Allied GOLD Announces Third Quarter 2023 Results: Marking a New Era as a Public Company and the Start of Asset Optimizations and Robust, Fully Funded Growth Initatives Across Its Portfolio
NEWS RELEASE
ALLIED GOLD ANNOUNCES THIRD QUARTER 2023 RESULTS: MARKING A NEW ERA
AS A PUBLIC COMPANY AND THE START OF ASSET OPTIMIZATIONS AND ROBUST,
FULLY FUNDED GROWTH INITATIVES ACROSS ITS PORTFOLIO
TORONTO, ON – November 9, 2023 ─ Allied Gold Corporation (TSX: AAUC) (“Allied” or the “Company”)
is herei n reporting its financial and operational results for the third quarter of 2023. Production totaled
84,473 gold ounces (“oz”) with sales of 91,164 oz at total cost of sales, cash costs (1) and all-in sustaining
costs (“AISC”) (1) per gold ounce sold of $1,593, $1,424, and $1,546, respectively. The current quarter
marked a significant transformation and evolution of Allied’s corporate structure, as the Company
completed its public listing and begins executing its operational optimization and growth strategy. This
growth strategy, which is underpinned by fully permitted and shovel -ready projects, will be developed in a
sequenced and phased approach to optimize capital spend while delivering a compounded increase in
cash flow and profitability.
The Company expects the fourth quarter to show sequential improvement over the current period, which
was impacted by expenses related to the business combination and the ongoing transformation. Notably,
the current management team assumed their positions d uring the final month of the third quarter, making
the upcoming quarter the first full period under new leadership. Despite these transitional challenges, as
anticipated, a progressive increase in the number of ounces produced has occurred year -to-date.
Production in the first quarter was 78,617 oz, after which several efforts were undertaken to stabilize and
normalize production in the second and third quarters in a range of 84,000 -86,000 oz, and the Company
expects the strongest quarter of the year in the fourth quarter at over 100,000 oz. With this, the Company
expects that annual production will be in the range of 350,000 to 360,000 oz, as previously disclosed.
Mostly, the ability of the Company to reach the higher end of the range depends on the performance at
Agbaou, which is under going an operational review and transformation. Initiatives have been undertaken
to improve the shorter and longer -term performance of Agbaou, and certain step s to improve long term
performance and value , such as contract mining management, process optimizations and life of mine
planning are being actioned on. These initiatives are expected to impact short-term production but bring
significant benefit to the long-term performance and sustainability of the asset.
Current producing mines should reasonably be expected to produce at least 375,000 oz per year on a
sustainable basis, although with an increase anticipated during the next several years following the
execution of optimization and brownfield growth initiatives being pursued at all operations. In particular, the
Company expects increased production during 2024, and then further into 2025, before a step increase in
production from significant growth projects that are expected beginning in 2026.
THIRD QUARTER HIGHLIGHTS
Financial Results – Strong Liquidity to Support Growth Initiatives
• Third quarter net loss(2) of $194.6 million or $0.98 per share basic and diluted.
• Adjusted net earnings(1)(2) of $1.4 million or $0.01 per share basic and diluted, largely reflecting the
non-recurring nature of transaction related expenses and one -off items during the Company’s
transition to a public company.
• Cash flows from operating activities of $2.2 million for the three months ended September 30, 2023.
• Excluding the transaction related items, and their working capital movement impact, net cash
generated from operating activities would go from the reported $ 2.2 million to $3 5.5 million on a
normalized basis.
• Cash flows from operating activities are expected to increase in the fourth quarter, with increased
production contributions and lower costs driving sequential improvements.
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• Cash and cash equivalents totalled $ 198.6 million. Furthermore, the Company expects to have
financing available under a three -year $100 million facility, to provide additional financial flexibility
for the execution of the Company’s business plan.
Operational Results – Sustainable Production Base Set for Improvement
• Production of 84,473 oz . Sequential improvements expected in the fourth quarter to be driven by
increased equipment performance at Sadiola, completion of Stage 1 stripping, along with ahead-
of-schedule dewatering, at Bonikro and higher rates of ore mined at Agbaou.
