By our staff reporter
Precious metal miner, Allied Gold announces that it has approved the expansion of the Kurmuk project in Ethiopia, earmarking a USD 500 million injection in a two-phase development plan.
The large scale miner, which received its license for mining and exploration at the Kurmuk Gold Mine (KGM) in Benshangul Gumuz, disclosed that Kurmuk is now projected as a 240, 000 ounce per year gold mine with all-in sustaining costs (AISC) targeted below USD 950 per ounce, with a strategic mine life extending for an initial 15 years.
“The expansion project will involve upgrading the processing plant’s capacity from 4.4 million tonnes a year to between 5.4 million tonnes and 5.7 million tonnes a year,” the statement issued in middle of this week revealed.
The expansion project will produce an average of nearly 275 000 ounce per year for the first four years and an average of 240 000 ounce per year over its mine life, “This compares favorably to the original project, which would have produced an average of 200 000 ounce per year with similar capital costs,” the company cited.
Allied noted that, by capitalizing on the deployment of existing major equipment owned by the company and relying on contractor mining, the expansion project would be developed with the same capital requirements as initially planned.
The project development capital would be spent from 2023 to 2026, funded by available cash on hand and cash flows from producing mines, with the first gold pour expected in the second quarter of 2026.
Allied has just completed a USD 267-million financing, including a significant investment from incoming management in the amount of USD 40-million, to which Chairperson and CEO Peter Marrone has anchored the investment of incoming management.
On Monday, September 11, Allied Gold was listed on the Toronto Stock Exchange (TSX).
Allied Gold and Allied Merger Corp, which was formed by Marrone and fellow former Yamana Gold executives, last week, completed a business combination and reserve takeover transaction.
“The commencement of trading on the TSX marks the final step as we complete our transition to a public company and embark on our next phase of growth,” Marrone commented.
“We are excited to have been part of this foundational event for the Company and are now positioned to execute our strategic vision, with a renewed commitment to delivering on our high-quality, organic growth profile and generating substantial value for our shareholders. Our goal is to evolve into a significant mid-tier next-generation gold producer and ultimately become a leading senior global gold producer,” he said.
The company mining site is 750 km west of Addis Ababa at Kurmuk Wereda of Assosa Zone about one hour drive from the regional capital Assosa.
The company has invested for the procurement of different production machineries to commence operation, while illegal miners had hampered the company activity.
As per the plan, the company will produce nine tons of gold per annum, which is the capacity that country currently has, for two decades and also targets to increase the volume to up to 11 tons.