ALLIED GOLD PROVIDES UPDATE ON CONTINUED EXPLORATION SUCCESS AND PROJECT DEVELOPMENT AT KURMUK
- Recent significant exploration results at both
Dish Mountain and Tsenge confirm the high prospectivity previously reported for the property and these near-mine targets. These results support the Company's objective to deliver significant Mineral Reserves and Mineral Resource growth from areas that can extend and improve Kurmuk's initial mine life and production profile. This, in turn, helps to achieve the Company's strategic goals, including reaching a minimum of five million ounces of gold in mineral inventories at the project. - Cumulative exploration results at the
Tsenge Project highlight the potential for significant additional economic mineralization within the project area, reinforcing Allied's vision that Kurmuk and the surrounding 1,269 km2 of exploration leases represent the potential for a new gold mineral province inWestern Ethiopia . - Key project advancements in recent months build upon the planning and preparation activities started in late 2023. These include the progress of the Engineering, Procurement and Construction Management ("EPCM") Early Works contract under DRA Global Limited ("DRA"), the ongoing procurement of long-lead items and services, including the ball mill in addition to the already owned SAG mill, and the tendering process for contract mining and bulk earthworks, among others.
The Kurmuk project is expected to achieve average annual gold production of over 290,000 ounces ("oz") during the first five years and maintain production of over 240,000 oz per year for the Life of Mine ("LOM") at an AISC(1) targeted below
Exploration Update
The exploration effort at Kurmuk continues to define significant gold intersections in near-surface mineralization, with the objective of increasing mine life and providing optionality for near-term opportunities that could represent improvements to the LOM plan. Currently, the 2.74 million oz of Mineral Reserves are contained entirely in the
Dish Mountain Extensions
Additional diamond drilling at the Dish Mountain Deposit has highlighted the potential for further economic mineralization from extensions to the current orebody, which contains 1.3 million oz of Mineral Reserves within 32.7 Mt at a grade of 1.24 g/t Au, both along strike and on the flanks of the deposit. Figure 3 illustrates the location of 16 holes, totaling approximately 4,612 meters of core drilled in late 2023. These holes intersected mineralization beneath and adjacent to the
Significant intersections received are reported in Table 1. Figure 4 illustrates the intersections obtained in DMDD691 and DMDD694 in cross section. Highlights from DMDD691 include 15.3 m at 3.45 g/t Au from 223 m (true thickness 10.82 m). DMDD694, on the same section, intersected three zones: 10.2 m at 2.69 g/t Au (true thickness 9.59 m), 4.6 m at 4.31 g/t Au from 192.0 m (true thickness 2.18 m), and 3.4 m at 3.53 g/t Au from 243.5 m (true thickness 1.56 m), demonstrating the presence of numerous mineralized lodes to be targeted by exploratory drilling.
These results support the potential for extending high grade mineralization at
Tsenge Exploration Update
The Tsenge gold prospect is located within the Proterozoic Kurmuk Greenstone Belt, part of the Western Ethiopian Greenstone Belt. It is positioned along strike from the Ashashire Gold Deposit and approximately 6 km southeast of the planned
Since the initial results for Tsenge, further drilling at depth has supported the potential for significant gold mineralization, highlighted by previous surface trenching results. The current focus of exploration drilling is the Sitola target within the Tsenge Prospect, located approximately 9 km from the planned 6.0 Mtpa process plant, as shown in Figure 2.
Allied has drilled 24 diamond drill holes in the proposed program of 124 holes, on an initial 200 m spacing. Assays have been received for 12 of the 24 drilled holes. Significant intersections are reported in Table 2. Figure 5 presents the drill location plan, and Figure 6 shows the local section for TSDD013. Notable intersections from TSDD013 include 3.0 m at 3.76 g/t Au from 95.2 m (true thickness 2.6 m), 9.7 m at 4.92 g/t Au from 100.9 m (true thickness 8.6 m), 4.1 m at 4.27 g/t Au from 122.7 m (true thickness 3.61 m), 8.6 m at 7.73 g/t Au from 133.4 m (true thickness 7.6 m), and 6.2 m at 6.90 g/t Au from 183.9 m (true thickness 5.0 m).
These additional drill results, which build on the previously disclosed soil sampling, geological mapping, and channel sampling, confirm broad gold mineralization with economic grades in hard rock at the surface and at least up to 200 m vertically below the outcrop. These findings indicate that the gold-in-soil anomaly of greater than 100 ppb Au is derived from significant gold grades of greater than 1.0 g/t Au in rock, consistent with the Company's experience at the
The drilling results demonstrate the potential for large tonnage economic gold mineralization at this prospect and its potential to increase mineral inventories and extend the mine life of Kurmuk. These positive exploration results at Tsenge support the potential for expanding the mineral inventory at this target and across the entire
Project Development Updates
As previously released, construction activities at the
The Company is pleased to provide an update on the Kurmuk construction activities:
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Execution Planning: During the first quarter of 2024 the Company completed execution planning and preparation activities, which included mobilizing the EPCM contractor to the site, advancing detailed engineering, formalizing, and executing the procurement plan.
