Allied Gold Shines in Q1: Strong Results Fuel Growth Ambitions

Allied Gold Corporation (TSX: AAUC) delivered a robust first-quarter 2025 performance, showcasing accelerated production, improved financial metrics, and progress on strategic growth initiatives. The company’s Q1 results underscore its transition toward becoming a mid-tier gold producer, with key metrics aligning closely with its long-term targets.

Production Surges, Driven by High-Grade Ore

Allied Gold produced 84,040 ounces of gold in Q1 2025, while sales reached 131,520 ounces, including 48,939 ounces from inventory at the Korali-Sud mine. This inventory drawdown highlights efficient management of existing stockpiles. Production was split across three core assets:
- Sadiola (Mali): 45,232 ounces, leveraging high-grade oxide ore from the Korali-Sud zone.
- Bonikro (Côte d’Ivoire): 19,671 ounces, supported by operational efficiencies.
- Agbaou (Côte d’Ivoire): 19,137 ounces, driven by optimized throughput at its process plant.

Financial Strength and Liquidity

The quarter’s financial performance was equally impressive:
- Net earnings: $15.1 million ($0.05 per share).
- Adjusted earnings: $45.1 million ($0.14 per share).
- Operating cash flow: $121.1 million, with $133.8 million in adjusted EBITDA.
- Balance sheet: $232.3 million in cash, bolstered by a $66.8 million bought deal offering post-quarter.

These figures reflect strong free cash flow generation, enabling Allied Gold to fund its ambitious growth projects without diluting shareholders.

Cost Management and Gold Price Leverage

Allied Gold maintained disciplined cost control despite rising gold prices:
- All-in Sustaining Costs (AISC): $1,811 per ounce, slightly elevated due to higher royalties on Korali-Sud’s high-grade ore.
- Cash costs: $1,656 per ounce, underscoring operational efficiency.
- Gold price realization: $2,814 per ounce, a 13% increase year-over-year, amplifying margins.

The company’s royalty-sensitive assets, such as Sadiola, benefit from rising gold prices, creating a favorable tailwind as the metal remains near $2,500/oz.

Growth Catalysts: Kurmuk and Sadiola Expansion

Allied Gold’s strategic initiatives are advancing rapidly:
1. Kurmuk Project (Sudan):
- $56.2 million invested in Q1 toward construction, with production expected by mid-2026.
- Targeting 290,000 ounces annually initially, with AISC below $950/oz.
- A Q3 2025 update will provide revised resource estimates.

1. Sadiola Expansion (Mali):
2. Phase 1: On track for completion by late 2025, adding 200,000–230,000 ounces annually.
3. Phase 2: A 10 Mt/y plant by late 2028 aims for 400,000 ounces annually, with AISC below $1,200/oz.

Both projects are critical to achieving Allied Gold’s 700–800 koz annual production target by 2029.

Global Expansion and Risk Mitigation

• NYSE Listing: Plans to list on the New York Stock Exchange by mid-2025 aim to enhance liquidity and attract U.S. investors, potentially improving valuation multiples.
• Zero-Cost Collar: A hedge covering 155,000 ounces (75% of 2025–2026 production) ensures a minimum price of $3,048/oz, shielding against downside while allowing upside participation.

Conclusion: A Compelling Growth Story

Allied Gold’s Q1 results solidify its position as a high-growth gold producer. With $232.3 million in cash, 11.2 million ounces of proven and probable reserves, and projects like Kurmuk and Sadiola Phase 1 nearing completion, the company is well-positioned to capitalize on its 700–800 koz 2029 target.

Investors should note:
- Valuation: At a current market cap of $2.8 billion, Allied Gold trades at a 1.5x P/EBITDA multiple, lower than peers, suggesting upside potential.
- Liquidity: The NYSE listing and recent equity raise will further de-risk the equity structure.
- Safety: A TRIR of 0.40 and improved safety metrics reflect strong operational governance.

Allied Gold’s blend of near-term production growth, low-cost projects, and strategic capital allocation makes it a compelling play in the gold sector. With its sights set on becoming a senior producer by 2029, this quarter’s results are just the beginning.