Allied Gold Corp. partners with UAE’s Ambrosia Investment Holding, selling part of its subsidiary for US$145 million cash plus US$230 million over six years. This joint venture will operate the Sadiola mine and strengthen Allied’s financial standing. The deal includes a solar energy agreement to reduce costs and a significant equity investment for mine expansion.
Toronto-based Allied Gold Corp. has entered into a partnership with UAE’s Ambrosia Investment Holding, selling half of its subsidiary for US$145 million in cash and US$230 million to be paid over six years. This subsidiary, which owns the Sadiola mine in Mali, will operate as a joint venture, enhancing Allied’s financial stability with this strategic collaboration.
Peter Marrone, chairman and CEO of Allied, notes the geopolitical significance of this partnership, stating that “The United Arab Emirates is a very large investor in Africa. My understanding is that they’re a bigger investor in Africa than the Chinese.” This relationship is expected to bring added credibility and influence in the region.
Allied Gold, previously a private entity, was restructured in 2023 by former Yamana Gold management. The company operates three open-pit mines across Mali, Ivory Coast, and Ethiopia and produced 258,000 ounces of gold in the nine months ending September 30. Despite losses exceeding US$112 million in the period, it is investing in modernization and growth.
Mali presents significant political risks for mining due to recent military coups and a low score in Transparency International’s Corruption Perceptions Index. However, Allied has successfully renewed its 10-year exploitation permit for Sadiola, showcasing its capability to cooperate with the Malian government, which retains a 20% stake in the mine.
Allied’s collaboration with Ambrosia includes an energy agreement with UAE company ATGC LLC, set to provide solar energy to the Sadiola mine starting in July 2026. Marrone states this partnership will reduce costs to 16 US cents per kilowatt-hour compared to current diesel generators, significantly lowering operational expenses.
Furthermore, Allied will issue over 46 million shares to Ambrosia, resulting in a 12% ownership stake and generating $156.5 million for mine expansion. Ambrosia plans to increase its stake but will not exceed 19% without Allied’s consent. This strategic infusion of capital reinforces Allied’s ambitions for growth in a challenging market.
Allied Gold Corp.’s partnership with Ambrosia Investment Holding enhances its financial position and operational capacity in Mali. By securing a reliable energy source and capital for expansion, Allied is poised to navigate the challenges of the Malian mining landscape more effectively. The collaboration also leverages the UAE’s significant investment clout in Africa, promising a more stable venture amid political uncertainties.
Original Source: www.theglobeandmail.com
