What Allied Gold (AAUC) Said on Its Q3 Earnings Call

Key Points

• Q3 financials: Allied Gold reported $358 million in revenue, $116 million in operating cash flow, and $379 million in cash. Its consolidated all-in sustaining costs were $2,378 per ounce.
• Kurmuk ramp-up: The mine has begun production, with commercial production expected by year-end and nameplate capacity early next year. Allied forecasts companywide production of 615,000–670,000 ounces in 2027, rising toward 800,000 ounces annually by 2029.
• Shareholder returns: Allied is developing a base dividend policy for early next year and expects to start a buyback program in 2027, potentially covering up to 10% of its public float, subject to approval.

Allied Gold NYSE: AAUC reported $358 million in third-quarter revenue and said its Kurmuk mine had begun production, setting the stage for a planned increase in gold output and potential shareholder returns in 2027.

Chairman and Chief Executive Officer Peter Marrone said ore had entered Kurmuk’s processing plant, with production expected to ramp up through the rest of the year and beyond. The company expects commercial production at the Ethiopian mine by year-end and nameplate capacity early next year.

Allied ended the quarter with approximately $379 million in cash and generated $116 million in operating cash flow. Adjusted earnings before interest, taxes, depreciation and amortization were approximately $140 million, while adjusted net earnings were $49 million, or $0.37 per share.

Revenue was supported by an average realized gold price of just under $3,900 per ounce. Consolidated all-in sustaining costs were $2,378 per ounce. Total liquidity, including an undrawn revolving credit facility, was $429 million.

Kurmuk Ramp-Up and Production Outlook

Allied expects Kurmuk to produce 25,000 to 35,000 ounces in November and December, followed by 55,000 to 65,000 ounces in the first quarter of 2027. Its full-year outlook for the mine is 240,000 to 270,000 ounces in 2027 and approximately 300,000 ounces in 2028.

Marrone said Kurmuk is expected to become Allied’s lowest-cost operation and contribute disproportionately to cash flow as output rises. The company’s remaining gold collars, entered into to support Kurmuk’s development, expire in December, increasing its exposure to prevailing gold prices.

The mine is connected to the power grid and has diesel-generator backup, Marrone said. He expects equipment needed to stabilize the power line to be connected in the third or fourth week of November, providing enough power to run the plant at nameplate capacity.

Chief Development Officer Gerardo Fernandez said Kurmuk’s stockpile stood at around 1.5 million tons. Its medium- and high-grade material averaged approximately 1.7 to 1.8 grams per ton, he said, adding that mining was underway for next year’s production.

Marrone said Allied expected to conduct a gold pour in the coming days as part of a ceremonial event with government officials. He also described work during the ramp-up as ordinary-course activity focused on preparing equipment and operations for higher production.

Companywide, Allied expects production of 615,000 to 670,000 ounces in 2027, up from roughly 379,000 ounces expected this year. Marrone outlined a longer-term objective of approximately 800,000 ounces annually by 2029, supported by Kurmuk, an expansion at Sadiola and sustained output from Côte d’Ivoire.

Sadiola Improvements and Costs

Sadiola produced approximately 42,300 ounces in the third quarter at all-in sustaining costs of $2,876 per ounce. Marrone said Allied expects improved equipment availability and higher-grade ore to lift output and reduce unit costs.

The CEO said some operating improvements had been deferred during the now-terminated Zijin transaction process. Allied has since ended short-term equipment contracts and amended its main mining contract to include fleet reliability and availability commitments, he said.

Marrone expects Sadiola’s fourth-quarter production to rise approximately 20% to 25% from the third quarter, primarily because of improved grades. He said the company is comfortable with grade-control work undertaken since the transaction ended.

Allied is advancing a modular expansion at Sadiola, initially targeting capacity of at least 7 million tons per year. An updated feasibility study and capital estimate are expected in early 2027. The company also expects to commission a pre-leach thickener in the second quarter as part of the broader expansion strategy.

Higher diesel prices have had a greater impact at Sadiola than at Kurmuk because Sadiola is more dependent on diesel, including for its plant, Marrone said. He estimated the increase in diesel costs at Sadiola at about $80 per ounce and said the company had not experienced supply-chain disruptions.

In Côte d’Ivoire, Bonikro produced approximately 28,600 ounces at all-in sustaining costs of $1,670 per ounce, benefiting from higher grades and improved recoveries. Agbaou produced 20,300 ounces at costs of $2,384 per ounce, with output in line with plan and costs better than expected, Marrone said.

Dividend and Buyback Plans

Allied is developing a shareholder-return policy and expects a base dividend early next year, subject to board conclusions and cash-flow expectations. Marrone said he expects the dividend to be at least in line with peer-group practices.

The company also anticipates starting a share buyback program in 2027. Subject to Toronto Stock Exchange approval, it intends to seek authorization for a normal course issuer bid covering up to 10% of its public float.

Marrone said the timing of the authorization depends on the regulatory process and could be in place by year-end or early next year. Allied would then evaluate when to buy shares, taking liquidity and shareholder concentration into account, he said.

About Allied Gold (NYSE:AAUC)

Allied Gold Corporation is a Canada-based gold producer and mine developer focused on operations in West Africa. The company explores for, develops and produces gold, with activities spanning open-pit mining, ore processing and the production of gold doré.

Allied Gold's principal assets include the Sadiola gold mine in Mali and the Bonikro and Agbaou gold mines in Côte d'Ivoire. The company also manages exploration and development programs intended to extend mine lives, expand resources and improve production from its regional asset base.

Allied Gold became a publicly traded company in 2023.

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