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Engineering and Procurement: Activities are progressing well under DRA and the Allied team. The project remains focused on completing critical path packages and executing the procurement of long-lead items. The ball mill order has been placed and is expected to be delivered by mid-next year, and with the SAG mill already owned, the longer lead time items are either already dealt with or in progress. Other key packages are progressing according to schedule, with key tenders issued to the market and in the process of being awarded, including contract mining services and bulk excavations, among others.
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Construction and Local Engagement: Significant progress has been made in the construction phase. The construction water dam, built by a local earthworks contractor under DRA's supervision, has been completed on schedule and is now full. Additionally, the construction camp build is advancing, with earthworks, civil works, and delivery of modules for the main 1,600-person camp ongoing. Successful engagement with local contractors has provided flexibility to ensure steady progress.
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Local Stakeholder Engagement: The Company is dedicated to fostering strong community relationships and strengthening its social license for Kurmuk. Several initiatives have been advancing with national, regional, and local stakeholders to leverage the overwhelming support for the project from local stakeholders and to continue advancing construction activities while creating the framework for future operations.
- Operational Readiness: Operational readiness remains a key focus, with planning and preparation activities underway, including the recruitment of the General Manager and other operating positions. The Company intends to award the mining contract in July, with the objective of advancing earthworks and allowing for the early mobilization of equipment and the development of customs, importation, and logistics systems well ahead of the timeframe when mining will begin.
The continued progress in both project development and exploration activities underscores Allied's dedication to maximizing the potential of Kurmuk and establishing it as a significant gold mineral province in
Table 1 –
Dish Mountain Intersection Table –
Table 2 –
Tsenge Intersection Table -
Table 3 –
Tsenge Intersection Table - Channel Samples, Kurmuk,
Allied Gold is a Canadian-based gold producer with a significant growth profile and mineral endowment which operates a portfolio of three producing assets and development projects located in Côte d'Ivoire,
Except as otherwise disclosed, all scientific and technical information contained in this press release has been reviewed and approved by
Allied Gold incorporates a Quality Assurance and Quality Control ("QA/QC") program for all of its mines and exploration projects which conforms to industry best practices.
- Kurmuk – sample preparation is completed on site at the Exploration Camp sample preparation facility, which is maintained and protocols audited by Allied's laboratory consultant on a bi-annual basis.
- Pulp samples are dispatched via secure courier from Asosa to
Addis , received by the Company, cleared with theMinistry of Mines and Petroleum for export, and exported with secure courier to ALS Geochemistry,Perth, Australia (ISO9001 certification). Gold is analysed by fire assay with a 50 gram aliquot and AAS finish (lab code: Au-AA25). Au-AA25 is certified from 0.01 to 100 g/t Au. Rejects and remaining half-core stored on site for the period for archival purposes. Check samples are completed at Intertek Perth using a 50 gram fire assay method.
All exploration diamond drill cores are split in half by core sawing and sampled at appropriate intervals for assay. The remaining core, and pulps are stored on-site in a secure location. Sample rejects at the laboratory are disposed of after the QA/QC is complete.
Certified reference standards, blanks and duplicates (preparation and analytical) are routinely inserted into the sample stream as a control for assay accuracy, bias, precision and contamination. The results of these checks are tracked and failures are re-analyzed. This information also includes pulp checks carried out in the secondary lab.
END NOTES
- This is a non-GAAP financial performance measure. Refer to the Non-GAAP Financial Performance Measures section at the end of this news release.
This press release contains "forward-looking information" including "future oriented financial information" under applicable Canadian securities legislation. Except for statements of historical fact relating to the Company, information contained herein constitutes forward-looking information, including, but not limited to, any information as to the Company's strategy, objectives, plans or future financial or operating performance. Forward-looking statements are characterized by words such as "plan", "expect", "budget", "target", "project", "intend", "believe", "anticipate", "estimate" and other similar words or negative versions thereof, or statements that certain events or conditions "may", "will", "should", "would" or "could" occur. In particular, forward-looking information included in this press release includes, without limitation, statements with respect to:
- the Company's expectations in connection with the production and exploration, development and expansion plans at the Company's projects discussed herein being met;
- the Company's plans to continue building on its base of significant gold production, development-stage properties, exploration properties and land positions in
Mali , Côte d'Ivoire andEthiopia through optimization initiatives at existing operating mines, development of new mines, the advancement of its exploration properties and, at times, by targeting other consolidation opportunities with a primary focus inAfrica ; - the Company's expectations relating to the performance of its mineral properties;
- the estimation of Mineral Reserves and Mineral Resources;
- the timing and amount of estimated future production;
- the estimation of the life of mine of the Company's projects;
- the timing and amount of estimated future capital and operating costs;
- the costs and timing of exploration and development activities;
- the Company's expectations regarding the timing of feasibility or pre-feasibility studies, conceptual studies or environmental impact assessments;
- the effect of government regulations (or changes thereto) with respect to restrictions on production, export controls, income taxes, expropriation of property, repatriation of profits, environmental legislation, land use, water use, land claims of local people, mine safety and receipt of necessary permits;
- the Company's community relations in the locations where it operates and the further development of the Company's social responsibility programs;
- the Company's expectations regarding the payment of any future dividends; and
- the Company's aspirations to become a mid-tier next generation gold producer in
Africa and ultimately a leading senior global gold producer.
