Allied GOLD Announces Second Quarter 2024 Results: Setting the Stage FOR a Strong Second Half with Critical Investments to Sustain Production and Realize Unparalleled Growth Potential
NEWS RELEASE
ALLIED GOLD ANNOUNCES SECOND QUARTER 2024 RESULTS: SETTING THE STAGE FOR A STRONG SECOND HALF WITH
CRITICAL INVESTMENTS TO SUSTAIN PRODUCTION AND REALIZE UNPARALLELED GROWTH POTENTIAL
TORONTO, ON – August 8, 2024 ─ Allied Gold Corporation (TSX: AAUC) (“Allied” or the “Company”) is herein reporting its
financial and operational results for the second quarter of 2024. During the quarter, the Company produced 88,135 gold
ounces (“oz”) and sold 84,611 oz at total cost of sales, cash costs (1) and all -in sustaining costs (“AISC”) (1) per oz sold of
$1,547, $1,355, and $1,498, respectively. Importantly, Allied continues to deliver on its sustainable production base at
sequentially lower costs, and has made significant investments during the quarter to meet both its current guidance and
industry-leading growth plans, including:
• Additional Oxide Ore Feed at Sadiola: As anticipated, ore from Diba was exposed and became available for mining
in late June. Limited quantities were processed as part of industrial -scale tests to assess plant behavior, yielding
positive results. Further production and initial sales of gold from Diba are expected to commence during the third
quarter, subject to the receipt of authorizations for processing at Sadiola, which are currently in progress. Diba, an
oxide and higher-grade ore body, is expected to significantly contribute to the company's production at Sadiola this
year, replacing some of the lower-grade fresh ore initially planned for the plant. Exploration continues at Sekekoto
West, FE4, and Tambali South to uncover additional near-surface oxide gold mineralization, maximizing short-term
production and cash flows, and building a growing inventory of Mineral Resources.
• Investment in Self -Reliance and Operational Flexibility: During the second quarter , Côte d'Ivoire experienced
sporadic power generation issues, leading to intermittent unplanned shutdowns of the processing plants. To
address this, and as part of the Company's broader objective of becoming more self -reliant, Allied successfully
installed backup generators at its Côte d'Ivoire operations. This investment effectively mitigated future power
reliability risks. In addition to the immediate installation of generators, the Company is also discussing a turnkey
solar power solution with a solar power provider.
• Executing Financial Strategy: On August 7, 2024, the Company entered into a gold streaming agreement with a
wholly-owned subsidiary of Triple Flag Precious Metals Corp. ("Triple Flag"). Under the terms of the agreement,
Allied will receive a US$53 million upfront cash payment (the “Advance Amount”) and Triple Flag will purchase 3%
of the payable gold produced at each of the Agbaou and Bonikro mines, subject to a step -down to 2% after set
delivery thresholds, in exchange for the Advance Amount and an ongoing payment equal to 10% of the spot gold
price. Closing of the transaction and receipt of the of the Advance Amount is subject to certain conditions
precedent, including certain third-party consents and agreements, and completion of related security documents
which are expected to be completed in short order. Given the competitive cost of capital realized via the Côte
d'Ivoire stream and strong market feedback, Allied is arranging a minimum $250 million Kurmuk funding package
comprising a gold stream and a gold prepay facility for the development project. This comprehensive funding
solution is expected to close by the end of September 2024. The prospective stream validates the opportunities at
Kurmuk, including its strong geological upside potential, and has attracted significant interest at a low cost of
capital. The gold prepay facility would bring forward cash flow and include a built -in gold price hedge amidst
favorable market prices.
• Progress on Exploration and Growth Initiatives: Exploration efforts continued to yield positive results in the
second quarter , as shown in the press releases on April 10 and June 26 , 2024. The Company confirmed high
prospectivity at Kurmuk's Tsenge gold prospect and new oxide discoveries at Sadiola's Sekekoto West, supporting
the Company’s goal of growing significant Mineral Reserves and Mineral Resources. Key advancements at Kurmuk
include progress on the EPCM Early Works contract under DRA Global Limited, ongoing procurement of long -lead
items including the ball mill (in addition to the already owned SAG mill), and the tendering process for contract
mining and bulk earthworks.
SECOND QUARTER HIGHLIGHTS
Financial Results
• Net Profit before Income Tax for the three months ended June 30, 2024 was $36.1 million.
