Allied Gold (TSX, NYSE: AAUC) said recent drilling at its Kurmuk property in western Ethiopia has identified at least five new target areas, bolstering the case for a high-volume gold operation. The stock hit an all-time high.
Hole TSDD041 in the Tsenge–Hiccup Hill zone cut 16.4 metres grading 13 grams gold per tonne from 43 metres depth, while hole TSDD036 in the Tsenge–Setota zone cut 10.5 metres at 1.85 grams gold from 161 metres downhole, Allied said Thursday in a statement.
The company’s update highlights “the potential upside at the Kurmuk asset in terms of exploration,” National Bank Financial mining analyst Mohamed Sidibé said in a note. He called the drilling results “constructive.”
Allied shares jumped 9% to $29.40 Friday morning in Toronto, boosting the company’s market value to about $3.6 billion (US$2.6 billion). Earlier they hit $30, their highest level since the stock began trading in September 2023. Allied closed unchanged Thursday in Toronto.
More work needed
Besides Tsenge, the other new zones at Kurmuk include Dul, Urchin, Western Prospects and Northern Prospects. With known gold mineralization and associated large-scale gold-in-soil anomalies, these areas could, “with more work,” provide additional resources and reserves, Allied said.
Other drilling highlights include hole DMDD774 in the Dish Mountain zone, which cut 12.6 metres grading 2.93 grams gold from 403 metres downhole. Hole DMDD752, in the same zone, cut 9.3 metres at 3.35 grams gold from 15 metres depth.
Crews at Kurmuk have drilled 193 holes totalling 39,064 metres since mid-2024. Allied’s exploration program is designed to extend the mine’s life to at least 15 years – up from the 11-year estimate that’s supported by mineral reserves, the company says.
Located within the Arabian-Nubian shield, about 500 km northeast of the Ethiopian capital, Addis Ababa, Kurmuk is slated to begin operations as an open-pit mine in mid-2026. A 6.4 million tonne-a-year mill will process the ore.
Higher output
Gold mineralization at Kurmuk is hosted in quartz–carbonate–pyrite veins associated with sheared lithological contacts and concentrated within areas of linear extension.
Management is targeting average gold output of about 290,000 oz. annually during the first four years, and 240,000 oz. over the mine life. All-in sustaining costs are projected at less than US$950 per ounce. Over time, the goal is to lift annual production above 300,000 oz., the company says.
Kurmuk’s Dish Mountain and Ashashire deposits together hold 57.9 million measured and indicated tonnes grading 1.68 grams gold for contained metal of 3.12 million oz. gold, according to the company’s website. Inferred resources are estimated at 5.98 million tonnes grading 1.62 grams gold for contained metal of 311,000 oz. gold.
A resource update is expected in early 2026. Allied’s five-year exploration goal for Kurmuk is to reach 5 million oz. of resources.
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