Allied Gold Corp (TSX:AAUC), Africa's fastest-growing gold producer, has ambitious plans for the future.
Recently listed on the Toronto Stock Exchange, the company aims to double its gold production by 2029.
Jason LeBlanc, the chief financial officer, sits down with Thomas Warner from Proactive to discuss the company's growth strategy, recent financing, and why he believes Allied Gold is undervalued by the market.
Thomas Warner (TW): Your company has been described as Africa's fastest-growing gold producer. Could you elaborate on what sets you apart?
Jason LeBlanc (JL): Certainly, Tom. We're a newly public company with a significant production scale already in place. We're not just a startup; we have a market cap of around $1 billion and are currently producing about 375,000 ounces of gold. Our growth strategy is aggressive; we aim to increase production to over 600,000 ounces by 2026 and double it to 800,000 ounces by 2029. Our assets are strategically located in Mali and Cote d'Ivoire, with a developmental asset in Ethiopia.
TW: You've successfully raised a substantial amount of capital recently. Could you discuss the investment case you're presenting to potential investors?
JL: Absolutely. We recently secured $267 million in financing, which will be instrumental in achieving our growth targets. We believe the market undervalues us. Our internal valuation suggests a worth of over $3 billion, as opposed to the current market cap of $1 billion. We're already generating about $200 million of EBITDA, and we expect this to quadruple to about $800 million in the next five years.
TW: That's impressive. Could you delve deeper into the growth metrics that make Allied Gold Corp (TSX:AAUC) an attractive investment?
JL: Of course. One of the key aspects is our focus on financial measures, particularly cash flow and free cash flow. We're not just looking at increasing production; we're looking at doing so efficiently. The growth we're targeting comes at lower unit costs than our current production, providing us with significant operating leverage that will drive margins and shareholder returns.
TW: Your assets are spread across multiple African countries. Could you provide more details?
JL: Certainly. Our cornerstone asset is the Sadiola mine in Mali, which has been producing for about 20 years. We're investing $60 million to increase its production. We also have assets in Cote d'Ivoire and a developmental asset in Ethiopia called Carmack. Carmack is particularly exciting because it's a high-grade gold opportunity expected to start production in 2026.
TW: The management team seems to have a rich history. Could you elaborate?
JL: Absolutely. Most of the new management team, including myself, are former executives from Yamana Gold (TSX:YRI, LSE:AUY). We bring a wealth of experience in high-growth companies and are well-versed in asset optimisation. We're committed to executing our aggressive growth strategy effectively.
TW: What about future exploration? What can investors expect?
JL: We have a robust mineral endowment, with about 10 million ounces of reserves and over 59 million ounces in the resource category. Our exploration efforts are ongoing, and we expect these numbers to grow significantly in the coming years.
TW: Finally, what would you say is the most compelling reason for investors to consider Allied Gold Corp?
JL: The most compelling aspect is our balanced approach. We have a strong current production base, and we're poised for significant growth in both production and financial metrics. We're backed by a strong management team and robust mineral reserves, making us a highly attractive investment opportunity.