Allied Gold Corporation 2026 Q2 Earnings Call

Please go ahead. Thank you very much, operator, and thank you to all who are participating on this call.

As some of our management is remote and for efficiency and also for the cadence of this call, I will present our formal presentation, but management is available on the call to address any questions. We are happy to be back with these conference calls, and given that we have had a hiatus on these calls, we thought it would be helpful to provide a recap of who we are and what we are and where we are going as part of our quarterly results. We are in Mali, we are in Côte d'Ivoire, and we are in Ethiopia.

I begin with a discussion about the jurisdictions in which we operate, as there has been much said about these jurisdictions, but again, we hope to give you comfort that these are jurisdictions that are high quality for mining. Mali is prolific, certainly for precious metals mining. We cannot think of a jurisdiction in which within several hundred kilometers there would be a handful of mines that produce between a couple of hundred thousand ounces of production and as much as half a million ounces of production, and it is very supportive of mining, and it has infrastructure for the support of mining. Côte d'Ivoire is new to the mining circle. However, it is one that has advanced very quickly with significant opportunities and certainly our Côte d'Ivoirean complex with Bonikro and Agbaou add to the successes in the country relating to mining.

Ethiopia is very new to mining, certainly precious metals mining. We are the first mechanized mine of scale that will be in production in the country, but it is on the bottom end of the Arabian Nubian Shield. Much has been said about the Arabian Nubian Shield and its potential, and here we are with millions of ounces already in inventory and literally on the cusp of the startup of operations. I begin with a discussion about jurisdictions mostly as an admonition to the laziness and overpenalization of these jurisdictions, particularly for companies that have tier 1 assets as we do. But I also want to make sure that it is clear that this is also a recommendation of the value proposition for discerning investors that are comfortable that we, along with many other companies in these jurisdictions, can manage the geopolitical concerns, manage our operations effectively.

In the context of operations, here we are with Sadiola, a tier 1 generational mine that for 2 decades has been in production, producing more than 8 million ounces in steady state without any interruption. We have a production platform that carries more than 10 million ounces in resources, is a large mineral inventory with a production platform presently of approximately 200,000 ounces, with a plan to take that to closer to 350,000 ounces over the next several years on a sequential basis. Côte d'Ivoire's 2 mines, roughly 17, 18 kilometers apart that we treat as a complex. We are targeting a mine life of 200,000 ounces per year for at least a 10-year period.

In the case of Ethiopia, our next mine, the Kurmuk mine, we expect to produce at least 250,000 ounces per year, and we expect that production to begin this quarter. Let me put a fine point to it. When we say this quarter, we're in commissioning in the month of August. We expect to be in production in the month of September. What I think is the true value proposition here is not just the particular assets, but the fact that we are unique in that we are a mid-tier gold producer, but we are underpinned by high-quality assets and in particular, on the opposite sides of the continent in Mali, in the case of Sadiola, and in Ethiopia, in the case of Kurmuk, by 2 tier 1 generational mines. A unique mid-tier gold producer with 2 tier 1 mines in the portfolio.

For the second quarter, we had strong performance that carries the momentum into the second half of the year, with higher production expected from operational improvements and of course, the startup of Kurmuk. We are on track to achieve annual guidance from our producing mines. The drivers for Sadiola will be higher feed grade, and throughput increases. In the case of Bonikro, we're ahead in the sequencing in the first half of the year. We expect to see the feed grade to a level that is higher in the second half of the year, and the throughput will vary quarter to quarter, but production will exceed our annual guidance with a fourth quarter production that exceeds the third quarter, and the third quarter is slightly better than Q1 and Q2.

Agbaou is now at a steady state of production, and we expect its production to be consistent with the first and second quarter for the second half of the year. With that, we expect to see cost improvements on what has already been seen as a cost improvement from Q1 to Q2 and from last year to this year. We're advancing our growth project, which is Kurmuk. That's advancing as planned. As I mentioned a moment ago, we are in commissioning, and we expect that to be in production before the end of this quarter.

We have a strong financial position, while we show in this presentation a pro forma cash balance of just under half a billion dollars after giving effect to the Zijin Gold strategic investment, we do end the quarter with more than $190 million in the treasury, more than sufficient to fund the business of this company. We have impressive exploration potential with a budget that is $36 million. We just increased the budget to the second half of the year because of the exploration successes that we experienced in the first half of the year. In terms of our operations, just over 97,000 ounces for the second quarter, just over 193,000 ounces for the first half of the year, and an all-in sustaining cost that is below $2,200 per ounce sold.

In the case of Sadiola, production is expected to increase, as I mentioned, in the second half, that is driven by increased feed grade and throughput. We're targeting to meet our annual guidance. Costs are expected to trend down, driven by higher production and lower expenditures. We continue to progress improvements to lower costs, we're advancing several strategy, one of which will lead to the improvements to costs, which is a power solution that makes us less reliant on older diesel generators, a refresh of those generators, but also applying a solar power solution that will represent a significant portion of power at that operation. In the case of Bonikro in Côte d'Ivoire, our production exceeded our plan for the first half of the year due to higher grades and throughput.

We took on a challenge in 2023 and 2024 through 2025 of waste removal and stripping to get to higher grade material at Bonikro, we said that by 2026 we would be in a position to be meeting our goals of getting that higher level of production, we have demonstrated that we have done that. The same is true for Agba where production is expected to remain constant for the second half of the year, tracking to meet guidance, but at better costs than we had been experiencing in the first half of the year and last year. For the Côte d'Ivoire platform, we've increased mine life that is supported by a new area of mineralization that is now in development. We are advancing further exploration targets. In the case of Agba, we've increased proven and probable reserves by 60%.

We have advanced our projects to the point where, whereas initially we were saying that we expect to get production of 180,000 ounces per year for 10 years, we're now at a point where we can demonstrate that we can get that 10 years of production, but at 200,000 ounces per year. A little bit more on each of the operations. Sadiola, again, a generational asset with significant mine life and mineral endowment. We are in transition from a mine that was reliant on oxide ores to fresh ore. That first phase expansion now allows us to take more than 60%, as much as 70%, of fresh ore through that plant. We're advancing a process of control upgrades, pre-leach thickener to increase efficiency and reduce operating costs. I mentioned the solar power strategy to further improve costs.

We have an organic expansion plan that takes us initially to that 200,000 ounces, as I mentioned, which is where we are now, and then to a production level that is expected to be closer to 250,000-275,000 ounces, and ultimately to a goal of between 300,000 and 350,000 ounces. We are making new oxide discoveries. We are making new discoveries on a platform that's already 10 million ounces of resources, of which more than 7 million ounces is proven in probable reserves. Short term, 200,000-230,000 ounces of production, including this year. That will progressively increase within the next year and a half, and we average a production of in excess of 300,000-350,000 ounces as an average, with several years at closer to 400,000 ounces.