• Second quarter net earnings(2) of $8.3 million or $0.03 per share basic and diluted.
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• Adjusted first quarter net earnings (1)(2) of $15.9 million or $0.06 per share basic and diluted, largely reflecting
shared-based compensation and adjustments for non -recurring items related to unrealized losses on the
revaluation of financial instruments.
• Operating cash flow before income tax paid and movements in working capital was $56.9 million , up significantly
from both the first quarter of 2024 and the comparative prior period quarter .
• Net cash used in operating activities for the three months ended June 30, 2024 was $6.2 million , negatively
impacted by anticipated income tax payments in the second quarter and working capital movements. Working
capital was primarily affected by the timing of VAT credit receipts at Sadiola, the buildup of inventory stockpiles for
Diba and Bonikro, the seasonal buildup of materials and supplies in anticipation of the rainy season in Mali,
finished goods awaiting shipment, and, to a lesser extent, the general timing of accounts payable. Cash flows from
operating activities are expected to materially increase through the remainder of 2024, driven by increased
production contributions, lower costs in the second half of the year , and more normalized adjustments for changes
to working capital.
• Expenses are expected to continue to trend lower over the remainder of the year , with quarter -over-quarter
savings and improvements expected, the most significant of which are expected in the second -half of the year . As
costs further decrease, and production increases, the per ounce cost of general and administrative expenses will
decrease more than commensurately.
• Cash and cash equivalents totaled $78.0 million as at June 30, 2024. With an expected strong second half of the
year, punctuated by anticipated higher production and lower costs, which creates a step -change in cash flow
generation, the Company is well positioned to cover its upcoming capital expenditure ramp-up at Kurmuk. Further,
cash is expected to meaningfully increase in the third quarter with the closing of the $53 million streaming
agreement with Triple Flag, subject to the satisfaction of conditions precedent.
Operational Results – Delivering on H1 Guidance with Improvements Expected in H2
Operating results year -to-date are consistent with the midpoint of the Company's guided range, taking into account the
expected production split between the first and second halves of the year, despite the aforementioned power disruptions in
Côte d'Ivoire and mining outpacing processing at Diba.
For three months ended June 30, For six months ended June 30, YTD Percentage
2024 2023 2024 2023 Improvement
Gold Ounces
Produced 88,135 85,983 173,312 164,589 5 %
Allied's sustainable production base continues to demonstrate a solid platform for significant growth, with consolidated
production higher in both Q2 and the first half of the year compared to the same periods in the prior year. Production would
have been approximately 13% higher , adjusting for:
• Contributions from Diba: Ore from Diba was exposed and available for mining late in June, as planned, in order to
commence the industrial scale tests at the Sadiola plant to confirm and optimize processing parameters. As such,
limited quantities of ore were processed during the month to conduct these tests and assess the processing plant
behavior and controls for the higher -grade ores in particular, and these tests were successful. The plant trial
yielded production at better than expected grades. Further production and initial sales of gold from Diba are
expected to commence during the third quarter , subject to the receipt of authorizations for processing at Sadiola,
which are currently in progress. Diba, an oxide and higher -grade ore body, is expected to represent a significant
component of the Company's production at Sadiola this year, displacing some of the lower -grade ore originally
planned to be fed through the plant. This is expected to improve both production and cost efficiency. The quarter
ended with approximately 175,000 tonnes of oxide ore stockpiled at Diba from the Korali -Sud mining license,
representing approximately 6,400 ounces of mined gold. This stockpile included 74,000 tonnes of ore at an average
grade of 1.9 g/t, which would have been processed had the formal authorizations been received during the quarter.
These ounces would have been additive to production in the second quarter , but are not included in the total
disclosed production. Further , exploration continues at Sekekoto West, FE4, and Tambali South to define additional
near-surface oxide gold mineralization, with the objective of maximizing short-term production and cash flows, and
building a growing inventory of Mineral Resources.
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• Côte d'Ivoire operations : As part of the Company's broader objective of becoming more self -reliant, backup
generators were successfully installed in the second quarter at its Côte d'Ivoire operations for an initial unbudgeted
cash outlay of $14.1 million. This investment, spread across its in -country operations, effectively mitigated future
power reliability risks. Côte d'Ivoire continued to experience issues at some of its power generation plants during
the second quarter, leading the mining industry to reduce consumption by intermittently shutting down processing
plants while power generation equipment was restored to the grid. In addition to the immediate installation of
generators, the Company is also discussing a turnkey solar power solution with a solar power provider. The
Company expects it would have produced an additional 8,625 ounces —comprising 5,175 ounces at Bonikro and
3,450 ounces at Agbaou—had the intermittent power shutdowns not occurred.
