ALLIED GOLD LAUNCHES ENERGY PROGRAM AT SADIOLA TO DELIVER EFFICIENT, RELIABLE AND LOWER-COST POWER FOR PHASED EXPANSION
Beginning early next year, Sadiola will significantly reduce its use of legacy diesel generators in favour of newer, more cost-effective units and control systems, aimed at reducing fuel consumption and increasing power generation efficiency. Over the course of 2027, this will be followed by the installation of the photovoltaic plant and related BESS, as well as medium-speed thermal generators, both of which are planned to be expanded further to match the energy requirements of the next Sadiola expansion.
The introduction of the initial photovoltaic plant and BESS is projected to reduce energy costs by up to 20 percent compared to current costs. The introduction of additional photovoltaic and BESS capacity, as well as medium-speed thermal generators, is projected to further reduce energy costs by up to 45 percent, representing a reduction in All-In Sustaining Costs ("AISC"), once the power program is fully implemented, estimated to range from an initial amount of
The Company has concluded that its power program for Sadiola will provide greater reliability and certainty, which are essential for supporting uninterrupted mining operations without overburdening the grid system. Elements of the power solution are expected to be financed through a combination of upfront and deferred payments, thereby decreasing near-term capital requirements, as noted below.
As part of its analysis, the Company has retained the services of African Power Services ("APS") to provide a comprehensive power solution for the program's initial stages. The engagement with APS marks a significant milestone in Allied's strategy to unlock value at Sadiola by ensuring a reliable, cost-effective, and scalable power supply in alignment with the mine's phased expansion approach. Leveraging APS's extensive experience in renewable and hybrid energy solutions across
About the Energy Program
The power requirement for the Sadiola Phase 1 expansion was determined to be 20MW as average load, while for the Phase 2 expansion, the average load is estimated to be 32MW. As previously disclosed, the Company is advancing engineering studies on an alternative expansion scenario that leverages the existing processing infrastructure, thereby reducing capital requirements while achieving substantial production growth. The power requirement for this alternative scenario is expected to fall within the range of 22MW and 32MW, defined by the power demands of Phase 1 and Phase 2 expansions. Given that the power plan being implemented is to be deployed in stages and is scalable, this approach provides the Company with significant flexibility to pursue its future expansion plans while securing its power supply and advancing its cost reduction program at Sadiola in the short and medium term.
As noted above, the first stage of the proposed program involves expanding the diesel generation capacity at Sadiola by approximately 14 MW with state-of-the-art units, which are expected to be completed by early 2026. This will be followed by the installation of a photovoltaic plant with a peak capacity of approximately 35MW, paired with a 30 MWh BESS and a new control system integrated with the diesel generators by mid-2027, which is designed to supply approximately forty percent of the energy requirements of Phase 1 expansion.
The second stage of the plan involves the progressive introduction of medium-speed thermal generation between 2027 and 2028, which is expected to improve efficiency and significantly reduce operating costs. Additional thermal generation will be accompanied by the expansion of the renewable energy generation to a target peak capacity of up to 60MW for solar and 45 MWh for BESS, to supply the next phase of growth at Sadiola while preserving flexibility to produce additional power if required.
The new diesel generators, along with the initial photovoltaic plant and BESS, are planned to be installed with a deferred payment arrangement, thereby requiring minimal up-front capital. The capital for the first stage of the medium-speed thermal generators is expected to fit within the capital provision for power as part of the Sadiola expansion.
These investments will secure power for the ongoing needs and future growth at Sadiola, while progressively lowering costs, fuel consumption and carbon intensity of operations. In addition, the hybrid power generation solution will ensure a robust, independent and uninterrupted power supply for operations, while preserving the option to connect to
The Phase 1 expansion of Sadiola is proceeding as planned at Sadiola with completion expected in the fourth quarter. The first phase plant expansion involves installing additional crushing and grinding capacity in one of the processing plant lines, which will be dedicated to treating fresh ore. These modifications will allow Sadiola to treat up to 60% of fresh rock at a rate of up to 5.7 Mt/y in the modified process plant starting during the fourth quarter of 2025. With the completion of plant modifications in the first phase, Sadiola is expected to stabilize and produce between 200,000 and 230,000 ounces of gold per year in the medium term, ahead of the next phase of expansion.
Third Quarter 2025 Results
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About
About African Power Services
Africa Power Services is an independent power solutions company focused on designing, building, and supporting energy production facilities across
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION AND STATEMENTS
This press release contains "forward-looking 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, the Company's statements relating to the listing and trading of the Company's Common Shares on the NYSE and the potential benefits related thereto, the timing of first gold production at the Kurmuk gold project and the Company's aspiration to become a mid-tier, next-generation gold producer in
NON-GAAP FINANCIAL PERFORMANCE MEASURES
The Company has included certain non-GAAP financial performance measures, including AISC per gold ounce sold.
The Company believes that this measure, 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, including AISC, 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 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 described and retrospectively applied, as applicable.
The measure of AISC, along with revenue from sales, is considered to be a key indicator of a Company's ability to generate operating earnings and cash flows from its mining operations. AISC is furnished to provide additional information and is a non-GAAP financial performance measure.
AISC PER GOLD OUNCE SOLD
AISC figures are calculated generally in accordance with a standard developed by the
AISC includes mine site operating costs such as mining, processing, administration, production taxes and royalties which are not based on sales or taxable income calculations, mine sustaining capital expenditures (including stripping), sustaining mine-site exploration and evaluation expensed and capitalized, and accretion and amortization of reclamation and remediation. AISC excludes 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 includes only items directly related to each mine site, and does not include any cost associated with the general corporate overhead structure. As a result, total AISC represents 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 excludes 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. 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. 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 is 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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