ore types due to differences in recoveries, costs for ore processing and ore haulage.
- Pit designs (revenue factor 1.00) apart from North Gate (Stage 41) and South Sat (Stage 215) pit designs which used a higher short term gold price of
Mineral Resources (Measured, Indicated, Inferred)
The following table set forth the Measured and Indicated Mineral Resource estimates (inclusive of Mineral Reserves) and for the Company's mineral properties at December 31, 2023.
Mineral Property | Measured Mineral Resources | Indicated Mineral Resources | Total Measured and Indicated Mineral Resources | ||||||
Tonnes (kt) | Grade (g/t) | Content (koz) | Tonnes (kt) | Grade (g/t) | Content (koz) | Tonnes (kt) | Grade (g/t) | Content (koz) | |
Sadiola Mine | 20,079 | 0.86 | 557 | 205,952 | 1.53 | 10,101 | 226,031 | 1.47 | 10,659 |
Kurmuk Project | 20,472 | 1.74 | 1,148 | 37,439 | 1.64 | 1,972 | 57,912 | 1.68 | 3,120 |
Bonikro Mine | 7,033 | 0.98 | 222 | 25,793 | 1.41 | 1,171 | 32,826 | 1.32 | 1,393 |
Agbaou Mine | 2,219 | 2.15 | 154 | 11,130 | 1.96 | 701 | 13,349 | 1.99 | 855 |
Total Mineral Resources | 49,804 | 1.30 | 2,081 | 280,315 | 1.55 | 13,945 | 330,118 | 1.51 | 16,027 |
The following table set forth the Inferred Mineral Resource estimates and for the Company's mineral properties as at December 31, 2023.
Mineral Property | Inferred Mineral Resources | ||
Tonnes (kt) | Grade (g/t) | Content (koz) | |
Sadiola Mine | 16,177 | 1.12 | 581 |
Kurmuk Project | 5,980 | 1.62 | 311 |
Bonikro Mine | 19,588 | 1.30 | 816 |
Agbaou Mine | 959 | 1.84 | 57 |
Total Mineral Resources | 42,704 | 1.29 | 1,765 |
Notes:
- Mineral Resources are estimated in accordance with CIM Standards and NI 43-101.
- Shown on a
100% basis. - Are inclusive of Mineral Reserves. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
- Are listed at 0.5 g/t Au cut-off grade, constrained within an
US /oz pit shell and depleted to 31 December 2023.$180 0 - Rounding of numbers may lead to discrepancies when summing columns.
View original content to download multimedia:https://www.prnewswire.com/news-releases/allied-gold-announces-first-construction-payment-under-streaming-agreement-with-wheaton-precious-metals-and-us75-million-gold-prepay-arrangement-302336340.html
SOURCE Allied Gold Corporation