Forward-looking information is based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made, and is inherently subject to a variety of risks and uncertainties and other known and unknown factors that could cause actual events or results to differ materially from those projected in the forward-looking information. These factors include the Company's dependence on products produced from its key mining assets; fluctuating price of gold; risks relating to the exploration, development and operation of mineral properties, including but not limited to adverse environmental and climatic conditions, unusual and unexpected geologic conditions and equipment failures; risks relating to operating in emerging markets, particularly
Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that could cause actions, events or results to not be as anticipated, estimated or intended. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The Company undertakes no obligation to update forward-looking information if circumstances or management's estimates, assumptions or opinions should change, except as required by applicable law. The reader is cautioned not to place undue reliance on forward-looking information. The forward-looking information contained herein is presented for the purpose of assisting investors in understanding the Company's expected financial and operational performance and results as at and for the periods ended on the dates presented in the Company's plans and objectives and may not be appropriate for other purposes.
The Company has included certain non-GAAP financial performance measures in this press release, which supplement its Consolidated Financial Statements that are presented in accordance with IFRS, including the following:
- Cash costs per gold ounce sold (which is included in AISC); and
- AISC per gold ounce sold
The Company believes that these measures, together with measures determined in accordance with IFRS, provide investors with an improved ability to evaluate the underlying performance of the Company.
Non-GAAP financial performance measures do not have any standardized meaning prescribed under IFRS, and therefore may not be comparable to similar measures employed by other companies. Non-GAAP financial performance measures are intended to provide additional information, and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS and are not necessarily indicative of operating costs, operating earnings or cash flows presented under IFRS.
Management's determination of the components of non-GAAP financial performance measures and other financial measures are evaluated on a periodic basis, influenced by new items and transactions, a review of investor uses and new regulations as applicable. Any changes to the measures are duly noted and retrospectively applied, as applicable. Subtotals and per unit measures may not calculate based on amounts presented in the following tables due to rounding.
The measures of cash costs and AISC, along with revenue from sales, are considered to be key indicators of a company's ability to generate operating earnings and cash flows from its mining operations.
AISC figures are calculated generally in accordance with a standard developed by the
AISC include cash costs (as defined above), mine sustaining capital expenditures (including stripping), sustaining mine-site exploration and evaluation expensed and capitalized, and accretion and amortization of reclamation and remediation. AISC exclude capital expenditures attributable to projects or mine expansions, exploration and evaluation costs attributable to growth projects, DA, income tax payments, borrowing costs and dividend payments. AISC include only items directly related to each mine site, and do not include any cost associated with the general corporate overhead structure. As a result, Total AISC represent the weighted average of the three operating mines, and not a consolidated total for the Company. Consequently, this measure is not representative of all of the Company's cash expenditures.
Sustaining capital expenditures are expenditures that do not increase annual gold ounce production at a mine site and exclude all expenditures at the Company's development projects as well as certain expenditures at the Company's operating sites that are deemed expansionary in nature, such as the Sadiola Phased Expansion, the construction and development of Kurmuk and the PB5 pushback at Bonikro. Exploration capital expenditures represent exploration spend that has met criteria for capitalization under IFRS.
The Company discloses AISC as it believes that the measure provides useful information and assists investors in understanding total sustaining expenditures of producing and selling gold from current operations, and evaluating the Company's operating performance and its ability to generate cash flow. The most directly comparable IFRS measure is cost of sales, excluding DA. As aforementioned, this non-GAAP measure does not have any standardized meaning prescribed under IFRS, and therefore may not be comparable to similar measures employed by other companies, should not be considered in isolation as a substitute for measures of performance prepared in accordance with IFRS, and is not necessarily indicative of operating costs, operating earnings or cash flows presented under IFRS.
AISC are computed on a weighted average basis, with the aforementioned costs, net of by-product revenue credits from sales of silver, being the numerator in the calculation, divided by gold ounces sold.
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