Allied Gold Corporation press release
ALLIED GOLD REPORTS SECOND QUARTER 2025 RESULTS: SOLID PRODUCTION AND PROGRESS ON GROWTH PIPELINE
TSX - Toronto Stock Exchange · Gold · Canada
Canada NewsWire
TORONTO , Aug. 6, 2025 /CNW/ - Allied Gold Corporation (TSX: AAUC) (NYSE: AAUC) ("Allied" or the "Company") reports second quarter of 2025 production of 91,017 gold ounces which aligns with plan, represents an increase of 8.3% from last quarter, and positions the Company to meet its guidance for the year as presented below.
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SECOND QUARTER HIGHLIGHTS
Operational Highlights
Production, Costs and Guidance: The Company produced 91,017 ounces of gold in the second quarter, in line with plan, positioning the Company to meet its guidance for the year. In the first half of the year, the Company continued implementing improvements to its operations, and undertook a series of operational enhancements and strategic initiatives aimed at delivering a materially stronger going forward, beginning in the second half of the year. These included confirmatory drilling of high-grade areas, continued refinement of block models and grade-control processes, progressive mobilization of new mining equipment at Sadiola for material improvement of fleet availability and productivity, changes to mine management hiring experienced local management including in Mali , and continued advancing stripping at Bonikro and Agbaou to access higher grade ore in the second half of the year and next, with increased operational flexibility. These initiatives provide further confidence to guidance, with production expected on the basis of 55% in the second half of the year by comparison of 45% in the first half of the year. Third quarter production is anticipated to be comparable to the second quarter, while fourth quarter production is expected to be meaningfully higher at 118,000 to 122,000 ounces, driven mainly by higher grades. The increase in production in the second half of the year, along with operational improvements and mine sequencing, is expected to drive meaningful cost improvements. Sales of 81,103 gold ounces. Timing of final shipments resulted in 9,914 oz of gold production in Q2 that was sold in July for revenue of $30 million that will be recognized in the third quarter. Total cost of sales (4) , cash costs (1) and All-in Sustaining Costs ("AISC") (1) per ounce sold of $2,294 , $2,034 , and $2,343 , respectively (which include royalties based on higher gold prices and the amount for increased waste removal at Agbaou which will result in higher production in H2 and next year). The Company expects costs to be in line with annual guidance taking into account higher gold prices on operating costs with the previously disclosed gold price-based royalties. Second half AISC (1) is anticipated to decrease and be approximately $1,850 , based on a $3,000 gold price, from the normalization of timing of sales, higher production and the benefit of disproportionate operating and stripping costs in the first half. Further, the ongoing benefits from cost control and reduction programs, the completion and commissioning of Phase 1 along with further upside from potential oxide discoveries at Sadiola which provide relatively inexpensive high-quality ounces, progressive cost improvements quarter-over-quarter are expected. The impact on cash flows is magnified in the fourth quarter, when production is guided to meaningfully increase. Results for the first half of the year and expectations for the second half of the year are summarized as follows:
| | Q1 2025 | Q2 2025 | Q3 2025 | Q4 2025 | | Production ounces | 84,040 | 91,017 | 88,000 - 91,000 | 118,000 - 122,000 | | AISC (1) | $ 1,811 | $ 2,343 | Second half of year at approximately $1,850 | |
Performance by Asset: At Sadiola, production during the quarter was 49,283 ounces and included continued contributions from the Korali-Sud zone, demonstrating the significant production upside that new oxide orebodies can provide to Sadiola in anticipation of the start of production of the first phase expansion in the fourth quarter. At Bonikro, production was 25,775 ounces driven by higher grade ore mined from PB3, and improved throughput and recovered grade in the process plant. At Agbaou, production was 15,959 ounces. Following a plan for longer term optimization and increases in mine life, the Company prioritized waste removal over ore extraction to manage storm-water inflows into the pit and to secure access to higher-grade ore in the second half of 2025 as well as to support increased operational flexibility and production levels in 2026. While waste movement is expected to continue at similar levels for the remainder of the year, ore feed, gold grades and production are expected to materially increase quarter over quarter, resulting in reduced costs and increased cash flows in the second half of the year. Consequently, annual production for Agbaou, and the benefits in the second half of the year, results in a production expectation at the mid-point of guidance of approximately 83,500 ounces.
