Marrone to make Allied Gold 1Mozpa producer

Allied owns or controls three producing mines and several development and exploration projects in Côte d'Ivoire, Mali, Ethiopia and Egypt, producing more than 370,000ozpa and plans for a lot more, with aggregate reserves of more than 10Moz and more than 15Moz of resources.The company raised US$267 million in August and closed its going public reverse takeover transaction, trading under the ticker AAUC. Of this, $40 million came from the former Yamana management team."I've grown to love this industry, and building new companies is a lot of fun. It is a lot of hard work, but I'm looking forward to doing that," Marrone, chair and chief executive of Allied Gold told Mining Journal at the 2023 Gold Forum Americas in Colorado Springs in Colorado, US."Allied is not dissimilar to 2003 with Yamana. They were assets that had been known but forgotten about, that had development plans that were far better than people anticipated. And the same is true here. The difference in this case is that the production platform is substantially greater. … We are not just hired guns, we're here as investors, aligning ourselves with public investors. We wouldn't have done that if we didn't think that there was an opportunity," Marrone continued.SadiolaIts producing assets are the Sadiola mine in Mali, which has a reserve of 149.5Mt grading 1.51gpt for 7.3Moz.A feasibility study for an expansion was completed in 2022, which contemplates an average life of mine production of over 300,000ozpa, at an all-in sustaining cost (AISC) below $1,000/oz for 17 years. The mine produced over 175,000oz in 2022."Sadiola is a known mine, known by IAMGold and AngloGold Ashanti. It has been run historically as an oxide mine, and here we are now with an extension of mine life to the oxides, but the future of this mine is the fresh rock, and that fresh rock is at higher grade.""It will require a new plant, but the processing through that new plant means that the production platform is certainly in excess of 300,000ozpa. In demonstrating that we can deliver returns from acquisitions, that we serially create value in our acquisitions, and if we have that mandate, we will look to how we can look at M&A to expand on the organic growth," said Marrone.Added to this is the Bonikro mine in Côte d'Ivoire with an annual production of 100,000oz, and the adjacent Agbaou deposit, which is being integrated into the operation and expected to produce 90,000ozpa over the next four years.In Ethiopia, the company has Kurmuk, a permitted, shovel-ready, hydro-powered greenfield development asset, slated to produce 200,000ozpa underpinned by 2.6Moz of reserves."geopolitics is geopolitics. There is one concern or another in one jurisdiction or another. However, the way that I think investors should be looking at this is about returns,"White knightMarrone built Yamana from a base in Brazil throughout the Americas, ultimately partnering with Agnico Eagle Mines as a white knight to buy Osisko Mining and the Canadian Malartic mine in Quebec, Canada in 2014, en route to becoming a 1Mozpa producer. Growing a gold miner in Africa is a different challenge."There is this wisdom out there that companies should be going into developed markets, but I'm finding that where the juice is, where a lot of the returns are, are emerging markets because it seems that the permitting process is fast-tracked, although with the same requirements as one would find in the developed market.""If I wanted to develop a project in Canada today, it would take me somewhere in the range of eight years just to get permitted, and yet in some developing parts of the world, as little as two," said Marrone.The political situation in West Africa and across the Sahel makes some Western investors nervous. However, in addition to the former Yamana management team, Allied Gold has retained much of its team with knowledge and experience of operating in Africa."We have that corporate knowledge retained in the company. I am as concerned as one should be from a security point of view and from a protection of persons and protection of assets point of view. But geopolitics is geopolitics. There is one concern or another in one jurisdiction or another. However, the way that I think investors should be looking at this is about returns," said Marrone.GrowthFrom a starting point of 370,000ozpa of production, Allied has organic growth opportunities to double that potentially, and through M&A, Marrone wants the company to become a 1Mozpa producer, which means a search for new assets is also on the cards."Yamana demonstrated earlier this year that we could make value for investors by busting it up so that two companies bought the relevant parts for each of them. Do I believe there are other opportunities like that out there? Absolutely. And those are some things I think should be pursued," said Marrone.As the company grows, Marrone will look to expand from its TSX listing to appeal to investors in other jurisdictions."A precious metals mining company of a certain size will attract more attention on the Toronto Stock Exchange than on other stock exchanges in the world. At some point, we have to consider a migration, or at least a supplemental listing, on some of these other exchanges. Yamana listed on New York after Toronto and then London as well, and hopefully, we'll follow the same progression in the case of Allied," he said.Marrone also thinks gold stocks will catch a break and increase in value to reflect better the gold price, which he also thinks will increase."The when is always the difficult part for me. But, will it occur? I think the answer is yes. The telltale signs of the gold price doing well are there. This time we are coupling that with the fact that the equities are trading as if gold price is not $1900/oz," he said.

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