• Total cost of sales, cash costs (1) and AISC(1) per gold ounce sold of $1,593, $1,424, and $1,546,
respectively.
• Allied has begun developing an optimization plan encompassing a series of enhancements at
existing mines to improve efficiency and costs across all the Company's operations. These
enhancements include among others, upgraded and improved power generation facilities, plant
instrumentation upgrades, enhanced procurement and supply chain processes and improved
management and other contractor interactio ns to drive improved and consistent mining
performance. These efforts complement ongoing exploration initiatives aimed at extending mine
life, primarily at the Company’s mines in Côte d'Ivoire as well as expanding the inventory of oxide
ores at Sadiola.
Board Approval of Key Growth Initiatives
• The Board of Directors approved the advancement of the expanded Kurmuk project through a two-
phase development plan, bolstered by the strategic consolidation of the minority interest, bringing
the Company’s ownership to 100%(3). While the project requires a total capital investment of
approximately $500 million, the first phase, with a commitment of $185 million to be spent through
2023 and 2024, includes key milestones such as engineering, early works, major equipment
procurement, civil and earthworks, key infrastructure progression, camp establishment, mining
contractor mobilization, and pre -stripping at Ashashire among others . Upon completion of this
phase, the Company will assess further optimizations before proceeding with the remaining capital
allocation. The expanded project aims for average annual production of nearly 275,000 oz for the
first four years and over 240,000 oz per year over a 10-year mine life at an AISC(1) targeted below
$950/oz. The development is to be funded by cash on hand, including from the recent financing,
and cash flows from producing mines, with the first gold pour expected in Q2 2026.
• The Board approved the advancement of the Diba Project, located 15 km south of the Sadiola Gold
Mine, with a total capital allocation of $12 million in 2023 and 2024 including expenses for an access
road to transport ore to the Sadiola plant with initial ore processing targeted for H1 2024. Diba's
high-grade oxides are set to enhance Sadiola's production, and expected to reduce costs, improve
margins, and increas e cash flows, supporting the Company's growth strategy during Kurmuk's
development. The acquisition of Diba, where mining is expected to begin in the second quarter of
2024, aligns with Allied's plans to maximize oxide ounces at Sadiola and to expand in established
mining jurisdictions where it has deep technical, geological, and operational expertise.
• The Board of Directors has approved the Phase 1 Expansion of Sadiola, entailing a total capital
expenditure of approximately $61.6 million, slated for implementation in 2024. This expansion
marks a significant shift for Sadiola, transitioning from oxide ore to fresh rock gold production.
Upgrades to the existing plant, originally designed for oxide ore processing, will enable it to handle
up to 60% of the total ore feed as fresh rock. As a result, Sadiola's annual gold production is
expected to rise from 17 5,000 oz to an average of approximately 200,000 oz per year between
2024 and 2028, based solely on Mineral Reserves. Short -term production enhancements will be
driven by the contribution from Diba's high -grade oxide ore, aiming for an average annual
production exceeding 230,000 oz in the next two years. Looking ahead, the Phase 2 Expansion is
on the horizon, set to commence construction in 2027. This expansion involves the construction of
a new processing plant dedicated to processing fresh rock starting in 2029. It is anticipated to
elevate production to an average of 400,000 oz per year for the initial 4 years and maintain an
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average of 300,000 oz per year over the mine's 19 -year life. AISC (1) is projected to decrease to
below $1,000 per oz.
Health, Safety and Sustainable Development
• In September, the Company released its 2022 ESG report, adhering to the Sustainability
Accounting Standards Board Standards for metals and mining. This report formally delineated the
progress and commitment made in crucial areas such as health and wellbein g, tailings
management, and generating shared value for all stakeholders.
• For the nine months ended September 30, 2023, the Company reported 4 Lost Time Injuries (“LTI”),
down from 6 LTI in the same period last year, resulting in an improved Company Lost Time Injury
Rate (“LTIR”) of 0.37(4).