Expansion of Exploration Success: Due to ongoing exploration successes and proven delivery of results, the Company has committed a further $17 million in exploration spending. Of this total $5.7 million is allocated for Sadiola, as the Company believes it can increase inventory meaningfully, including finding new oxide ounces. At Côte d'Ivoire (CDI) an additional $7.5 million has been allocated to pursue opportunities to extend the mine life by increasing Mineral Reserves through sustained drilling and other exploration efforts. At Kurmuk, an additional $3.7 million was added to the exploration budget to support the Company objective of achieving an inventory of 5 million gold ounces. Total year exploration expenditure is now expected to be approximately $37 million . The Company anticipates providing updates for Sadiola in October, Kurmuk in November and CDI in January of 2026.
Financial Results Highlights
Earnings: Second quarter net loss of $25.4 million or $(0.22) per share. Second quarter adjusted earnings (1) of $16.2 million or $0.14 per share.
Cash Flows and EBITDA Net cash generated from operating activities for the quarter was $22.0 million . Operating cash flow before income tax paid and movements in working capital was a strong inflow of $116.0 million . EBITDA (1) and Adjusted EBITDA (1) for the three months ended June 30, 2025 , were $23.0 million and $71.7 million , respectively.
Strong Financial Position: As of June 30, 2025 , the Company had cash and cash equivalents of $218.6 million . The Company has immediately available credit of $50.0 million (inclusive of a $10.0 million accordion) under its revolving credit facility, which remains undrawn. In addition to available credit, the Company has liquidity available through future draws on the Kurmuk gold stream. Available liquidity, coupled with an anticipated step change in production and commensurate cost reduction for the remainder of the year resulting in additional flexibility from increased cash flows, positions the Company to execute on Kurmuk's remaining capital expenditures.
Advancement of Key Growth Initiatives
Kurmuk : The Company continues to track well against plan for the Kurmuk Project, both in terms of physical completion and spend, having continued to achieve key milestones and progress during the second quarter of 2025. The Company is well-positioned to achieve the goal of commencing production by mid-2026. Being less than a year away from first production, the Company is advancing technical studies aimed at improving operational confidence and flexibility, including potential increases in plant throughput among other improvements and targeted optimizations.
At the end of the second quarter, Engineering and Procurement have achieved approximately 90% progress. Transportation of key equipment is advancing well, with delivery to site of key components such as the Carbon -in-Leach ("CIL") tanks and grinding mills. Structural fills at the plant terrace were completed. Key areas, including crushing, grinding, and leaching, were handed over to the civil works contractor, allowing rebar installation and concrete works. Key bulk earthworks progress outside the process plant area was achieved ahead of the rainy season. Structural, Mechanical, Plate and Piping (SMPP) contractor fabrication is progressing well, and development of the main accommodation camp is nearing completion. Mobilization of the mining fleet is ongoing with the site delivery expected imminently, and mining pioneering was completed during the quarter.
For the quarter ended June 30, 2025 , $71.3 million was spent on the Kurmuk project, comprising direct construction capital expenditures and exploration activity.
The Company remains positioned to achieve the next milestones, which include:
Bulk mining activities start in third quarter 2025 Completion of engineering in third quarter 2025 Mechanical erection ramp-up in third quarter 2025 in CIL area CIL area completed in first quarter 2026 Power line completion in first quarter 2026 Commissioning start in second quarter 2026 First gold in second quarter 2026
A November update is planned for Kurmuk Mineral Resources and Mineral Reserves, in relation to the infill drilling effort carried thus far to support the start of mining activities, along with an exploration update on the different targets throughout the property. The Company expects Kurmuk to produce an average of 290,000 ounces per year for the first four years and 240,000 ounces per year on average for the mine's life, with AISC (1) below $950 per ounce.