As previously disclosed, production is expected to be weighted to the second half of the year with quarter over quarter
variances due to mine sequencing and accessing higher grades as per the mining plan, along with the implementation of
operational improvements. Production is expected to sequentially increase in the third quarter , and stay roughly the same in
the fourth quarter, all of which aligns with Allied's guidance of 375,000 to 405,000 ounces for 2024 at a mine -site AISC(1) of
$1,400/oz.
On a longer-term outlook, the Company continues to target production of 400,000 -450,000 oz at a mine -site AISC(1) below
$1,375 per oz for 2025, and aims to exceed 600,000 oz at a mine -site AISC(1) below $1,225 per oz for 2026. These projected
improvements are underpinned by additional oxide ore feed and the Phase 1 expansion at Sadiola, as well as the initiation
of production at Kurmuk in 2026. Meanwhile, annual increases in production at Bonikro, as PB5 progresses, combined with
stable production at Agbaou, will further enhance the company's sustainable production platform.
Advancement of Key Growth Initiatives
Kurmuk
The project implementation team, which boasts strong African project delivery capabilities, began focusing on early works
execution planning in the fourth quarter of 2023, continuing through the first half of 2024. To date, the Company has
completed execution planning and preparation activities, which included mobilizing the EPCM contractor to the site,
advancing detailed engineering, and formalizing and executing the procurement plan. Activities also included defining and
implementing all project procedures, planning logistics, tracking key logistic deliveries such as camp facilities, and placin g
orders for key early works contracts, including the installation of the starter camp and the construction of the temporary
water dam. The construction of the temporary water dam, built by a local earthworks contractor under DRA's supervision,
was completed on schedule and the dam is now full. Additionally, the construction camp build is advancing, with
earthworks, civil works, and delivery of modules for the main 1,600-person camp ongoing. Operational readiness remains a
key focus, with planning and preparation activities underway, including the recruitment of the General Manager and other
operating positions. The Company intends to award the mining contract in the near future, with the objective of advancing
earthworks and allowing for the early mobilization of equipment and the development of customs, importation, and
logistics systems well ahead of the timeframe when mining will begin.
Exploration efforts continued to yield positive results in the second quarter . The Company announced positive exploration
results at Kurmuk's Tsenge gold prospect, confirming high prospectivity for the property. These results support the
Company’s objective to deliver significant Mineral Resource growth. The continued progress in both project development
and exploration activities underscores Allied’s dedication to maximizing the potential of Kurmuk and establishing it as a
significant gold mineral province in Western Ethiopia.
The Company looks forward to providing further updates as exploration and construction activities progress, and the project
moves closer to its goal of delivering increased and sustainable value to stakeholders. The Kurmuk Project is fully permitted
and licensed, on budget, and on schedule for first production in mid-2026.
Sadiola
Current efforts have been aimed at increasing the inventory of oxide and fresh ores, optimizing mining and processing, and
conducting several technical studies on processing fresh ores through existing facilities. This will be followed by the
development of a new plant dedicated to processing fresh ore and implementing enhancements to existing facilities to
benefit both the current and planned new plant.
Significant improvements in production are targeted in the short term due to contributions from high -grade oxide ore. The
goal is to maintain production levels between 200,000 and 230,000 ounces per year over the next two years, reduce AISC(1),
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increase revenue, and provide robust cash flows in 2024 and 2025 to support development projects across the Company.
This approach enables the mine to produce at elevated levels while incurring lower near-term capital costs.
Pre-construction activities for the Phase 1 Expansion are progressing well, with detailed engineering, procurement, and
execution planning continuing. The updated engineering study for this phase reconfirmed a total capital expenditure of
approximately $61.6 million and the design to treat up to 60% of fresh rock at a rate of up to 5.7 Mt/y in the existing process
plant. Infrastructure upgrades to prepare the site for the next phase of investment will also be advanced during this period.
The Phase 2 Expansion is planned as a new processing plant to be built beginning in late 2026, fully operational in 2029.