OPERATING RESULTS SUMMARY
Sadiola
For the three months ended September 30, 2023, Sadiola produced 43,525 oz, compared to 47,154 oz in
the same period last year. This variation resulted from differences in mine sequencing, ore processing
quantities and metallurgical recoveries, partially offset by higher feed grade. This performance was
influenced by the planned use of the fresh rock ore stockpile as the mine operated in the transitional zone
between oxides and fresh rock. Sadiola is well positioned to achieve its production targets for 2023 of
approximately 175-180,000 oz. The Company is currently making advancements in its power generation
facilities to enhance stability and reduce costs. In addition to completing the insta llation of a new oxygen
plant to decrease costs and improve recoveries, the Company is also progressing with other improvement
initiatives at Sadiola.
The current quarter's gold sales were positively impacted by the weather -related delay in the final gold
shipment of the second quarter, totaling 8,170 oz, which was subsequently sold in July 2023.
Bonikro
During the three months ended September 30, 2023, Bonikro produced 23,628 oz. This figure remained
consistent with the prior year's comparative quarter but represented a notable increase from the 21,511 oz
produced in the second quarter. This sequential uptick was attributed to the successful inclusion of the
Akissi-so pit, leading to a significant rise in mined ore. However, this increase was partially offset by lower
recoveries, impacted by processing Akis si-so ore in the current year as opposed to the higher -recovery
stockpile processed in the prior year.
2023 2022 2023 2022
Gold ounces
Production 84,473 92,882 249,062 270,378
Sales 91,164 82,740 250,012 258,353
Per Gold Ounce Sold
Total Cost of Sales (4) 1,593$ 1,447$ 1,587$ 1,441$
Cash Costs(1) 1,424$ 1,237$ 1,426$ 1,227$
AISC(1) 1,546$ 1,333$ 1,561$ 1,314$
Average revenue per ounce 1,935$ 1,773$ 1,901$ 1,855$
Average market price per ounce* 1,928$ 1,728$ 1,930$ 1,824$
*Average market prices based on the LMBA PM Fix Price
For the three months ended
September 30,
For the nine months ended
September 30,
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Additionally, key operational milestones were achieved at Bonikro, including the completion of Stage 1
stripping, along with the dewatering of the Bonikro pit ahead of schedule. These actions are expected to
support the expected improved fourth quarter production, positioning the mine to meet its targets for 2023.
Agbaou
Agbaou produced 17,320 oz during the three months ended September 30, 2023, compared to 21,643 oz
in the same period last year . The decrease is attributable to lower ore mined, throughput and feed grade,
partially offset by increased recovery rates. Ore mined was impacted by an unusually severe rain event
which caused delays despite other quarter -over-quarter improvements. Most of the pits of the mine are in
the advanced stages of the pushback cycle, and therefore general improvements in stripping ratios and ore
mined, including grades were observed and are expected to continue for the next quarters.
A series of actions are underway 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
nearby oxide deposits like Agbali have been accelerated, with mining currently underway. Allied is also
updating the Life of Mine plan for Agbaou with the objective of significantly extending its mine life. The
results of these efforts are expected to be communicated in due course.
For the three months ended
September 30, 2023
Production
Gold Ounces
Sales
Gold Ounces
Cost of Sales
Per Gold Ounce
Sold
Cash Cost (1)
Per Gold Ounce
Sold
AISC (1)
Per Gold Ounce
Sold
Sadiola Gold Mine 43,525 51,426 1,494 1,414 1,504
Bonikro Gold Mine 23,628 21,587 1,509$ 1,107$ 1,220$
Agbaou Gold Mine 17,320 18,151 1,973 1,827 2,051
Total 84,473 91,164 1,593$ 1,424$ 1,546$
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FINANCIAL SUMMARY AND KEY STATISTICS
Key financial operating statistics for the third quarter 2023 are outlined in the following tables.
