ALLIED GOLD ANNOUNCES FIRST QUARTER 2025 RESULTS: ACHIEVING STRONG QUARTERLY PRODUCTION, ADVANCING OPTIMIZATIONS AND GROWTH PROJECTS

2025-05-07

TSX - Toronto Stock Exchange · Gold · Canada

Canada NewsWire

TORONTO , May 7, 2025 /CNW/ - Allied Gold Corporation (TSX: AAUC) (OTCQX: AAUCF) ("Allied" or the "Company") reports first quarter of 2025 production of 84,040 gold ounces at total cost of sales (4) , cash costs (1) and All-in Sustaining Costs ("AISC") (1) per ounce sold of $1,838 , $1,656 , and $1,811 , respectively. Production and costs were aligned with mine plans, positioning the Company to meet its guidance for the year. Sales of 131,520 gold ounces included 48,939 gold ounces of gold produced from Korali-Sud that were in inventory as at December 31, 2024 , and were sold in the first quarter of 2025 as previously disclosed.

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FIRST QUARTER HIGHLIGHTS

Financial Results Highlights

Earnings: First quarter net earnings of $15.1 million or $0.05 per share. First quarter adjusted earnings (1) of $45.1 million or $0.14 per share.

Cash Flows and EBITDA Net cash generated from operating activities for the quarter was $121.1 million . Operating cash flow before income tax paid and movements in working capital was a strong inflow of $100.8 million . EBITDA (1) and Adjusted EBITDA (1) for the three months ended March 31, 2025 , were $103.2 million and $133.8 million , respectively.

Strong Financial Position: As of March 31, 2025 , the Company had cash and cash equivalents of $232.3 million . Subsequent to quarter end, Allied successfully closed on a bought deal public offering for total gross proceeds of $66.8 million , further enhancing the Company's strong balance sheet.

Operational Highlights

First Quarter Production: The Company produced 84,040 ounces of gold in the first quarter, in line with expectations, positioning the Company to meet its guidance for the year. As previously guided, production for the year is expected on the basis of 45%/55% for weighting between the first and second half, with the fourth quarter expected to be meaningfully higher than the first three quarters of the year. Performance by Asset: At Sadiola, production during the quarter was 45,232 ounces and included significant 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 19,671 ounces driven by stronger throughput and operational improvements. At Agbaou, production was 19,137 ounces driven by higher grades in WP3 Satellite Pit and increased throughput at the process plant, and supported by a strong mining performance and optimizations. This quarter highlights the flexibility of Allied's Côte d'Ivoire ("CDI") operations in mining and processing ore and extracting value from various sources within the complex, as stripping activities continue to advance, which will drive the increase in production planned for the second half as previously guided.

Costs on Track : AISC (1) for the quarter was $1,811 per ounce. Costs for the first quarter tracked in line with or better than budget and annual guidance provided, particularly when taking into consideration that every $100 per ounce increase in the price of gold results in $15 per ounce higher AISC (1) , which was guided on a $2,500 per ounce gold basis. Consequently, at a realized price in excess of $2,800 for the first quarter, this impacted AISC (1) by approximately $50 per ounce on a consolidated basis, while at Sadiola it impacted AISC (1) by approximately $65 per ounce.

Advancement of Key Growth Initiatives

Kurmuk : The Company continues to track well against plan for the Kurmuk Project, having achieved key milestones and progress during the first quarter of 2025. The Company is well-positioned to achieve the goal of commencing production by mid-2026.

At the end of the first quarter, earthworks and structural fills at the plant terrace were near completion. Key areas, including crushing, grinding, and leaching, were handed over to the civil works contractor, which progressed rebar and concrete activities according to plan. Steel fabrication is progressing well, and the mechanical contractor completed its first phase of mobilization and advanced the erection of ancillary structures. Engineering and procurement reached 80% completion in the quarter, and transportation of major equipment to site is underway. Mining pioneering was advanced during the quarter and is ahead of schedule.

For the quarter ended March 31, 2025 , $56.2 million was spent on the Kurmuk Project, comprising direct construction capital expenditures and exploration activity.

A third quarter 2025 update is planned for Kurmuk Mineral Resources, Mineral Reserves and exploration to demonstrate Kurmuk's potential for extension of mine life, taking advantage of the increased plant capacity. 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 broke ground in the fourth quarter of 2024 and advanced on schedule and on budget during the first quarter. Earthworks and structural fill, along with engineering, procurement, and mobilization for mechanical contractors, progressed well during the quarter and in line with the timeline to start production in the fourth quarter of 2025.

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.

Financing and Strategic Initiatives Highlights

Allied successfully executed a number of strategic transactions and initiatives during and subsequent to the first quarter, creating a fortress balance sheet, further improving the Company's financial flexibility, enhancing trading liquidity and broadening the shareholder base. The transactions include:

New York Stock Exchange Listing: Allied is pursuing a listing on the New York Stock Exchange ("NYSE") and has reserved the ticker symbol "AAUC" in connection with the proposed listing. The Company is advancing its listing application and expects to be listed on the NYSE by mid-June, 2025; however, there can be no assurance that it will receive listing approval from the NYSE to complete such listing. 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.

