ALLIED Gold Corp. said on Thursday it had sold forward gold production until 2027 in a streaming deal with Triple Flag International, raising $53m for its West African mines.
Peter Marrone, chairman and CEO of Allied Gold said in a statement the streaming deal implied a valuation to the firm’s shares higher than its initial public offering last year and “significantly better” than other capital-raising options, including equity financing.
Cash used from the streaming deal will be ploughed into exploration and optimisation programmes at Allied’s Agbaou and Bonikro situated in Côte d’Ivoire. The company, listed in Toronto, also owns the Sadiola mine in Mali.
Allied Gold has guided to production of up to 405,000 ounces of gold this year and has an organic growth plan to get to 620,000 oz in 2026 while it is targeting output of 700,000 oz to 800,000 oz by 2029. Agbaou was bought from Endeavour Mining in 2021. The mine is operated in a single complex (CDI) with another operation, Bonikro.
In terms of the streaming deal, Triple Flag will buy 3% of payable gold from each of Agbaou and Bonikro, stepping down to 2% of Agbaou and Bonikro after delivery of 29,000 and 39,300 oz from the mines respectively.
Triple Flag will make ongoing payments of 10% of the spot gold price for each ounce delivered under the streams which are subject to certain minimum deliveries.
In addition, Allied Gold is arranging a minimum $250m funding package for Kurmuk, a development project situated in western Ethiopia, on the back of the gold streaming deals for the CDI assets.
Commenting in February, Marrone said the West African gold industry was ripe for consolidation. :Why do we have so many single asset companies producing between 100,000 oz and 200,000 oz of gold annually? Why should this continent not have a champion producing a couple of million ounces a year?” he asked.
“Assuming the quality of assets to be there then size matters more than it did in the past. Money goes to where there is opportunity and money needs liquidity.
“There should be more consolidation. We want to be one of those proponents of consolidation and an agent of change,” he said.
