Why Experts Like This Co. Producing Gold in Africa

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Allied Gold Corp. (AAUC:TSX; AAUCF:OTCQX), based in Ontario, Canada, has exploration, development, and production projects and assets in mining-friendly jurisdictions in Africa.

"[The company] presents a compelling opportunity for investors looking for exposure to a growth-focused gold producer with a strong asset base and experienced leadership," wrote John Newell of John Newell & Associates in a Feb. 4 report. Newell is a seasoned market veteran with more than 40 years of experience. "As gold prices continue to rise, shareholders could see substantial value creation in the months ahead, and because of that, Allied remains a top choice in the precious metal sector."

One of Allied's projects, Sadiola, is a producing open-pit gold mine in western Mali with a 19-plus-year  life. The first phase of a mine expansion is underway to facilitate processing of 60% more fresh ore, at a rate of 5,700,000 tons per year. Completion of the expansion is slated for Q4/25.

Bonikro and Agbaou are Allied's operating mills, 20 kilometers apart, in Côte d'Ivoire. These, plus several open-pit deposits in the Birimian gold belt, comprise the company's Côte d'Ivoire Complex.

Allied's development-stage asset is Kurmuk, a permitted gold project under construction in western Ethiopia. The target for first production there is H2/26.

"[The company] presents a compelling opportunity for investors looking for exposure to a growth-focused gold producer with a strong asset base and experienced leadership," wrote John Newell of John Newell & Associates.

"Kurmuk is set to be the first large-scale, modern gold mine built in the country," wrote Carey MacRury, Canaccord Genuity analyst, in a Dec. 6 research report.

Most recently, Allied released preliminary production figures, reported Stifel Analyst Ingrid Rico on Jan. 22. The miner's Q4/24 production totaled 99,600 ounces (99.6 Koz) of gold, which met quarterly guidance. Of this total, Sadiola accounted for 54.2 Koz, as it benefitted from higher-grade ore from Korali-Sud, a trend that should continue this year. The Côte d'Ivoire Complex was responsible for 45.4 Koz of the quarter's production. During all of 2024, Allied produced 358 Koz of gold.

What to Know About Allied

Based on Allied's Q4/24 production results, Hannam & Partners Analyst Jonathan Guy raised his target price on the producer by nearly 2%. His new target suggests a 127% potential return for investors.

Two factors benefitting Allied, wrote Guy on Jan. 23, are its strong balance sheet and now concluded agreement with the Malian government.

"Allied is evaluating other opportunities in Mali with Sorem, the Malian state mining company, both near to Sadiola and elsewhere in the country," added the analyst.

Stifel Analyst Rico, in her research report, pointed out Allied's growth prospects. The company should increase total production to more than 600 Koz per annum over the next three years, she wrote, with completion of the Sadiola phase one expansion increasing throughput in 2026 and Kurmuk coming online in the same year.

"We see Allied Gold becoming the growth name in the space, offering investors valuation rerate potential as the company derisks organic growth, delivers on cost optimizations driving near-term increasing cash flows and, over the midterm, a portfolio that provides the foundation for potential further consolidation/mergers and acquisitions (M&A)," Rico commented.

The analyst rates the company Buy and has a price target on it, implying a 37% return.

Based on Allied's Q4/24 production results, Hannam & Partners Analyst Jonathan Guy raised his target price on the producer by nearly 2%. His new target suggests a 127% potential return for investors.

Newell highlighted in his recent report that Allied, along with its strong assets in pro-mining locales, has an experienced leadership team with a proven track record and expertise in capital markets, financing, and M&A. This group took Yamana Gold Inc. (YRI:TSX; AUY:NYSE; YAU:LSE) from a single-asset operation to a 1,000,000-ounce senior gold producer.

With Allied, these executives are adhering to a disciplined strategy to expand the company's resource base, grow production at lower costs, strengthen profitability and boost free cash flow, all through optimizing existing mines, exploring aggressively, acquiring strategic assets and advancing projects. Another priority for the miner is sustainability, in terms of minimizing effects on the environment and developing positive relationships with local communities. 

"In a rising gold price environment, these initiatives provide additional upside potential," Newell wrote.

As for Allied's stock, Newell noted it climbed past his first and second technical targets, CA$3.80 and CA$4.60, respectively, a recovery that speaks to its strong fundamentals. Newell's next price target for Allied is CA$5.50 per share, reflecting 16% upside from the current share price.

"Despite trading below past highs, [Allied's] current valuation remains attractive for investors," wrote Newell. "Continued interest from top brokerage firms reinforces the case for further upside."

Cormark Securities Analyst Nicolas Dion pointed out in a Jan. 23 research report that Allied's two development projects, the Kurmuk construction and the Sadiola phase one expansion are on schedule and on budget.

The stock, wrote the analyst, is "very inexpensive on our net asset value (about 0.27x at US$2,500 per oz [US$2,500/oz]), well below peers and even most developers, which highlights the significant room for a rerating if it is successful in its development projects in Ethiopia (Kurmuk) and Mali (Sadiola)."