Bought Deal Public Offering and Concurrent Block Trade: Subsequent to quarter end, the Company successfully closed on a bought deal public offering and a significant shareholder of the Company completed a concurrent block trade 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 for aggregate gross proceeds of $66.8 million and net proceeds of $64.0 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. Each of the significant shareholder's block trade and the Company's offering are expected to further improve trading liquidity in advance of the Company's planned 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.

The Company intends to use the net proceeds from the offering to fund its optimization and growth initiatives, including advancing studies and engineering work to improve recoveries at Sadiola, supporting exploration and mine life extension studies in Côte d'Ivoire, and conducting additional exploration and development activities across its broader asset portfolio. The proceeds of the offering are expected to assist the Company in accelerating value creation from these assets and activities.

Sadiola Strategic Arrangements: Among the matters for strategic review in 2024, the Company reviewed its power supply strategy for Sadiola with the objective of increasing its energy self-reliance, reducing its dependence on fossil fuels, and optimizing the asset's long-term cost structure, while aligning with the State of Mali support of mining companies improving self-generation capacity and putting less demand on the national grid. Allied also sought to improve its regional and national competencies and in-country relationships in support of its growth initiatives and optimize its Mali operations with the ultimate objective of enhancing shareholder value. In this context, the Company considered that one of the potential arrangements would be to create a joint venture at Sadiola that would also support funding its expansion plans.

The Company engaged with possible strategic partners with strong technical and financial capabilities as well as regional and national experience and competencies. Ambrosia Investment Holding ("Ambrosia"), an Emirati entity, was one of these parties and soon became the most advanced in the process. Ambrosia expressed a strong interest in creating an alliance that included power generation and acquiring an indirect interest in Sadiola. On February 25, 2025 , the Company announced a strategic partnership with Ambrosia comprising a private placement, the purchase of 50% of Allied's indirect interest in SEMOS (the operating company that directly owns the Sadiola mine) and related joint venture agreement, and a long-term power supply arrangement to provide power to Sadiola.

On April 11 , with the expiry of an extended period of price protection provided by the Toronto Stock Exchange, the Company determined not to proceed with the private placement although Ambrosia indicated, and has continued to indicate, a willingness to continue advanced discussions relating to the joint venture and long-term power supply arrangement for Sadiola. Both Ambrosia and the Company have begun to engage in discussions with Malian authorities relating to these arrangements and those discussions are progressing. While the Company is committed to advancing to conclusion the arrangements with Ambrosia the Company has received a proposal from another party for a similar arrangement that would provide for the purchase of a smaller interest in Sadiola, although otherwise on comparable terms as those in the Ambrosia arrangements. This proposal is not as advanced as the arrangements with Ambrosia although the Company is advancing discussions relating to the proposal. In addition, as the Company continues assessing its power supply strategy, it has expanded the scope of review in light of the Government of Mali's encouragement to increase energy self-reliance in mining operations. As a result, the Company has begun discussions with the Malian authorities and private power providers for a broader power solution for Sadiola, sponsored by Allied, and in which the Company would be an investor and the purchaser of power under a suitable power purchase agreement.

As the Company evaluates all of these alternatives and opportunities regarding Sadiola, it continues advancing its ongoing optimizations and expansion projects, with the first phase expansion expected to be completed on budget and schedule later this year, and the second phase expansion will follow after that, as noted above.

Zero-Cost Collar Execution: On May 7, 2025 , the Company completed a gold price protection program that ensures a minimum price of $3,048 per ounce and full upside to $4,000 per ounce on gold production of 15,500 ounces per month from June 2025 through to March 2026 , equalling a total of 155,000 ounces. Inclusive of already existing gold production under preceding gold price protection through March of 2026, this represents approximately 75% of total production in that period, thereby ensuring higher margins and cash flows as the Company completes the development of Kurmuk.

Other Developments

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 encouraged by the prospects under evaluation and discussion and with the cooperativeness and ongoing engagement with in-country authorities.

Sustainability, Health and Safety Highlights

The Company did not report any significant Environmental Incidents for the three months ended March 31, 2025 . The Company's Total Recordable Injury Rate (TRIR) was 0.40 for the quarter, compared to a TRIR of 1.40 in the comparative prior year period. The Company reported one Lost Time Injury in the first quarter, resulting in Lost Time Injury Rate of 0.20, compared to a LTIR of 0.29 in the comparative prior year period.

Summary of Operational Results

| | For three months ended March 31, | | | 2025 | | Gold ounces | | | Production | 84,040 | | Sales (8) | 131,520 | | Per Gold Ounce Sold | | | Total Cost of Sales (4) | $ 1,838 | | Cash Costs (1) | $ 1,656 | | AISC (1) | $ 1,811 | | | | | Average revenue per ounce | $ 2,814 | | Average market price per ounce* | $ 2,860 |

| *Average market prices based on the LBMA PM Fix Price |

Gold production of 84,040 ounces during the three months ended March 31, 2025 , was in line with expectations, with all mines having strong first-quarter performance. As previously disclosed, production for the year is expected to follow a 45%/55% weighting between the first and second half, with the fourth quarter being the strongest of the year.

