Allied GOLD Provides Update ON Continued Exploration Success and Project Development at Kurmuk
NEWS RELEASE
ALLIED GOLD PROVIDES UPDATE ON CONTINUED EXPLORATION SUCCESS AND PROJECT
DEVELOPMENT AT KURMUK
TORONTO, ON – June 26, 2024 ─ Allied Gold Corporation (TSX: AAUC) ("Allied" or the "Company") is
pleased to provide an update on the ongoing exploration and development activities at its Kurmuk Project
in Ethiopia. Significant exploration results continue to support the high probability of Mineral Reserves and
Mineral Resource growth, indicating substantial upside potential. The project , which remains on track for
first production in mid-2026, continues to make significant strides in both project execution and exploration
activities aimed at increasing mineral inventories, extending mine life, and enhancing overall value and
future returns to shareholders.
• Recent significant exploration results at both Dish Mountain and Tsenge confirm the high prospectivity
previously reported for the property and these near-mine targets. These results support the Company’s
objective to deliver significant Mineral Reserves and Mineral Resource growth from areas that can
extend and improve Kurmuk’s initial mine life and production profile. This, in turn, helps to achieve the
Company’s strategic goals, including reaching a minimum of five million o unces of gold in mineral
inventories at the project.
• Cumulative exploration results at the Tsenge Project highlight the potential for significant additional
economic mineralization within the project area, reinforcing Allied’s vision that Kurmuk and the
surrounding 1,269 km2 of exploration leases represent the potential for a new gold mineral province in
Western Ethiopia.
• Key project advancements in recent months build upon the planning and preparation activities started
in late 2023. These include the progress of the Engineering, Procurement and Construction
Management (“EPCM”) Early Works contract under DRA Global Limited (“DRA”), the ongoing
procurement of long-lead items and services, including the ball mill in addition to the already owned
SAG mill, and the tendering process for contract mining and bulk earthworks, among others.
The Kurmuk project is expected to achieve average annual gold production of over 290,000 ounces (“oz”)
during the first five years and maintain production of over 240,000 oz per year for the Life of Mine (“LOM”)
at an AISC (1) targeted below $950 per oz and an initial 10-year mine life based solely on current Mineral
Reserves. As reported in the press release titled “ Allied Gold Announces Positive Exploration Results at
Kurmuk’s Tsenge Gold Prospect and New Oxide Discoveries at Sadiola, Supporting the Company’s
Objectives to Extend Mine Life and Increase Production” dated April 10, 2024, the Company is advancing
highly prospective targets to significantly increase the Mineral Resources and Mineral Reserves at Kurmuk.
This aligns with the Company’s goal of achieving a minimum of five million ounces of gold in mineral
inventories at the project and pursuing a strategic LOM extending for at least 15 years at production levels
in excess of 250,000 oz per annum. The ongoing project execution in support of these targets requires
development capital of approximately $500 million, funded by available cash on hand and cash flows from
producing mines, with the first gold pour expected in mid-2026.
Exploration Update
The exploration effort at Kurmuk continues to define significant gold intersections in near -surface
mineralization, with the objective of increasing mine life and providing optionality for near-term opportunities
that could represent improvements to the LOM plan. Currently, the 2.74 million oz of Mineral Reserves are
contained entirely in the Dish Mountain and Ashashire pits. Figure 1 shows the near-mine targets identified
through detailed mapping and sampling over the past three years. This update covers t he progress of a
program aimed at confirming extensions at the Dish Mountain deposit and provides an update on the
Tsenge Prospect activities, where the Company released its maiden discovery in 2023 after beginning
scout drilling earlier last year.
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Dish Mountain Extensions
Additional diamond drilling at the Dish Mountain Deposit has highlighted the potential for further economic
mineralization from extensions to the current orebody, which contains 1.3 million oz of Mineral Reserves
within 32.7 Mt at a grade of 1.24 g/t Au, both along strike and on the flanks of the deposit. Figure 3 illustrates
the location of 16 holes, totaling approximately 4,612 meters of core drilled in late 2023. These holes
intersected mineralization beneath and adjacent to the $1,500/oz reserve pit design and the $1,800/oz
resource pit optimization shell.
Significant intersections received are reported in Table 1. Figure 4 illustrates the intersections obtained in
DMDD691 and DMDD694 in cross section. Highlights from DMDD691 include 15.3 m at 3.45 g/t Au from
223 m (true thickness 10.82 m). DMDD694, on the same section, intersected three zones: 10.2 m at 2.69
g/t Au (true thickness 9.59 m), 4.6 m at 4.31 g/t Au from 192.0 m (true thickness 2.18 m), and 3.4 m at 3.53
g/t Au from 243.5 m (true thickness 1.56 m), demonstrating the presence of numerous mineraliz ed lodes
to be targeted by exploratory drilling.
These results support the potential for extending high grade mineralization at Dish Mountain along strike
and at depth, which in turn is expected to unlock further pit expansions and increase mineral inventories.
Given the proximity to the processing plant as well and the results observed, Allied intends to deploy several
diamond drill rigs in the second half of 2024 to test these extensions and target increases in Mineral
Reserves and Mineral Resources on this already significant gold deposit. Dish Mountain and Ashashire—
the two initial open pits that encompass all current Mineral Reserves—each contribute approximately half
of the current Mineral Reserves to the Kurmuk Project.
