Canadian miner Allied Gold has entered a strategic partnership with Ambrosia Investment Holding, a United Arab Emirates (UAE)-based investment fund, to unlock immediate value from its Sadiola gold mine in Mali and strengthen the company’s financial position.
The partnership involves the sale of 50% of Allied Gold’s interest in Allied Gold ML (Allied Holding), which operates the company’s assets in Mali, to Ambrosia.
Allied Holding owns 80% of Societe d'Exploitation des Mines d'Or de Sadiola SA (SEMOS), which operates the Sadiola mine. The transaction values the 80% interest at $750m (C$1.08bn).
The deal includes a purchase price of $145m in cash at closing, along with deferred cash consideration valued at $230m.
A 50:50 joint venture will be formed between Allied Gold and Ambrosia to govern Allied Holding and SEMOS upon the closing of the transaction.
Allied Gold will continue as the operator of SEMOS, leading operational activities and ongoing value-creation initiatives at the Sadiola mine.
The collaboration will utilise Ambrosia's regional expertise in Africa, particularly through the UAE, to complement Allied's technical and operational capabilities.
The deal will fortify Allied's balance sheet, providing flexibility for its growth plans including the development of the Kurmuk project in Ethiopia and the expansion at Sadiola.
Allied chairman and CEO Peter Marrone said: “This is an impressively 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 one, 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.”
The Sadiola mine's phased expansion is projected to increase production from approximately 170,000oz in 2023 to between 200,000oz and 230,000oz annually.
A further expansion stage, to be completed by late 2028, aims to produce 400,000oz per annum of gold for the first four years and 300,000oz per annum of gold over a 19-year life of mine, based on 7.2 million ounces in mineral reserves.
The partnership also includes the implementation of a cutting-edge renewable power solution at Sadiola, expected to reduce costs and the environmental footprint.
Furthermore, Allied will issue approximately 12% of its shares to Ambrosia at a premium, raising C$156.55m to fund Sadiola's expansion.
Ambrosia has expressed its intention to increase its proforma ownership in Allied to 19% through the acquisition of private placement shares and market purchases.
The strategic partnership is subject to the finalisation of definitive agreements and regulatory approvals, with the private placement expected to close around 17 March 2025.
Ambrosia chairman Ahmed Amer Al Amry said: “We have been looking for some time at establishing an alliance with a high-quality precious metals mining company. We have found that in Allied Gold with its impressive portfolio of assets and management team. We are excited to be a shareholder and will continue to support the efforts of the company.”
