Allied Gold CEO James Marrone highlighted the company’s strengthened position during a conference call following the release of its second-quarter earnings, emphasizing that Allied is now more attractive to investors compared to when a planned takeover deal was announced earlier this year.
In January, Allied agreed to be acquired by Chinese miner Zijin Mining Group at a price of $44 per share, marking a record high for the Canadian miner’s stock. However, the proposed acquisition was cancelled last week, sending Allied’s shares down nearly 19 percent. Instead of the full buyout, Zijin agreed to purchase a 9.2 percent stake in Allied at a significantly lower price of $32.55 per share, totaling approximately $417 million.
Allied operates gold mines in West Africa, including Mali and Ivory Coast, and produced more than 97,000 ounces of gold in the second quarter. The company plans to start operations next month at its new Kurmuk mine in Ethiopia, and is preparing a major expansion at its Sadiola mine in Mali.
Marrone, who previously co-founded Yamana Gold before selling that company in 2022, said Allied has made considerable progress since the initial takeover announcement. “We have delivered on our plans that improve the company and increase that value,” he said, describing Allied as offering a “unique and strong value proposition.”
Despite his optimistic view, Marrone expressed frustration with analysts and some investors who undervalue the company’s shares. He attributed this to a tendency to apply a broad geopolitical risk perception to all mining operations in Mali, regardless of individual company performance or asset quality. While other Canadian miners operating in the region, such as Barrick Mining Corp., have faced significant operational interruptions due to security concerns, Allied’s Sadiola mine has been in continuous operation for over two decades, Marrone said.
He argued that this generalization results in an excessive discount on Allied’s assets, stating, “This is overpenalization. This is not a failed state. This is not a country that is in collapse. You cannot run a business if that were the case.” Marrone urged investors to recognize the stability and quality of Allied’s operations, describing the company’s current valuation as a compelling opportunity for discerning stakeholders.