Tsenge Exploration Update
The Tsenge gold prospect is located within the Proterozoic Kurmuk Greenstone Belt, part of the Western
Ethiopian Greenstone Belt. It is positioned along strike from the Ashashire Gold Deposit and approximately
6 km southeast of the planned Kurmuk Project p rocessing plant. Since 2022, Allied has undertaken
extensive prospecting at Tsenge, involving soil sampling, geological mapping, and channel sampling, along
with the initiation of scout diamond core drilling consisting of 124 diamond core holes to thoroughly test the
area. The aim is to extend mineralization, confirm high -grade sources of mineralization, and ultimately
increase the economic potential of the project.
Since the initial results for Tsenge, further drilling at depth has supported the potential for significant gold
mineralization, highlighted by previous surface trenching results. The current focus of exploration drilling is
the Sitola target within the Tsenge Prospect, located approximately 9 km from the planned 6.0 Mtpa process
plant, as shown in Figure 2.
Allied has drilled 24 diamond drill holes in the proposed program of 124 holes, on an initial 200 m spacing.
Assays have been received for 12 of the 24 drilled holes. Significant intersections are reported in Table 2.
Figure 5 presents the drill location p lan, and Figure 6 shows the local section for TSDD013. Notable
intersections from TSDD013 include 3.0 m at 3.76 g/t Au from 95.2 m (true thickness 2.6 m), 9.7 m at 4.92
g/t Au from 100.9 m (true thickness 8.6 m), 4.1 m at 4.27 g/t Au from 122.7 m (true thickness 3.61 m), 8.6
m at 7.73 g/t Au from 133.4 m (true thickness 7.6 m), and 6.2 m at 6.90 g/t Au from 183.9 m (true thickness
5.0 m).
These additional drill results, which build on the previously disclosed soil sampling, geological mapping,
and channel sampling, confirm broad gold mineralization with economic grades in hard rock at the surface
and at least up to 200 m vertically below the outcrop. These findings indicate that the gold-in-soil anomaly
of greater than 100 ppb Au is derived from significant gold grades of greater than 1.0 g/t Au in rock,
consistent with the Company's experience at the Dish Mountain and Ashashire gold deposits. Furthermore,
drilling to date has intersected multiple zones on individual section lines, with continuity to be tested by
further drilling. Initial results and ongoing mapping from channel sampling show a 50 -meter-wide gold-
bearing zone with multiple in dividual drill hole intersections of up to 12 meters true thickness near the
surface with grades over 1.0 g/t Au. This confirms the robust exploration model and the prospectivity of
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Tsenge. Considering the scale of the anomaly defined on the Tsenge Ridge line —with the core anomaly
covering a strike of 5.4 km—this indicates a substantial mineralized zone which the Company is advancing.
The drilling results demonstrate the potential for large tonnage economic gold mineralization at this prospect
and its potential to increase mineral inventories and extend the mine life of Kurmuk. These positive
exploration results at Tsenge support the po tential for expanding the mineral inventory at this target and
across the entire Kurmuk Project, where other similar targets and anomalies have been identified. Allied
Gold is applying the same proven and efficient exploration model to these areas to underpin an expanded,
long-term production outlook. This strategy aims to enhance the overall asset base of Allied Gold, aligning
closely with the strategic goal of creating long-lasting value for its stakeholders and achieving a minimum
of five million ounces of gold in mineral inventories at the Kurmuk Project.
Project Development Updates
As previously released, construction activities at the Kurmuk Project commenced through a two -phase
development plan, bolstered by the consolidation of the minority interest, bringing the Company's ownership
to 100%. The Company is pursuing an expanded pro ject involving an upgrade of the processing plant's
capacity from 4.4 million tonnes per year ( Mt/a) to the confirmed design of 6.0 Mt/a. This expansion, as
indicated in the 2023 Front End Engineering and Design, leverages major equipment already owned by the
Company and provides flexibility to exploit the attractive exploration upside of the property while reducing
implementation risks and capital intensity.
The Company is pleased to provide an update on the Kurmuk construction activities:
• Execution Planning: During the first quarter of 2024 the Company completed execution planning and
preparation activities, which included mobilizing the EPCM contractor to the site, advancing detailed
engineering, formalizing, and executing the procurement plan.
• Engineering and Procurement: Activities are progressing well under DRA and the Allied team. The
project remains focused on completing critical path packages and executing the procurement of long-
lead items. The ball mill order has been placed and is expected to be delivered by mid-next year, and
with the SAG mill already owned, the longer lead time items are either already dealt with or in progress.
Other key packages are progressing according to schedule, with key tenders issued to the market and
in the pr ocess of being awarded, including contract mining services and bulk excavations, among
others.
• Construction and Local Engagement: Significant progress has been made in the construction phase.
The construction water dam, built by a local earthworks contractor under DRA’s supervision, has been
completed on schedule and 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. Successful
engagement with local contractors has provided flexibility to ensure steady progress.
• Local Stakeholder Engagement: The Company is dedicated to fostering strong community
relationships and strengthening its social license for Kurmuk. Several initiatives have been advancing
with national, regional, and local stakeholders to leverage the overwhelming support for the proje ct
from local stakeholders and to continue advancing construction activities while creating the framework
for future operations.
• Operational Readiness: 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 July, 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.
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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 achieving first production in mid-
2026 and 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.
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Figure 1 – Kurmuk Near Mine Prospect Map
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Figure 2 – Dish Mountain Extension Drilling and Tsenge Drilling Location Plan
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Figure 3 – Dish Mountain Southwest Extension Drilling Location Plan
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Figure 4 – Dish Mountain Southwest Extension Drilling Cross Section 8,180mN