Allied Gold partners with UAE’s Ambrosia Investment to enhance its Sadiola gold mine operations in Mali. The agreement involves selling a 50% stake in its Mali operations for $750 million, including a $145 million upfront payment. This collaboration will create a joint venture and aims for significant production increases while also implementing renewable energy solutions.
Canadian mining firm Allied Gold has established a strategic partnership with Ambrosia Investment Holding, an investment fund based in the UAE, to enhance the value extraction from its Sadiola gold mine located in Mali. Under this agreement, Allied Gold will sell a 50% stake in its Mali operations, Allied Gold ML (Allied Holding), to Ambrosia. The valuation of this 80% interest in the mine’s operating company, Societe d’Exploitation des Mines d’Or de Sadiola SA (SEMOS), is set at $750 million (C$1.08 billion).
The transaction will comprise an upfront cash payment of $145 million at the closing of the deal, along with deferred cash payments amounting to $230 million. This partnership will create a 50:50 joint venture between Allied Gold and Ambrosia for the management of Allied Holding and SEMOS. Allied Gold will retain operational control over SEMOS, focusing on ongoing operational effectiveness and value enhancement at the Sadiola mine.
Ambrosia’s regional expertise in Africa, especially through its UAE connections, will enhance Allied Gold’s operational capabilities. The financial backing from this strategic partnership will significantly bolster Allied’s balance sheet, offering necessary flexibility for growth initiatives, including the Kurmuk project in Ethiopia and Sadiola’s expansion. The phased expansion strategy for the Sadiola mine aims to ramp up production from around 170,000 ounces in 2023 to between 200,000 and 230,000 ounces annually.
Another stage of the mine’s expansion is planned to be finished by late 2028, targeting production rates of 400,000 ounces per year initially, reducing thereafter to 300,000 ounces annually over 19 years based on 7.2 million ounces of mineral reserves. This partnership will also introduce innovative renewable power solutions to minimize costs and lessen environmental impact.
Allied will issue roughly 12% of its shares to Ambrosia at a premium, generating $156.55 million for Sadiola’s expansion. Ambrosia plans to boost its ownership stake in Allied Gold to 19% via private placement shares and market purchases. This strategic alliance is pending final agreement negotiations and regulatory approvals, with the private placement anticipated to conclude around March 17, 2025.
Ambrosia chairman Ahmed Amer Al Amry noted, “We have been looking for some time at establishing an alliance with a high-quality precious metals mining company. We have found that in Allied Gold with its impressive portfolio of assets and management team. We are excited to be a shareholder and will continue to support the efforts of the company.”
The strategic partnership between Allied Gold and Ambrosia Investment Holding marks a significant advancement for both parties, aiming to enhance mining efficiency and profitability at the Sadiola gold mine. With a structured cash investment and a new joint venture, the collaboration intends to leverage expertise for future expansions and operational improvements, ultimately bolstering Allied’s financial standing and market position in the gold mining sector.
Original Source: www.mining-technology.com
