Gold-Rich Africa Offers Faster Permitting and Lower Costs, Says CEO

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Allied Gold Corp. (AAUC:TSX; AAUCF:OTCQX) has positioned itself as a player in Africa's mining industry, leveraging the continent's rich mineral resources while navigating the socio-economic and geopolitical landscape. The company's operations are primarily in open-pit mining, which is more cost-effective compared to deeper, hard-rock mining required in other regions such as Canada and Australia.

According to Allied Gold's CEO, Peter Marrone in a recent call with Streetwise Reports, Africa's vast mineral wealth offers significant opportunities, with approximately 30% of the world's precious metals sourced from the continent. He emphasized that much of this mineralization is near the surface, allowing for easier extraction and lower operational costs.

The company has focused on maintaining strong local relationships, an approach Marrone believes differentiates Allied Gold from other miners operating in Africa. He noted that economic nationalism, where governments seek to maximize the benefits of their natural resources for local economies, is an increasing trend worldwide.

"We want to build local industry, suppliers, and supply chains and support the regions where we operate," Marrone explained in his Streetwise Reports call. He acknowledged the challenges associated with geopolitical risks but pointed out that, in many cases, permitting processes in Africa are significantly faster than in North America, allowing projects to advance more efficiently.

In Mali, where Allied Gold operates, the company is engaged in expansion efforts, particularly at the minela project. The first phase of expansion, which involves a transition from softer oxide ore to harder rock, is expected to be completed by the third quarter of 2025. This expansion is projected to bring sustainable production levels to approximately 200,000–230,000 ounces of gold per year.

Stifel reiterated its Buy rating on Allied Gold with a target price of CA$6.50.

Recent events in Mali, including the government's seizure of US$290 million in gold from Barrick Gold Corp.'s (ABX:TSX; GOLD:NYSE) Loulo-Gounkoto complex, have raised concerns about state intervention in the country's mining sector. The Malian government has intensified efforts to renegotiate contracts and claim back taxes from foreign operators, a move that has impacted multiple mining companies.

Despite this, Marrone expressed confidence in Allied Gold's position, emphasizing the company's proactive approach to local engagement. "We've taken the time to build relationships and ensure our operations benefit the communities we're in," he stated. Unlike other firms facing disputes over tax and resource control, Allied Gold has prioritized maintaining constructive partnerships with local authorities.

Marrone also noted that while some investors perceive these geopolitical shifts as risks, others see them as opportunities. "We're seeing increased interest from groups willing to navigate this environment," he said, suggesting that new players are emerging to fill the gaps left by companies hesitant to operate under these evolving conditions.

Allied Gold also has ongoing developments in Ethiopia, particularly the Kurmuk project, which Marrone describes as a "multi-billion-dollar enterprise." The company anticipates providing progress reports throughout the year as it moves toward full-scale production.

"Once completed, the optionality of that asset will be fully realized," Marrone stated. Additionally, the company has committed to frequent exploration updates, citing the abundant gold mineralization in its mining regions.

Experts on Allied Gold

In a December 20 report, Canaccord Genuity reiterated its Buy rating on Allied Gold Corp., maintaining a price target of CA$9.00. The firm highlighted the company's solid funding position following a US$43.75 million milestone payment from Wheaton Precious Metals under a US$175 million streaming agreement, as well as a US$75 million gold prepay arrangement.

Canaccord estimated that Allied Gold's pro forma financing of approximately US$500 million, along with an undrawn US$100 million credit facility, would be sufficient to complete the construction of the Kurmuk project. The report emphasized that Allied's development is on track, with the first gold production at Kurmuk expected in Q2 2026. Canaccord valued the company using a 50/50 blend of a 0.5x multiple on NAV and a 4.0x multiple on 2025E EBITDA, reflecting the company's geopolitical risk profile and development project weighting.

On January 22, Stifel reiterated its Buy rating on Allied Gold with a target price of CA$6.50, noting that Q4 production met expectations, positioning the company well for strong growth in 2025. Stifel estimated that Korali-Sud ore at Sadiola would serve as a key production bridge ahead of Sadiola Phase 1's expansion, which is expected to increase throughput to 5.7Mtpa in 2026. The firm also recognized Kurmuk as a value driver, with the total company production run-rate set to exceed 600,000 ounces annually by mid-2026. Stifel noted that Allied Gold was trading at a discount, with a 0.19x P/NAV multiple, compared to peers at 0.46x. 

National Bank Financial maintained its Outperform rating on Allied Gold in a report from January 22, setting a target price of CA$7.75.

National Bank Financial maintained its Outperform rating on Allied Gold in a report from January 22, setting a target price of CA$7.75. The firm pointed to Q4 production of 99.6k ounces, driven by a standout performance at Sadiola, where Korali-Sud oxide ore contributed significantly.

The firm noted that Sadiola cost improvements were expected as production ramped up and that Allied's cash balance exceeded US$340 million at year-end, bolstered by Korali gold sales and a US$75 million gold prepay agreement.

National Bank Financial viewed Kurmuk's development as on track and within budget and emphasized that the remaining investment for Sadiola Phase 1 was $55 million, with completion targeted by Q4 2025. The firm estimated that for every US$100/oz increase in gold price, Allied could generate an additional $90 million in cash flow over the 2024-2028 period.

