TSX- and OTCQX-listed Allied Gold Corporation has announced a strategic partnership with United Arab Emirates- (UAE-) based investment fund Ambrosia Investment Holding to help realise immediate value from its Sadiola gold mine, in Mali, and bolster the company’s financial strength.

The partnership, which was announced on February 25, will leverage the regional, national, and continental understanding and influence of Ambrosia, through the UAE in Africa, which will build on Allied's similar competencies, along with Allied's technical and operational expertise, strong public markets knowledge, financial capacity, and strategic capital allocation capabilities to accelerate the company's growth initiatives, optimise operations, pursue strategic options, and enhance shareholder value.

Under the terms of the partnership, Ambrosia will acquire 50% of Allied's interest in Allied Holding, which owns the company’s interests in its Mali operations, including 80% of Societe d'Exploitation des Mines d'Or de Sadiola (Semos).

The acquisition will be funded by $145-million in cash and a $230-million deferred cash consideration.

As a result of the sale of 50% of Allied's interest in Allied Holding, a 50:50 joint venture will be created with Ambrosia, which will govern the relationship of the parties in Allied Holding and Semos and provide for the governance of the Sadiola mine.

Allied will remain the operator of Semos and will continue the advancement of the ongoing value-creating initiatives at Sadiola and the execution of its business plan.

The transaction endorses and complements Allied's efforts in Mali, particularly the ongoing phased expansion of its generational Sadiola mine.

Further, the transaction is expected to provide key regional expertise and broader market support through a strategic partner with meaningful financial participation in the company.

The UAE has emerged as a prominent backer of new business in Africa, with Allied stating that UAE companies committed more than $110-billion to projects on the continent between 2019 and 2023, including $72-billion in renewable-energy projects.

The transaction estimated aggregate proceeds of more than $500-million, including about $250-million in upfront cash consideration, reinforces Allied’s balance sheet and improves the company's financial flexibility. This helps to support the company’s development of its Kurmuk project, in Ethiopia, and the ongoing phased expansion at Sadiola.

Kurmuk is expected to start production in mid-2026 with a target production level of about 290 000 oz/y of gold over the first four years and 240 000 oz/y of gold over the life-of-mine (LoM) at industry-leading all-in sustaining costs (AISC).

With proven and probable mineral reserves of 2.7-million ounces of gold and significant geological upside, the company is targeting a mine life greater than 15 years driven by an extensive exploration programme.

The phased expansion approach at Sadiola is driving production increases from about 170 000 oz in 2023 to a mid-term range between 200 000 oz/y and 230 000 oz/y as a result of oxide ore feed and the implementation of the first expansion phase later this year.

This is followed by a further expansion stage expected to be completed in late 2028, which will target a production level of 400 000 oz/y of gold over the first four years and 300 000 oz/y of gold over a 19-year mine life based on 7.2-million ounces in mineral reserves.

Allied said it was advancing metallurgical and engineering studies to confirm the opportunity to increase production over these LoM levels through the optimisation of metallurgical recoveries and a progressive expansion approach.

The partnership with Ambrosia also contemplates the provision of a state-of-the-art renewable power solution to supply sustainable electricity to Sadiola. This system, which will be provided by UAE-based power solutions company ATGC, is expected to be ready by July 2026 and supply power for at least the following 12 years. This is expected to improve the asset's costs and environmental footprint.

"Our approach is to establish rapport and build relationships in the countries in which we operate. Our new partners are similarly minded and have experiences in the country that complement ours. This is a . . . unique transaction in that it brings together a Canadian company whose management has significant experience and engagement in the country and whose operational competence and experience is Tier 1, with individuals with comparable in-country experience and bringing a unique and very well-priced power solution to Sadiola, which will reduce costs and create a better, longer life operation.

“We believe this collaboration is the first of its kind, with a Canadian company partnering with Emirati entrepreneurs and business persons investing in Mali," Allied chairperson and CEO Peter Marrone said.

The improved financial flexibility arising from the transaction will provide the opportunity to optimise these expansion plans at Sadiola and Allied's other assets while also providing the company with tools to pursue strategic opportunities along with Ambrosia.

“We have been looking for some time at establishing an alliance with a high-quality precious metals mining company. With the support of the UAE government and given our familiarity with the country, we will work cooperatively with [the] Mali government, side-by-side with . . . Allied Gold, to realise, maximise, and expedite the inherent significant value in Sadiola," Ambrosia chairperson Ahmed Amer Al Amry said.