(In thousands of US Dollars, except for shares and per share
amounts) (Unaudited)
2023 2022 2023 2022
Revenue 176,685 146,930 476,017 479,951
Cost of sales (134,343) (107,164) (368,197) (328,751)
Gross Profit excluding Depreciation and amortization (1) 42,342 39,766 107,820 151,200
Depreciation and amortization (10,884) (12,524) (28,597) (43,594)
Gross Profit 31,458 27,242 79,223 107,606
General and administrative expenses (15,440) (8,052) (37,338) (23,638)
Loss on revaluation of call and put options (16,337) (2,983) (21,883) (8,948)
Loss on revaluation of financial instruments and embedded
derivatives (240) (492) (2,053) (1,103)
Impairment of exploration and evaluation asset (19,619) - (19,619) -
Other (Loss) Income (147,259) (2,985) (146,872) (2,599)
Net (loss) earnings before finance costs and income tax (167,437) 12,730 (148,542) 71,318
Finance costs (4,559) (4,397) (17,271) (21,597)
Net (loss) earnings before income tax (171,996) 8,333 (165,813) 49,721
Current income tax expense (27,187) (8,335) (47,110) (36,493)
Deferred income tax (expense) recovery 9,798 (1,025) 8,115 1,281
Net (loss) earnings and total comprehensive income
(expenditure) for the period (189,385) (1,027) (204,808) 14,509
Earnings (loss) and total comprehensive income
(expenditure) attributable to:
Shareholders of the Company (194,641) (4,908) (213,927) 3,894
Non-controlling interests 5,256 3,881 9,119 10,615
Net (loss) earnings and total comprehensive income
(expenditure) for the period (189,385) (1,027) (204,808) 14,509
Net (loss) earnings per share attributable to Shareholders of
the Company
Basic $ (0.98) $ (0.03) $ (1.14) $ 0.02
For the three months ended
September 30,
For the nine months ended
September 30,
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Third Quarter 2023 Conference Call
The Company will host a conference call and webcast on Friday, November 10, 2023 at 9:00 a.m. E ST.
Toll-free dial-in number (Canada/US): 1-800-898-3989
Local dial-in number: 416-406-0743
Toll Free (UK): 00-80042228835
Participant passcode: 3255687#
Webcast: https://alliedgold.com/investors/presentations
Conference Call Replay
Toll-free dial-in number (Canada/US): 1-800-408-3053
Local dial-in number: 905-694-9451
Passcode: 4272767#
The conference call replay will be available from 12:00 p.m. EST on November 10, 2023, until 11:59 p.m.
EST on December 10, 2023.
(in thousands of US Dollars, except per share amounts)
2023 2022 2023 2022
Net Earnings (Loss) attributable to Shareholders of the Company (194,641) (4,908) (213,927) 3,894
Net Earnings (Loss) attributable to Shareholders of the Company per share (0.98) (0.03) (1.14) 0.02
Transaction related costs 146,496 - 146,496 -
Revaluation of put and call options 16,337 2,983 21,883 8,948
Revaluation of financial instruments and embedded derivatives 240 492 2,053 1,103
Write-off of exploration and evaluation assets 19,619 - 19,619 -
Net unrealized foreign exchange (1,188) 753 370 2,908
Stock-based compensation 1,566 2,778 5,253 5,659
Other adjustments 3,596 - - -
Tax adjustments 9,409 - 9,409 -
Total Increase (decrease) to Attributable Net Earnings (Loss) (2) 196,075 7,006 205,082 18,618
Total Increase (decrease) to Attributable Net Earnings (Loss) (2) per share 0.98 0.04 1.09 0.10
Adjusted Net Earnings (Loss) (1) 1,434 2,098 (8,845) 22,512
Adjusted Net Earnings (Loss) (1) per share 0.01 0.01 (0.05) 0.12
For the three months
ended September 30,
For the nine months
ended September 30,
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Qualified Persons
Scientific and technical information contained in this news release has been reviewed and approved by
Matthew McInnes, Senior Vice President, Studies of the Company. Mr. McInnes is an employee of the
Company and a "qualified person" as defined by Canadian Securities Administrators' National Instrument
43 101 - Standards of Disclosure for Mineral Projects.
About Allied Gold Corporation
Allied Gold 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,
Mali, and Ethiopia. Led by a team of mining executives with operational and development experience and
proven success in creating value, Allied Gold aspires to become a mid -tier next generation gold producer
in Africa and ultimately a leading senior global gold producer.
For further information, please contact:
Allied Gold Corporation
Royal Bank Plaza, North Tower
200 Bay Street, Suite 2200
Toronto, Ontario M5J 2J3 Canada
Email: [email protected]
END NOTES
(1) This is a non-GAAP financial performance measure. Refer to the Non-GAAP Financial Performance
Measures section at the end of this news release.