Dion reiterated his Buy rating and target price on Allied, the latter reflecting a potential 37% return.

National Bank of Canada Analyst Don DeMarco wrote in a Jan. 22 research report that Allied's total capital expenditures in 2024 were below the original estimate.

"Our investment thesis is supported by Allied's growth trajectory and cost reductions with sight lines for elevated free cash flow and a buoyant internal rate of return," DeMarco commented. "We estimate about US$90 million-plus cash flow added over the 2024-2028 development/expansion period for each US$100/oz increase in gold price."

The analyst has an Outperform rating on Allied. His price target indicates a 63% uplift.

Cormark Securities Analyst Nicolas Dion reiterated his Buy rating and target price on Allied, the latter reflecting a potential 37% return.

Canaccord Analyst MacRury likes Allied's streaming agreement with Wheaton Precious Metals Corp. (WPM:TSX; WPM:NYSE), describing it in his Dec. 20 research report as an "attractive, nondilutive source of financing" and an endorsement of Kurmuk and Ethiopia as a mining jurisdiction. Already, Wheaton paid the first US$43.75M tranche of the total upfront payment it owes of US$175M.

"Based on our model and price deck, we estimate the value for the stream equates to about 0.7x net present value discounted at 7%," the analyst wrote. "We estimate a 9% internal rate of return at US$2,000/oz, 12% at US$2,250/oz and 16% at spot."

Also, Allied secured a US$75M gold prepay agreement with a group of lenders in exchange for delivering 2,802 ounces of gold per month over 12 months starting in October 2026.

"We estimate pro forma financing of about US$500M that, along with operating cash flow and an undrawn US$100M credit facility, leaves the company well-funded to complete the construction of Kurmuk," added MacRury.

He maintained his Buy recommendation on Allied and his target price, indicating 89% return potential.

Gold in New Phase of Bull Market

Following a year in which demand hit a new record high of 4,974 tons and supply increased 1%, gold in 2025 is forecasted to have another strong year, according to a Feb. 5 World Gold Council (WGC) report.

"In 2025, we expect central banks to remain in the driving seat and gold exchange-traded fund (ETF) investors to join the fray, especially if we see lower, albeit volatile, interest rates," wrote Louise Street, WGC's senior markets analyst. "On the other hand, jewelry weakness will likely continue as high gold prices and soft economic growth squeeze consumer spending power. Geopolitical and macroeconomic uncertainty should be prevalent themes this year, supporting demand for gold as a store of wealth and hedge against risk."

The WGC expects a gold price of US$3,000/oz this year.

In comparison, the price of the yellow metal just hit a new all-time high of US$2,890/oz on Feb. 5, and ended the week at US$2,878.

"Gold's monster upleg has grown to huge 57.3% gains over 16.1 months! This is an extraordinarily large and long upleg," wrote 321gold's Adam Hamilton on Feb. 7.

According to Newell, "gold is entering a new phase of its long-term bull market," he wrote in a Feb. 5 article. The technical charts suggest another major breakout is imminent, potentially at US$2,875 and US$3,150, with more upside possible if gold begins a parabolic move.

"With history as our guide and current market conditions aligning with past gold bull runs, an explosive move toward US$8,000/oz is not just possible; it's increasingly probable," Newell wrote. "For those looking to hedge against inflation, preserve wealth, and capitalize on a potential historic price surge, gold remains one of the most compelling investment opportunities of our time."

Technical Analyst Clive Maund also asserted gold's new run could lead to sizable gains. Particularly, he wrote on Jan. 31, if money printing continues more quickly than before, resulting in hyperinflation around the world, gold will "do a moonshot, which means that the thus far orderly uptrend will accelerate into a massive spike."

Trade wars and geopolitical tensions should support trends toward central bank reserve diversification and dedollarization, which in turn should boost overall ETF and physical gold demand, according to Citi, Barron's reported on Feb. 6.

"A Russia-Ukraine peace deal, and clarity around whether gold will be exempt from blanket U.S. tariffs could provide a buying opportunity over the coming months, bank analysts wrote.

Citi raised its three-month gold price target to US$3,000/oz from US$2,800, and increased its 2025 average gold price forecast to US$2,900/oz from US$2,800, reported Reuters on Feb. 6.

In a Jan. 30 article, InvestingHaven presented its bullish gold price predictions for the rest of this decade: US$3,260 in 2025, near US$3,775 in 2026, and US$5,120 by 2030. The lead drivers of these higher prices will be heightened inflation and increasing central bank demand.

"The very bullish chart patterns in long-term gold charts tell a compelling story," the investing research service wrote.

As for gold stocks like Allied, they have been abnormally significantly undervalued during the past year, Hamilton wrote, and this implies a reversal is due.

"With gold forging deeper into record territory, the miners about to report their best quarter ever, and GDX nearing a dozen-year secular breakout, gold-stock psychology will increasingly shift bullish again," he added. 

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 CA$1.093 billion. Its 52-week trading range is CA$2.69–5.03 per share.