Allied Gold Corporation (TSX: AAUC) is pleased to announce that it has entered into a streaming transaction with Triple Flag International Ltd., a wholly-owned subsidiary of Triple Flag Precious Metals Corp. Under the terms of the agreement, Allied will receive a US$53 million upfront cash payment and an ongoing payment equal to 10% of the spot gold price. Triple Flag will have the right to purchase 3% of the payable gold produced at each of the Agbaou and Bonikro mines, subject to a step-down to 2% after set delivery thresholds.

The Stream Transaction crystallizes significant value in Allied’s Côte d’Ivoire Complex (CDI Complex), and enables the advancement of initiatives designed to incrementally increase asset value beyond the life of mine plans, unlocking upside potential without diminishing shareholder equity value.

“We are delighted to partner with Triple Flag on this streaming agreement. This transaction not only underscores the inherent value of our Côte d’Ivoire assets, as it implies a valuation multiple significantly higher than that at which the Company went public and the price at which the Company’s shares currently trade in the market, but it also provides us with the financial flexibility to advance our exploration, growth, and optimization initiatives at a competitive cost of capital, which is significantly better than other alternatives evaluated, including equity financing,” commented Peter Marrone, Chairman and CEO. “Our goal is to unlock significant value for our shareholders while ensuring sustainable and responsible growth across our impressive asset portfolio. In the case of the CDI Complex in particular, this transaction allows us to accelerate the realization of its significant upside value.”

Key Terms

• Triple Flag will have the right to purchase 3% of payable gold from each of the Company’s Agbaou mine and Bonikro mine
  • Under the Agbaou Stream, the gold stream rate will step down to 2% of payable gold after the delivery of 29,000 ounces of gold.
  • Under the Bonikro Stream, the gold stream rate will step down to 2% of payable gold after the delivery of 39,300 ozs.
• Triple Flag will make ongoing payments of 10% of the spot gold price for each oz delivered under the Streams.
• The Streams are subject to a period of certain minimum deliveries. From 2024 to 2027, an annual minimum of approximately 2.50 to 2.75 thousand gold equivalent ounces will be delivered under the Agbaou Stream and an annual minimum of 3.50 to 4.25 thousand GEOs will be delivered under the Bonikro Stream.
• The Streams will cover the existing mining and exploration licenses for the Agbaou and Bonikro mines.
• Triple Flag has committed to work with Allied to identify social programs in the communities surrounding Bonikro and Agbaou to support with separate additional investment.

Transaction Rationale

• Crystallizes Significant Value in the CDI Complex: The transaction recognizes the inherent value of the Company’s CDI Complex and implies a valuation multiple significantly higher than that at which the Company’s shares currently trade in the market and the price at which the Company went public. The CDI Complex comprises the Agbaou and Bonikro mines, which are located in Côte d’Ivoire within the Birimian Greenstone Belt. Allied is targeting a sustainable production platform of 180,000-200,000 gold ounces per annum on a combined basis and a mine life greater than 10 years for the complex, driven by an extensive exploration program, cost optimizations, and process improvements aimed at extending mine life and increasing value.
• Attractive Cost of Capital: The Company evaluated different financing options as part of this process, concluding this transaction provides much better cost of capital than any other alternative, including equity financing. The streaming agreement offers a competitive cost of capital based on Proven & Probable Mineral Reserves and remains favorable when assuming Mineral Resource conversion and exploration upside.
• Enhanced Financial Flexibility: The Advance Amount ensures self-funding for Allied’s extensive exploration program for the CDI Complex, with a total of US$16.5 million allocated for 2024 to advance highly prospective sites such as Oume, Akissi-So, Agbalé, and other targets. It also allows for the acceleration of improvement projects to increase the reliability of operations, optimize plant capacity, and brings forward value and extensions of mine life. Allied expects this flexibility to facilitate capturing further upside beyond the current life of mine plans. These enhancements are designed to increase asset value and unlock upside potential without diminishing shareholder equity.

Closing of the transaction and funding of the Advance Amount is subject to certain conditions precedent, including certain third-party consents and agreements, and completion of related security documents which are expected to be completed in short order.

Financing Strategy

The Company’s ability to unlock the significant value in its large and expanding mineral inventory is supported by the financial flexibility needed to internally fund these optimizations and growth initiatives. Based on recent gold prices, the Company expects to be fully financed based on cash flows; however, as a precaution, so that the Company is not dependent on the price of gold, Allied is actively executing a select number of non-dilutive alternatives. This strategic direction is prompted by the current capital markets not fully capturing the inherent value of the Company’s assets, leading Allied to seek alternative sources of capital that offer low-cost options with the added benefit of more accurately reflecting true value to market participants.

Given the competitive cost of capital realized via the Côte d’Ivoire stream and strong market feedback, Allied is arranging a minimum $250 million Kurmuk funding package comprising a gold stream and a gold prepay facility on the Kurmuk development project. This comprehensive funding solution is expected to close by the end of September 2024. The prospective stream validates the opportunities at Kurmuk, including its strong geological upside potential, and has attracted significant interest at an attractive cost of capital.

The gold prepay facility would bring forward cash flows and include a built-in gold price hedge amidst favorable market prices. This prepay would begin gold deliveries after Kurmuk’s anticipated mid-2026 construction timeframe, further balancing the cash requirements for its construction.

Lastly, a further benefit of this financing plan is that it will provide the Company further financial flexibility to apply cash flows from existing operations, which are expected to increase because of ongoing operational improvements, toward possible acceleration of expansion plans at Sadiola and maximizing value creation and returns to shareholders.

About Allied Gold Corporation

Allied Gold is a Canadian-based gold producer with a significant growth profile and mineral endowment which operates a portfolio of three producing assets and development projects located in Côte d’Ivoire, Mali, and Ethiopia. Led by a team of mining executives with operational and development experience and proven success in creating value, Allied Gold is progressing through exploration, construction and operational enhancements to become a mid-tier next generation gold producer in Africa and ultimately a leading senior global gold producer.

Qualified Persons

Except as otherwise disclosed, all scientific and technical information contained in this press release has been reviewed and approved by Sébastien Bernier, P.Geo (Vice President, Technical Performance and Compliance). Mr. Bernier is an employee of Allied and a “Qualified Person” as defined by Canadian Securities Administrators’ National Instrument 43-101 – Standards of Disclosure for Mineral Projects.