(2) Net earnings and adjustments to net earnings represent amounts attributable to Allied Gold
Corporate equity holders.
(3) The Government of Ethiopia is entitled to a 7% equity participation in Kurmuk once the mine enters
commercial production.
(4) Calculated on a 1,000,000 exposure-hour basis.
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. In particular, forward looking information included
in this MD&A includes, without limitation, statements with respect to:
• the Company’s expectations in connection with the production and exploration, development and
expansion plans at the Company’s projects discussed herein being met;
• the Company’s plans to continue building on its base of significant gold production, development -
stage properties, exploration properties and land positions in Mali, Côte d’Ivoire and Ethiopia
through optimization initiatives at existing operating mines, d evelopment of new mines, the
advancement of its exploration properties and, at times, by targeting other consolidation
opportunities with a primary focus in Africa;
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• the Company’s expectations relating to the performance of its mineral properties;
• the estimation of Mineral Reserves and Mineral Resources;
• the timing and amount of estimated future production;
• the estimation of the life of mine of the Company’s projects;
• the timing and amount of estimated future capital and operating costs;
• the costs and timing of exploration and development activities;
• the Company’s expectation regarding the timing of feasibility or pre -feasibility studies, conceptual
studies or environmental impact assessments;
• the effect of government regulations (or changes thereto) with respect to restrictions on production,
export controls, income taxes, expropriation of property, repatriation of profits, environmental
legislation, land use, water use, land claims of local pe ople, mine safety and receipt of necessary
permits;
• the Company’s community relations in the locations where it operates and the further development
of the Company’s social responsibility programs;
• the Company’s expectations regarding the payment of any future dividends; and
• the Company’s aspirations to become a mid -tier next generation gold producer in Africa and
ultimately a leading senior global gold producer.
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 t hat could cause actual events or results to differ
materially from those projected in the forward -looking information. These factors include the Company’s
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 mar kets, particularly Africa, including risk of government
expropriation or nationalization of mining operations; health, safety and environmental risks and hazards to
which the Company’s operations are subject; the Company’s ability to maintain or increase present level of
gold production; nature and climatic condition risks; counterparty, credit, liquidity and interest rate risks and
access to financing; cost and availability of commodities; increases in costs of production, such as fuel,
steel, power, labou r and other consumables; risks associated with infectious diseases; uncertainty in the
estimation of Mineral Reserves and Mineral Resources; the Company’s ability to replace and expand
Mineral Resources and Mineral Reserves, as applicable, at its mines; factors that may affect the Company’s
future production estimates, including but not limited to the quality of ore, production costs, infrastructure
and availability of workforce and equipment; risks relating to partial ownerships and/or joint ventures at the
Company’s operations; reliance on the Company’s existing infrastructure and supply chains at the
Company’s operating mines; risks relating to the acquisition, holding and renewal of title to mining rights
and permits, and changes to the mining legislativ e and regulatory regimes in the Company’s operating
jurisdictions; limitations on insurance coverage; risks relating to illegal and artisanal mining; the Company’s
compliance with anti -corruption laws; risks relating to the development, construction and st art-up of new
mines, including but not limited to the availability and performance of contractors and suppliers, the receipt
of required governmental approvals and permits, and cost overruns; risks relating to acquisitions and
divestures; title disputes or claims; risks relating to the termination of mining rights; risks relating to security
and human rights; risks associated with processing and metallurgical recoveries; risks related to enforcing
legal rights in foreign jurisdictions; competition in the pr ecious metals mining industry; risks related to the
Company’s ability to service its debt obligations; fluctuating currency exchange rates (including the US
Dollar, Euro, West African CFA Franc and Ethiopian Birr exchange rates); the values of assets and liabilities
based on projected future conditions and potential impairment charges; risks related to shareholder
activism; timing and possible outcome of pending and outstanding litigation and labour disputes; risks
related to the Company’s investments and u se of derivatives; taxation risks; scrutiny from non -
governmental organizations; labour and employment relations; risks related to third -party contractor
arrangements; repatriation of funds from foreign subsidiaries; community relations; risks related to r elying