The Company is also advancing optimization opportunities for the project, including metallurgical test work and a pre -
feasibility study to potentially increase recoveries by over 10% through the use of flotation and concentrate leaching. This
study, supported by the Company's phased investment, seeks to significantly improve the project's financial performance.
With this long -term and value -focused strategy, the Company is well -positioned to affirm that the advancement of the
Sadiola Project is proceeding as planned, reinforcing Allied's commitment to operational excellence and long -term value
creation.
Financing Strategy
The Company's ability to unlock the significant value in its large and expanding mineral inventory is supported by the
financial flexibility needed to internally fund these optimizations and growth initiatives. Based on recent gold prices, the
Company expects to be fully financed through cash flows; however , as a precaution, so that the Company is not dependent
on the price of gold, Allied is actively executing a select number of non -dilutive alternatives. This strategic direction is
prompted by the current capital markets not fully capturing the inherent value of the Company's assets, leading Allied to
seek alternative sources of capital that offer low -cost options with the added benefit of more accurately reflecting true
value to market participants.
In association with these efforts, on August 7 , 2024, the Company announced that it has entered into a streaming
transaction with Triple Flag. Under the terms of the agreement, Allied will receive a US$53 million upfront cash payment
and an ongoing payment equal to 10% of the spot gold price. Triple Flag will have the right to purchase 3% of the payable
gold produced at each of the Agbaou and Bonikro mines, subject to a step-down to 2% after set delivery thresholds. Closing
of the transaction and funding of the Advance Amount is subject to certain conditions precedent, including certain third -
party consents and agreements, and completion of related security documents which are expected to be completed in short
order .
The transaction recognizes the inherent value of the Company’s CDI Complex and implies a valuation multiple significantly
higher than that at which the Company’s shares currently trade in the market and the price at which the Company went
public. The CDI Complex comprises the Agbaou and Bonikro mines, which are located in Côte d'Ivoire within the Birimian
Greenstone Belt. Allied is targeting a sustainable production platform of 180,000 -200,000 gold ounces per annum on a
combined basis and a mine life greater than 10 years for the complex, driven by an extensive exploration program, cost
optimizations, and process improvements aimed at extending mine life and increasing value. The Company evaluated
different financing options as part of this process, concluding that this transaction provides a much better cost of capital
than any other alternative, including equity financing. The streaming agreement offers a competitive cost of capital based
on Proven & Probable Mineral Reserves and remains favorable when assuming Mineral Resource conversion and exploration
upside. Lastly, the Advance Amount ensures self -funding for Allied’s extensive exploration program for the CDI Complex,
with a total of US$16.5 million allocated for 2024 to advance highly prospective sites such as Oume, Akissi -So, Agbalé, and
other targets. It also allows for the acceleration of improvement projects to increase the reliability of operations, optimiz e
plant capacity, and bring forward value and extensions of mine life. Allied expects this flexibility to facilitate capturing
further upside beyond the current life of mine plans. These enhancements are designed to increase asset value and unlock
upside potential without diminishing shareholder equity.
Given the competitive cost of capital realized via the Côte d'Ivoire stream and strong market feedback, Allied is arranging a
minimum $250 million Kurmuk funding package comprising a gold stream and a gold prepay facility for the Kurmuk
development project. This comprehensive funding solution is expected to close by the end of September 2024. The
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prospective stream validates the opportunities at Kurmuk, including its strong geological upside potential, and has attracted
significant interest at an attractive cost of capital.
The gold prepay facility would bring forward cash flows and include a built -in gold price hedge amidst favorable market
prices. This prepay would begin gold deliveries after Kurmuk's anticipated mid -2026 construction timeframe, further
balancing the cash requirements for its construction. Lastly, a further benefit of this financing plan is that it will provide the
Company further financial flexibility to apply cash flows from existing operations, which are expected to increase because of
ongoing operational improvements, toward possible acceleration of expansion plans at Sadiola and maximizing value
creation and returns to shareholders.
Sustainability
• The Company did not report any significant Environmental Incidents for the three and six months ended June 30,
2024.
• For the quarter ended June 30, 2024, the Company reported two Lost Time Injuries (“LTI”), resulting in a Lost Time
Injury Rate (“LTIR”) of 0.54(4).
