Allied Gold Enters US$500 Million Transaction Related To Sadiola Mine, Sells 50% Of Interest In Mine
Allied Gold (TSX: AAUC) ha agreed to sell half of its interest in the Sadiola mine in Mali, under a new partnership agreement with the UAE-based investment fund Ambrosia Investment Holding.
The transaction will see the sale of a 50% interest in Allied Gold ML Corp, which owns Allied’s interest in the Mali operations. The sale comes at a price tag of US$145 million in cash on closing and a further US$230 million in deferred cash consideration.
The sale will result in the establishment of a 50/50 joint venture with Ambrosia, which will govern the ownership of Sadiola. On a post-transaction basis, Allied will as a result own a 40% stake in the mine, which is currently undergoing a planned expansion that will bring its production from the current 170,000 ounces of gold a year to a range of between 200,000 and 230,000 ounces of gold a year. A later expansion is planned for 2028, which will push production to 400,000 ounces a year.
The transaction values Sadiola at approximately US$750 million.
As part of the transaction, Ambrosia will also install a power supply system to provide energy to the mine under a power supply agreement with ATGC LLC, which is a UAE-based power company. The agreement will be for a minimum of 12 years, and includes the installation of both solar panels and solid state energy storage.
Ambrosia is also to invest C$156.6 million into Allied Gold, take a 12% stake through the acquisition of 46.0 million shares at a price of $3.40 per each. Funding from the investment is earmarked for the expansion at Sadiola. Ambrosia also intends to acquire shares in the open market, pushing its ownership interest as high as 19%.
Total consideration from the partnership agreement is expected to exceed US$500 million, of which US$250 million is to be provided upfront.
Closing of the transaction remains subject to finalization. The private placement portion of the transaction is expected to close by March 17.
Allied Gold last traded at $4.54 on the TSX.
Information for this story was found via Sedar and the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.