The mine-site level cost of sales, cash costs (1) , AISC (1) for the quarter ended March 31, 2025 were $1,838 , $1,656 , and $1,811 , all on a per ounce basis. Costs for the first quarter tracked in line with or better than budget and annual guidance provided, particularly when taking into consideration that every $100 per ounce increase in the price of gold results in $15 per ounce higher AISC (1) , which was guided on a $2,500 per ounce gold basis. Consequently, at a realized price in excess of $2,800 for the first quarter, this impacted AISC (1) by approximately $50 per ounce on a consolidated basis, while at Sadiola it impacted AISC (1) by approximately $65 per ounce.

Further, during the first quarter, to take advantage of higher gold prices and an objective to maximize gross margin and cash flow, the Company deliberately mined more ounces at Korali-Sud, despite the higher government and third-party royalty burden compared with Sadiola of an additional cost of $200 per ounce, to achieve higher overall production ounces and financial metrics. In the quarter, Korali-Sud grade was over 1.5 g/t, where Sadiola was roughly 1.0 g/t, and therefore, by maximizing tonnes from Korali-Sud, the Company obtained more ounces and higher absolute gross margins, rather than producing fewer ounces from Sadiola at a lower royalty burden. As previously disclosed, the 2023 mining code is expected to impact costs at Sadiola by approximately $240 /oz to $300 /oz, and at Korali-Sud, the cost exceeds this range given that it is a new mining operation and is subject to the full impact of the 2023 mining code without derogations of royalties, unlike production from Sadiola proper. Korali-Sud ore is a bridge to sustained higher production at better costs while the Company continues to explore and develop new oxide discoveries in the Sadiola permit area and completes the Phase 1 expansion later this year. Beginning in the third quarter, production is expected to shift from Korali-Sud to ore sources at Sadiola, including the newly discovered Sekekoto West oxide deposit. In the fourth quarter, the first phase expansion is expected to ramp up, the result of which will be that production is expected to stabilize at a level of 200,000-230,000 ounces per year. The Company's guidance on production and costs for Sadiola remains unchanged.

Gold sales (8) of 131,520 ounces for the quarter ended March 31, 2025 compared to 85,136 ounces sold in the comparative quarter. The variance is predominantly due to Korali-Sud gold production at Sadiola from the fourth quarter, sold during the first quarter, as previously disclosed.

Average revenue per ounce generally diverges modestly from the average market price due to the impact of ounces delivered under the streams.

Sadiola (80% interest), Mali

Sadiola comprises the Sadiola (80% interest) open pit gold mine, located in the Kayes region of Mali , as well as the Korali-Sud open pit gold mine (65% interest), 15 kilometres south of the processing plant at Sadiola. The remaining ownership in Sadiola is retained by the Government of Mali .

| Sadiola Key Performance Information

(100% Basis) | For three months ended March 31, | | 2025 | | | Operating | | | Ore mined (M tonnes) | 1.98 | | Waste mined (M tonnes) | 6.06 | | Ore processed (M tonnes) | 1.17 | | Gold | | | Production (Ounces) | 45,232 | | Sales (Ounces) | 92,033 | | Feed grade (g/t) | 1.36 | | Recovery rate (%) | 89.3 % | | Total cost of sales per ounce sold (4) | $ 1,941 | | Cash costs per ounce sold (1) | $ 1,755 | | AISC per ounce sold (1) | $ 1,799 | | Financial (In thousands of US Dollars) | | | Revenue | $ 234,445 | | Cost of sales (excluding DDA) | (152,416) | | Gross profit excluding DDA (1) | $ 82,029 | | DDA | (10,375) | | Gross Profit | $ 71,654 | | Capital Expenditures (In thousands of US Dollars) | | | Sustaining | $ 1,109 | | Expansionary | 3,051 | | Exploration | 113 |

For the three months ended March 31, 2025 , Sadiola produced 45,232 ounces. Production in the first quarter continued to include a significant contribution from ore tonnes from the higher-grade Korali-Sud zone, demonstrating the production upside that high-grade oxides can provide to Sadiola. As previously disclosed, Korali-Sud is a bridge to sustained higher production at better costs while the Company continues to explore and develop new oxide discoveries in the Sadiola permit area and completes the Phase 1 expansion later this year. Beginning in the third quarter, production is expected to shift from Korali Sud to ore sources at Sadiola, including the newly discovered Sekekoto West oxide deposit.

Process plant instrumentation upgrades have progressed well in the first quarter of 2025 with improvements resulting in an increase in throughput of an additional 20,000 tonnes during the quarter. Further enhancements to the process plant automation are planned to deliver improvements in reagent consumption and ultimately drive cost reductions. The process plant instrumentation upgrades will be further augmented with the implementation of the Phase 1 expansion.