OPERATING RESULTS SUMMARY
For three months ended June 30, For six months ended June 30,
2024 2023 2024 2023
Gold ounces
Production 88,135 85,983 173,312 164,589
Sales 84,611 75,373 169,747 158,848
Per Gold Ounce Sold
Total Cost of Sales(4) $ 1,547 $ 1,586 $ 1,581 $ 1,584
Cash Costs(1) $ 1,355 $ 1,418 $ 1,376 $ 1,427
AISC(1) $ 1,498 $ 1,578 $ 1,530 $ 1,561
Average revenue per ounce $ 2,309 $ 1,921 $ 2,181 $ 1,881
Average market price per ounce* $ 2,338 $ 1,975 $ 2,206 $ 1,931
*Average market prices based on the LMBA PM Fix Price
Sadiola
For the three months ended June 30, 2024, Sadiola had a strong quarter and fully met expectations with production of
51,784 ounces of gold, compared to 45,799 ounces in the prior year period, representing an increase of 13%. The higher
production was due to the processing of higher -grade ore and the installation of additional screening capacity, which
allowed for the screening, crushing, and processing of higher proportions of hard rock and sulphide ores from the stockpile.
Following a re -optimization, pit sequencing has been enhanced for 2024, and additional emphasis is being put into
improving mining performance. Plant performance was in line with expectations, with the focus having successfully
remained on ore-crushing and screening throughout the quarter. Production was also positively impacted in relation to the
comparative quarter, as aforementioned by improving feed grade, due to ore type blending. Recovery percentages were in
line with projection based on ore types, despite being lower than prior year comparatives.
The Company is advancing its power generation facilities to enhance stability and reduce costs, which includes installing a
centralized automated system. Furthermore, with the completion of a new oxygen plant earlier in the year to lower costs
and improve recoveries, Sadiola is undertaking additional improvement initiatives.
Gold sales for the current quarter were relatively in line with production, resulting from timing of shipments.
In 2023, the Government of Mali introduced a new mining law, intended to provide more economic benefit to the State in
respect of new mining projects. The Company’s Sadiola mine is bound to a Convention which should not require compliance
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with the new mining law, as the Convention provides for fiscal stability pursuant to the applicable laws that precede the new
mining law. The Company believes the new mining law should not apply to Sadiola and has had discussions with the
Government about investing in the expansion of Sadiola under the regime applicable pursuant to the Convention. Equally,
the Company is aware of context and background and has indicated that it will continue to cooperate in discussions relating
to mining companies becoming subject to the new mining law. As part of a broader outreach to mining companies, the
Company has been invited to meet with government representatives for discussions on the impact of the new mining law
on mining companies. The Company has attended and continues to attend those meetings and engage in those discussions.
The Company has stated that if it were to comply with the new mining law , certain derogations of the fiscal and financial
provisions of that law should be considered. Discussions on those derogations, and more generally on the application of the
new mining law, continue. On compliance with the new mining law , the Company expects to receive a new ten -year
exploitation permit with effect from August 1, 2024.
Meaningful improvements in production are targeted in the short term as a result of the contribution from Diba high-grade
oxide ore, with the objective to support production levels between 200,000 and 230,000 ounces per year in the next two
years, reduce AISC(1), increase revenue, and provide robust cash flows in 2024 and 2025, to support development projects
across the Company.
Engineering studies at Diba resulted in a maiden Proven and Probable Mineral Reserve declared on December 31, 2023, of
6.1 million tonnes at a grade of 1.43 g/t, containing 280,000 gold ounces.
The discovery of additional economic oxide mineralisation has the potential to improve upon these targets, and as such
exploration activities, resource modeling and engineering studies are in progress for several areas and new discoveries of
oxide ore, including those at S12, Sekekoto West, FE4 and Tambali South, among others. These developments are a key part
of the Company's strategy, allowing for the optimized utilization of existing resources and infrastructure, and supplement
Diba ore feed, further contributing to production and costs improvements for the next several years, providing mine plan
flexibility with more areas for mining.
During the second quarter , exploratory and Mineral Resource drilling programs were conducted on the Sadiola and Diba
mining licenses. A total of 280 holes were drilled for 24,975 metres by 5 drill rigs, with 109 holes for 11,776 metres
completed at Sadiola and 171 holes for 13,199 metres completed at Diba. Resource drilling programs were completed on
the Sadiola mining license ("ML") at Tambali Pit, S12 prospect. At Diba ML infill drilling at approximately 25 metre spacing on
the reserve was completed as advanced grade control, and sterilisation drilling for the waste rock dump at Diba was also
completed. Mineral Resource and exploratory drilling programs continued and were expanded at Sekekoto West and FE2.5
prospects on the Sadiola ML during the quarter .