Sadiola Phased Expansion: The first phase of expansion at Sadiola advanced on schedule and on budget during the second quarter. Earthworks, civil works and structural fill, along with engineering and procurement, are progressing well with engineering and procurement essentially complete. The first components of the modular three-stage crushing plant have been shipped to site, and preparatory earthworks in the area have commenced. The mill motor has landed on site, as have the mill components. The first batch of structural steel has arrived on site and erection will commence imminently. Major mechanical equipment, including the cyclones and pumps are en route and will arrive on site for installation during the third quarter. The current third quarter focus will be on installation of structural steel and mechanical equipment allowing for follow-on completion of the electrical, control and instrumentation installation scope and commissioning in the fourth quarter.
Continued investment in the first phase expansion, including planned plant modifications and infrastructure upgrades, is consistent with prior estimates at $70 million in 2025. The first phase plant expansion involves installing additional crushing and grinding capacity in one of the processing plant lines, which will be dedicated to treating fresh ore. These modifications will allow Sadiola to treat up to 60% of fresh rock at a rate of up to 5.7 Mt/y in the modified process plant. With the completion of the first phase expansion, Sadiola is expected to produce between 200,000 and 230,000 ounces of gold per year in the medium term, ahead of the next expansion phase.
The Phase 2 Expansion, planned as a new processing plant to be built beginning in late 2026 and dedicated to processing fresh rock and oxides at a rate of up to 10 Mt per year, targeted to start production in late 2028, is expected to increase production to an average of 400,000 ounces per year for the first four years and 300,000 ounces per year on average for the mine's life, with AISC (1) expected to decrease to below $1,200 per gold ounce.
Strategic Initiatives Highlights
Allied executed a number of strategic transactions and initiatives during the second quarter, reinforcing a fortress balance sheet, further improving the Company's financial flexibility, enhancing trading liquidity and broadening the shareholder base. The transactions include:
Sadiola Strategic Arrangements
In the process of reviewing its power needs and overall power supply strategy, particularly in relation to Sadiola, the Company engaged with several parties over the course of the year, and it previously announced that it was negotiating a broader arrangement that included a power supply agreement and a sale of a portion of the Company's ownership in Sadiola with Ambrosia Investment Holding ("Ambrosia"). Subsequently, the Company also received a proposal from a third party for the purchase of a portion of Sadiola, on comparable terms. While the Company continues discussions relating to possible broader corporate transactions with Ambrosia and others, Allied has determined that selling any portion of Sadiola should not be undertaken at this time, and the pursuit of a power solution for Sadiola should be undertaken independently of broader corporate or asset level transactions. In addition to available independent power solutions being better priced and scaled, there has been considerable advancement with Sadiola that supports considerably greater value.
The Company has significantly advanced its analysis of power supply requirements for various expansion scenarios at Sadiola following the Phase 1 expansion. It has made substantial progress in assessing and negotiating the implementation of robust, proven, self-sufficient, pure-power solutions with experienced African power generation specialists. These solutions are tailored to the phased expansion approach at Sadiola, allowing for the progressive implementation of sustainable and reliable off-grid solutions. These pure-power solutions will enable the Company to deploy the optimal renewable energy penetration rate for each stage of the expansion project, improving energy supply reliability at all times, and achieving meaningful medium-term savings over the next five years, while remaining competitive in the longer term compared to the Ambrosia proposal, which had a higher capital intensity associated with a large-scale solar plant covering the requirements of the Phase 1 expansion, that led to meaningfully higher costs of power in the short to medium term.
