African Gold Co. Has Significant Re-Rating Potential
Research Report

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Disclosures for Cormark Securities, Allied Gold Corp., January 23, 2025

The analyst viewed the material operations of Allied Gold Corp.. The company paid for certain travel expenses related to a site visit by the analyst. This report has been prepared by Cormark Securities Inc., which is regulated by the Canadian Investment Regulatory Organization ("CIRO"). Cormark Securities Inc. and, its wholly owned affiliate, Cormark Securities (USA) Limited (collectively "CSI") are in compliance with CIRO and the Financial Industry Regulatory Authority research report rules and regulations where they apply. The firm does not receive compensation for any non-securities or non-investment banking related services. Neither the analyst nor the associate (if any), or any member of his/her household, serve as an officer, director or employee or serve in any advisory capacity of the subject company(ies) under their coverage. CSI actively solicits investment banking business, including underwriting and advisory services, from its research coverage list. As a result, although uncertain, revenue from these activities may be received at any time. All relevant disclosures required by regulatory rules (including CIRO) and Cormark's recommendation statistics and research dissemination policies can be obtained at www.cormark.com. Cormark will provide, upon request, a statement of its financial condition and a list of the names of its Directors and senior officers.

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In a January 23, 2025 research note, Cormark Securities analysts Nicolas Dion and Nolan Wilson maintained a Buy (Speculative) rating on Allied Gold Corp. (AAUC:TSX; AAUCF:OTCQX) with a CA$6.50 target price, following Q4 2024 production results that were in line with revised guidance but impacted by timing of sales.

The company produced 99,632 ounces in Q4 2024, within the revised guidance of 98,000-102,000 ounces. Sadiola contributed 54,210 ounces, including 48,000 ounces from Korali-Sud oxides, while the CDI complex produced 45,422 ounces. Full-year 2024 production of 358,091 ounces fell below the revised guidance of 360,000-375,000 ounces.

Pro-forma site-level AISC in Q4 2024 is expected to be "not more than US$1,780/oz" versus estimates of US$1,678/oz, with higher costs attributed to Korali-Sud. The company noted that "AISC at Sadiola will be US$240-300/oz higher than previous due to the 2023 mining code."

The Kurmuk construction and Phase 1 expansion at Sadiola remain on schedule and budget, with approximately US$55 million remaining investment for the first phase expansion expected to complete by Q4 2025. Kurmuk capex for 2024 was approximately US$100 million, below original estimates.

The analyst notes Allied trades at approximately 0.27x NAV at US$2,500/oz gold, well below peers, suggesting significant re-rating potential if successful with development projects in Ethiopia and Mali. However, investors "will need to be comfortable with the jurisdictions involved and will require patience as it remains in the early innings of Kurmuk's construction."

The share price at the time of the report of CA$3.55 represents a potential return of 83% to Cormark's CA$6.50 target price.