Exploratory drilling at Sekekoto West continues to extend mineralisation along strike to the north, with incremental step
outs pinning the narrow steep high -grade zone in the oxide. Phased drilling around this has defined 1.1 kilometres of
continuous strike of mineralisation at the prospect. Similarly exploratory drilling has met with success at FE2.5 also defining
approximately 1 kilometre of strike of oxide mineralisation. At both prospects, down-dip core drilling has demonstrated that
tectonic breccias are sulphide mineralised and lie beneath the oxide mineralisation, demonstrating further opportunity to
develop sulphide resources. The prospects are developed on faults cutting across the north -south orientated lithological
contacts between limestones and sandstones. A second trend of mineralisation identified at FE2.5 some 400m to the west
on a parallel contact is currently the subject of a first pass drilling program and this will continue into Q3 with the aim o f
yielding shallow oxide resources.
Allied is focused on optimizing the oxide mineral inventory at Sadiola, aiming to enhance the mine's value by leveraging
ongoing exploration successes.
Bonikro
Bonikro produced 20,496 ounces of gold during the three months ended June 30, 2024 , compared with 21,511 ounces
produced in the comparable quarter of the previous year . Second quarter production represented an increase over first
quarter production, by over 10%. Production increased sequentially despite the challenges and the impact of the observed
power issues in-country. The power issues also resulted in a stockpile increases as ore mined exceeded ore processed, and
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the stockpile build provides future flexibility and availability of ore to process. Had the power delivery issues not occurre d,
the Company expects that production at Bonikro would have been higher by approximately 5,175 ounces of gold.
As part of the Company's broader objective of becoming more self -reliant, backup generators were successfully installed in
the second quarter at its Côte d'Ivoire operations for an initial unbudgeted cash outlay of $14.1 million. This investment,
spread across its in -country operations, effectively mitigated future power reliability risks. Côte d'Ivoire continued to
experience issues at some of its power generation plants during the second quarter , leading the mining industry to reduce
consumption by intermittently shutting down processing plants while power generation equipment was restored to the grid.
In addition to the immediate installation of generators, the Company is also discussing a turnkey solar power solution with a
solar power provider.
The sequential increase in gold production over the first quarter resulted from focused mining in the Bonikro Pit, which
improved mine -to-plan compliance and increased the mined grade. The recovery rate was in line with expectations.
Consistent positive mining performance has ensured mining sequencing remains on plan.
Several other opportunities to optimize the plant further are being pursued, including, but not limited to operational and
maintenance practices, comminution circuit optimizations, increased gravity gold recovery, better slurry density, and
viscosity control practices. Several are already implemented or studied, and will ultimately allow for mill rate
improvements, and more predictability of throughput and recoveries. During the second quarter, the sizing screen panels
were changed and modified from 40mm to 35mm, improving the mill rate considerably, by almost 9%, with the current ore
blend. The Company expects to provide updates on further initiatives later this year .
At Bonikro, expected cost reductions are to be achieved through the normalization of production with the more self-reliant
power strategy. However , as expected and guided, Bonikro's sustaining capital and AISC(1) in the second quarter were
impacted by capitalized stripping at Pushback 5 ("PB5"). The stripping activities being carried out during the year will
improve production and costs for the next few years, as high grade ore will be exposed while significantly lower waste
removal is planned. The classification of stripping costs to sustaining capital was changed in the fourth quarter of 2023, with
first production from the pushback achieved in that quarter. Prior year comparative costs associated with PB5, which did
not have any ore production in the second quarter of 2023, were deemed as expansionary capital and consequently did not
impact AISC(1). Further, the increase in depreciation and amortization from the comparative prior quarter is related to
amortization of the PB5 expansionary deferred stripping, which commenced in the fourth quarter of 2023.
During the second quarter, gold sales were slightly lower than production due to timing of production and shipments.
At Bonikro, the stripping of PB5 during 2024 is expected to expose higher -grade materials in 2025 and 2026. Although the
cost profile for 2024 reflects those activities, they will significantly reduce the mine -site AISC(1) to below $1,050 per ounce
by the end of the outlook period.
Previously provided production guidance from Côte d'Ivoire is not expected to change in the Company's guidance and
outlook periods.