Given the results of this process and the strategic relevance of self-reliant power supply, which has become a stated goal of the government in Mali , the Company has decided to advance the implementation of a self-reliant power generation solution for the site. This enables the Company to pursue an optimal solution for Sadiola, in collaboration with specialized and renowned partners, and where the Company also holds a significant ownership interest in the energy infrastructure. The Company is currently completing negotiations with a select group of companies for the long-term supply of energy to Sadiola. The solutions propose a phased deployment of a combination of off-grid thermal generation and solar-battery energy sources, offering a competitive levelized cost of energy compared to previous studies and the market. Allied expects to settle the framework agreements imminently and complete contract negotiations by the beginning of the fourth quarter of 2025. Amongst the many advantages of this solution, it creates more efficiency than pure solar alone, is cost effective and it is scalable to accommodate the larger expansion of Phase 2, or the incremental expansions between Phases 1 and 2 whose technical studies are being completed.
The Company concluded that it is able to execute its development strategy for Sadiola without the need to divest any stake in the asset, retaining ownership and gold-price leverage of a high-quality asset and exploration portfolio that has increased in value since the beginning of the year. Sadiola continues to stand out as a Tier-1 asset, underpinned by a strong operational base, significant mineral reserves and a leading production growth profile.
This confidence, and reasons to maintain full ownership of the asset and seek better terms with another power-solution partner, is supported by gold prices being substantially higher than at the time of engagement with the above-mentioned parties which significantly appreciates the value of the asset, the ongoing Phase 1 expansion being well advanced and on track for first gold production this year, improvements in governmental and other similar stakeholder engagements in Mali , a significantly improved and improving business environment in country, improved mine plans and management of the asset, and the advancement of engineering studies to assess the merits of a progressive expansion after Phase 1. This progressive approach targets reduced capital requirements in the medium term, leveraging the existing processing infrastructure. Furthermore, Allied is advancing test-work and engineering studies aimed to meaningfully increase metallurgical recoveries through the implementation of flotation and concentrate leaching as an add-on to the project. In addition to these technical studies and opportunities aimed at unlocking significant value and optionality, Allied has made significant progress on developing new oxide targets near mine, and is actively pursuing their conversion to mineral inventories and potential development, supported by an increased exploration budget and drilling program at Sadiola, focused on near-plant oxide opportunities.
As noted, Allied has positioned itself as a reliable partner with the Malian government, being the first company to adopt a new mining protocol in light of the 2023 mining code. The Company continues advancing discussions with SOREM ( Mali state-owned mining company) to pursue potential mining opportunities in the vicinity of Sadiola and other highly prolific areas in Mali . While definitive arrangements have not been concluded at this time, the Company is in advanced discussions and is encouraged with the prospects under evaluation and the cooperativeness and ongoing engagement with in-country authorities.
With all of these regional, economical and technical factors considered, the Company believes that the implied value of Sadiola has increased significantly during a time coincident with the Company's conclusion that pursuing a self-reliant independent and optimized power solution is a better way to create value.
New York Stock Exchange Listing: Allied began trading on the NYSE under the ticker symbol AAUC on June 9, 2025 . Allied believes that listing on the NYSE will provide the Company with, among other things, access to a broader investor audience, increased sources of potential capital, improved trading liquidity in Allied's common shares, and increased research coverage from U.S. investment banks. Finally, the listing is expected to provide the opportunity for broader index inclusion. Common Share Consolidation: In May of 2025, and in connection with the Company's application to list its common shares on the NYSE, the Company completed a share consolidation on the basis of one post-consolidation common share for every three pre-consolidation common shares outstanding. Bought Deal Public Offering and Concurrent Block Trade: During the quarter, in April of 2025, the Company successfully closed on a bought deal public offering, and a significant shareholder of the Company completed a concurrent block trade transaction of common shares owned by such shareholder. The offering was for an aggregate of 17,250,000 common shares at a price of C$5.35 per share (on a pre-consolidation basis) for aggregate gross proceeds of $66.8 million and net proceeds of $61.9 million .
Enhancing market liquidity remains a key objective for the Company. Over the past 18 months, average daily trading volume, measured over a 20-day period, has increased approximately ninefold. The significant shareholder's block trade and the Company's offering further improved trading liquidity in advance of the Company's listing on the New York Stock Exchange. These transactions also support broader index inclusion and additional investor interest, all of which should help the Company's share price better reflect the Company's intrinsic value per share.