H&P Research published a positive outlook on Allied Gold, emphasizing Sadiola's strong Q4 performance in a January 23 report, which slightly exceeded expectations. The firm estimated 2025 production at 491,000 ounces, with a site-based AISC of US$1,407/oz. H&P noted that Kurmuk's construction was progressing as planned, with US$100 million in capex spending in 2024 and the first production targeted for H2 2026. The report valued the company at CA$10.80 per share, implying a 204% upside to the current share price. The valuation was based on a 0.85x multiple of NAV, underpinned by a long-term gold price assumption of US$2,100/oz.

Last year, John Newell of John Newell & Associates provided technical analysis on Allied Gold, outlining a series of price targets in his August 23 chart. His analysis set an initial target of CA$3.80, followed by CA$4.60, CA$5.50, and a "big picture" target of CA$7.65.

As of his January 30th update to his chart, Allied Gold has already met and exceeded the first target of CA$3.80, reaching and surpassing the second target of CA$4.60. The updated chart reflects increased trading volume and a breakout from prior resistance levels, suggesting continued momentum in the stock.

Newell's technical assessment highlights a strengthening trend in Allied Gold's stock performance, with the next targets of CA$5.50 and CA$7.65 remaining in focus.

Gold's Resurgence: Rising Prices and Renewed Investor Confidence

In a January 22 report, Robert Sinn of Goldfinger Capital observed that while the gold mining sector underperformed in the fourth quarter, over the full year in 2024, certain miners experienced gains exceeding 100% due to key valuation inflection points and production ramp-ups. He noted, "The profitability outlook for the sector has never been better, and in many ways, the sector has never been better positioned than it is today." 

By January 24, Barry FitzGerald of Stockhead highlighted Australia's booming gold sector, pointing to the significant impact of record-high gold prices on project valuations. He explained that higher gold prices had dramatically improved the financial outlook for development-stage projects, making them more attractive investment opportunities.

On January 28, Stewart Thomson of 321Gold weighed in on the technical outlook, acknowledging short-term volatility due to economic events such as the Federal Reserve meeting and upcoming inflation reports. He remarked, "Gold could easily trade well under Monday's low," but he maintained that the long-term trend remained intact, with gold's role as a financial hedge continuing to strengthen.

A few days later, on January 30, Kitco's Gary Wagner described gold's latest surge as part of a "global economic perfect storm." He noted that April gold futures had reached US$2,852.40, a record high, following market volatility and a weaker U.S. dollar. Quoting Sprott Managing Partner Ryan McIntyre, Wagner wrote, "The latest rally in gold prices likely reflects a combination of rising uncertainty about U.S. policies and a weaker dollar following the disappointing fourth-quarter GDP report."

That same day, Dominic Frisby took a broader perspective on gold's rally in his Flying Frisby report, emphasizing the role of central banks, particularly in Asia, in sustaining price momentum. He pointed out that China alone had imported 124 tonnes of gold in November and had accumulated over 1,000 tonnes since the start of the Russian asset freeze. He suggested that "central banks are obviously preparing for a multipolar world in which the dollar's role as a reserve asset will be gently reduced."

Factors Driving Allied Gold

Several upcoming catalysts are expected to shape Allied Gold's trajectory in 2025. The company is preparing to release its 2025 guidance in late February, which will provide insights into expected production levels, capital expenditures, and strategic initiatives. Additionally, ongoing discussions with SOREM, the Mali state-owned mining company, may result in potential mining opportunities the company could pursue in in the vicinity of Sadiola and other highly prolific areas in Mali.

The Kurmuk project in Ethiopia remains a major focal point, with progress reports expected throughout the year. This large-scale operation, once operational, could significantly enhance Allied Gold's production profile and cash flow generation. Meanwhile, the Sadiola mine expansion in Mali, with its planned US$55 million investment in 2025, is set to be completed by the fourth quarter. This expansion will ensure a smoother transition to harder rock mining while maintaining strong production levels. 

Exploration remains a critical component of Allied Gold's strategy, with expectations of resource and reserve increases by year-end. Marrone expressed confidence in the company's ability to replace and even grow its reserves beyond what has been mined, reinforcing its long-term sustainability. "There is gold literally everywhere," he said, underscoring the company's exploration potential.

Looking ahead, Allied Gold anticipates incremental improvements in production efficiency and cash flow as it executes its expansion and development plans. The combination of ongoing growth initiatives and a favorable permitting environment positions the company to capitalize on Africa's abundant mining opportunities.

Ownership and Share Structure

According to Refinitiv, 30.56% of Allied Gold Corp is owned by Institutions with the largest being held by Orion Resource Partners (USA) LP with 11.6%, followed by BlackRock Investment Management at 5.88%, Mackenzie Investments with 1.96%. Then it's Banker Steel Capital Managers LLP and Boston Partners, each holding 1.89%. 

Management and Insiders have 17.82%. Of those, Peter J. Marrone holds 4.69%, and Daniel Racine 1.17%. Strategic Investors have 8.39%. Those are Knightsbridge Capital Corp at 5.85% and The Emprise Special Opportunities Fund (2017) at 2.54%. The rest is retail. 

Allied's market cap is currently US$150 billion  with 204.53 Free Float Shares. Their Its 52 week range is CA$2.6900 - 4.6750.