Mineral Resource and exploration drilling was conducted during the quarter on the Company's mining licenses and
exploration licenses. A total of 223 holes for 20,582 metres was drilled by seven exploration drill rigs. With the following
drilling activity split across the properties:
At the Hire mine, core drilling to the WSW of the Agbale prospect, which is expected to be processed at Agbaou,
underneath and adjacent to the Akissi -So waste rock dump was completed during the quarter . The program has been
successful in identifying a high -grade vein-style target that was previously unrecognised and represents an underground
style target for resource growth. Two rigs were moved to the area immediately west of the Assondji-So pit around the ROM
pad and are exploring mineralised trends defined in historical drilling and artisanal workings. This program was in progress
at quarter end and initial results and shallow oxide intersections are encouraging, demonstrating at least 160 metres of
strike of a mineralised shear. This area of the mine will be the focus of exploratory and resource infill drilling in the thi rd
quarter .
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At the Oume Project, drilling continued at the Dougbafla West and North deposits designed as infill to convert inferred
resources to indicated resources, with the work at Dougbafla West focused on the oxide portion of the resource.
On the wider Hire and Agbaou MLs a target generation exercise began with the commencement of field programs at the
Ditula prospect and prioritisation of other targets known from historical sampling programs.
On the Bonikro ML and EL no work programs were undertaken.
Agbaou
For the three months ended June 30, 2024 Agbaou produced 15,855 ounces compared to 18,663 ounces in the comparative
prior period, an decrease of 15%. The decrease is predominantly due to the impact of the observed in-country power issues.
Had the power delivery issues not occurred, the Company expects that production at Agbaou would have been higher by
approximately 3,450 ounces of gold. With most mine pits nearing the end of the pushback cycle, improvements in stripping
ratios, ore mined, and grades have been noted, with expectations for continued enhancements in upcoming quarters. In
particular , the upcoming mining sequence and the mining of South Sat 3 will result in increased grades, which contribute to
the expected and guided strong second half of the year production. The completion of mining oxides and transitional ore
across all pits has led to a shift towards a higher ratio of fresh material mining, contributing to reduced mining rates. The
decreased mill throughput resulted from lower ore availability and the processing of harder ore compared to the same
quarter last year, though recoveries benefited from the resultant extended leach contact time due to lower throughput.
A series of actions continue to enhance mining performance at Agbaou, including improvements to the dewatering
infrastructure and better management of the mining contractor. The Company is also studying processing plant upgrades to
increase ore feed flexibility. Furthermore, efforts to develop new oxide deposits like Agbale have been accelerated, with
mining currently underway.
Gold sales during the quarter were generally in line with production.
Costs for the second quarter were impacted by the inclusion of Agbale ounces, and in particular the costs of sustaining
capital expenditures related to its development, which are disproportionate to the production levels. However , with the
Côte D’Ivoire complex now being with the same contractor , the Company expects synergies and the reduction of costs going
forward. At Agbaou, expected cost reductions are to be achieved through the normalization of production after the
aforementioned contractor changeover in the first quarter, process optimizations, and the normalization of the power
matters. Had the power delivery issues not occurred, the Company expects that production at Agbaou would have been
higher by approximately 3,450 ounces of gold.
The Company remains confident on meeting its annual mine plan. The blend ratio feeding the Agbaou plant remains critical
with quality oxide ore, which resulted in accelerating the mining plan of Agbale Phase 2 into production, which has
continuously delivered on grade, and has provided significant flexibility in the first quarter for the Agbaou plant blended ore
requirements.
The Company is focused on extending the life of its mines in Côte d'Ivoire through strategic exploration and resource
management, with new life -of-mine planning at Agbaou supporting a total gold production strategic goal of over 465,000
ounces through 2028 at a mine-site AISC(1) below $1,450 per ounce versus the most recent life-of-mine estimate which saw
mining cease in mid-2026.
During the quarter , extensive Mineral Resource and exploration drilling activities were undertaken on Agbaou's mining
licenses, with 65 holes for a total of 8,003 metres.
At Agbaou, exploratory drilling at North Pit Extension was completed, with core drilling demonstrating deeper extensions of
fresh rock mineralisation. First pass drilling was completed at the Agbaou South prospect, with initial intersections
generated in line with historical RC drilling. A program of core drilling is underway to better understand the controls on
mineralisation and better target follow-up drilling.