Allied Gold Corporation Announces Third Quarter 2023 Results

Marking A New Era As A Public Company And The Start Of Asset Optimizations And Robust, Fully Funded Growth Initatives Across Its Portfolio

TORONTO, Nov. 9, 2023 - Allied Gold Corporation (TSX: AAUC) ("Allied" or the "Company") is herein reporting its financial and operational results for the third quarter of 2023. Production totaled 84,473 gold ounces ("oz") with sales of 91,164 oz at total cost of sales, cash costs(1) and all-in sustaining costs ("AISC")(1) per gold ounce sold of $1,593, $1,424, and $1,546, respectively. The current quarter marked a significant transformation and evolution of Allied's corporate structure, as the Company completed its public listing and begins executing its operational optimization and growth strategy. This growth strategy, which is underpinned by fully permitted and shovel-ready projects, will be developed in a sequenced and phased approach to optimize capital spend while delivering a compounded increase in cash flow and profitability.

The Company expects the fourth quarter to show sequential improvement over the current period, which was impacted by expenses related to the business combination and the ongoing transformation. Notably, the current management team assumed their positions during the final month of the third quarter, making the upcoming quarter the first full period under new leadership. Despite these transitional challenges, as anticipated, a progressive increase in the number of ounces produced has occurred year-to-date. Production in the first quarter was 78,617 oz, after which several efforts were undertaken to stabilize and normalize production in the second and third quarters in a range of 84,000-86,000 oz, and the Company expects the strongest quarter of the year in the fourth quarter at over 100,000 oz. With this, the Company expects that annual production will be in the range of 350,000 to 360,000 oz, as previously disclosed. Mostly, the ability of the Company to reach the higher end of the range depends on the performance at Agbaou, which is undergoing an operational review and transformation. Initiatives have been undertaken to improve the shorter and longer-term performance of Agbaou, and certain steps to improve long term performance and value, such as contract mining management, process optimizations and life of mine planning are being actioned on. These initiatives are expected to impact short-term production but bring significant benefit to the long-term performance and sustainability of the asset.

Current producing mines should reasonably be expected to produce at least 375,000 oz per year on a sustainable basis, although with an increase anticipated during the next several years following the execution of optimization and brownfield growth initiatives being pursued at all operations. In particular, the Company expects increased production during 2024, and then further into 2025, before a step increase in production from significant growth projects that are expected beginning in 2026.


THIRD QUARTER HIGHLIGHTS

Financial Results – Strong Liquidity to Support Growth Initiatives

- Third quarter net loss(2) of $194.6 million or $0.98 per share basic and diluted.

- Adjusted net earnings(1)(2) of $1.4 million or $0.01 per share basic and diluted, largely reflecting the non-recurring nature of transaction related expenses and one-off items during the Company's transition to a public company.

- Cash flows from operating activities of $2.2 million for the three months ended September 30, 2023.

- Excluding the transaction related items, and their working capital movement impact, net cash generated from operating activities would go from the reported $2.2 million to $35.5 million on a normalized basis.

- Cash flows from operating activities are expected to increase in the fourth quarter, with increased production contributions and lower costs driving sequential improvements.

- Cash and cash equivalents totalled $198.6 million. Furthermore, the Company expects to have financing available under a three-year $100 million facility, to provide additional financial flexibility for the execution of the Company's business plan.


Operational Results – Sustainable Production Base Set for Improvement

- Production of 84,473 oz. Sequential improvements expected in the fourth quarter to be driven by increased equipment performance at Sadiola, completion of Stage 1 stripping, along with ahead-of-schedule dewatering, at Bonikro and higher rates of ore mined at Agbaou.

- Total cost of sales, cash costs(1) and AISC(1) per gold ounce sold of $1,593, $1,424, and $1,546, respectively.

- Allied has begun developing an optimization plan encompassing a series of enhancements at existing mines to improve efficiency and costs across all the Company's operations. These enhancements include among others, upgraded and improved power generation facilities, plant instrumentation upgrades, enhanced procurement and supply chain processes and improved management and other contractor interactions to drive improved and consistent mining performance. These efforts complement ongoing exploration initiatives aimed at extending mine life, primarily at the Company's mines in Côte d'Ivoire as well as expanding the inventory of oxide ores at Sadiola.


Board Approval of Key Growth Initiatives

- The Board of Directors approved the advancement of the expanded Kurmuk project through a two-phase development plan, bolstered by the strategic consolidation of the minority interest, bringing the Company's ownership to 100%(3). While the project requires a total capital investment of approximately $500 million, the first phase, with a commitment of $185 million to be spent through 2023 and 2024, includes key milestones such as engineering, early works, major equipment procurement, civil and earthworks, key infrastructure progression, camp establishment, mining contractor mobilization, and pre-stripping at Ashashire among others. Upon completion of this phase, the Company will assess further optimizations before proceeding with the remaining capital allocation. The expanded project aims for average annual production of nearly 275,000 oz for the first four years and over 240,000 oz per year over a 10-year mine life at an AISC(1) targeted below $950/oz. The development is to be funded by cash on hand, including from the recent financing, and cash flows from producing mines, with the first gold pour expected in Q2 2026.

- The Board approved the advancement of the Diba Project, located 15 km south of the Sadiola Gold Mine, with a total capital allocation of $12 million in 2023 and 2024 including expenses for an access road to transport ore to the Sadiola plant with initial ore processing targeted for H1 2024. Diba's high-grade oxides are set to enhance Sadiola's production, and expected to reduce costs, improve margins, and increase cash flows, supporting the Company's growth strategy during Kurmuk's development. The acquisition of Diba, where mining is expected to begin in the second quarter of 2024, aligns with Allied's plans to maximize oxide ounces at Sadiola and to expand in established mining jurisdictions where it has deep technical, geological, and operational expertise.

- The Board of Directors has approved the Phase 1 Expansion of Sadiola, entailing a total capital expenditure of approximately $61.6 million, slated for implementation in 2024. This expansion marks a significant shift for Sadiola, transitioning from oxide ore to fresh rock gold production. Upgrades to the existing plant, originally designed for oxide ore processing, will enable it to handle up to 60% of the total ore feed as fresh rock. As a result, Sadiola's annual gold production is expected to rise from 175,000 oz to an average of approximately 200,000 oz per year between 2024 and 2028, based solely on Mineral Reserves. Short-term production enhancements will be driven by the contribution from Diba's high-grade oxide ore, aiming for an average annual production exceeding 230,000 oz in the next two years. Looking ahead, the Phase 2 Expansion is on the horizon, set to commence construction in 2027. This expansion involves the construction of a new processing plant dedicated to processing fresh rock starting in 2029. It is anticipated to elevate production to an average of 400,000 oz per year for the initial 4 years and maintain an average of 300,000 oz per year over the mine's 19-year life. AISC(1) is projected to decrease to below $1,000 per oz.


Health, Safety and Sustainable Development

- In September, the Company released its 2022 ESG report, adhering to the Sustainability Accounting Standards Board Standards for metals and mining. This report formally delineated the progress and commitment made in crucial areas such as health and wellbeing, tailings management, and generating shared value for all stakeholders.

- For the nine months ended September 30, 2023, the Company reported 4 Lost Time Injuries ("LTI"), down from 6 LTI in the same period last year, resulting in an improved Company Lost Time Injury Rate ("LTIR") of 0.37(4).


OPERATING RESULTS SUMMARY

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