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ALLIED Gold plans to introduce a dividend and share buyback programme despite a sharp drop in quarterly cash inflows and rising operating costs, as production gets underway at its new Kurmuk mine in Ethiopia.
The Toronto- and New York-listed gold producer said it was considering a base dividend from 2027. It also plans a share buyback programme of up to 10% of its public float, subject to approval from the Toronto Stock Exchange.
Allied said its capital allocation priorities included “continuing to invest in growth, maintaining a strong balance sheet and returning capital to shareholders”.
The plans follow a decline in operating cash inflows to $12.3m in the September quarter from $182.1m a year earlier, despite higher gold prices and increased production.
The decrease partly reflected $93.8m in receipts from gold streaming arrangements in the previous year, which were not repeated.
Higher tax payments and working capital needs, including the accumulation of ore stockpiles and the timing of value-added tax recoveries, also affected cash generation.
All-in sustaining costs (AISC) increased 14% to $2,378/oz from $2,092/oz, while gold production rose 5% to 91,195 oz.
Revenue was up 17% to $358.1m and adjusted earnings increased to $49.3m from $33.3m.
Costs rose sharply at Sadiola in Mali, where AISC increased to $2,876/oz from $2,224/oz. Production was almost unchanged at 42,291 oz, although Allied expects operational improvements and higher-grade ore to support stronger performance in the fourth quarter.
In Côte d'Ivoire, production at Bonikro increased 30% to 28,644 oz, while AISC declined to $1,670/oz.
Allied expects cash generation to improve following the start of production at Kurmuk, which commenced operations after the September quarter ended. The mine is expected to contribute 25,000 to 35,000 oz this year before increasing production to between 240,000 and 270,000 oz in 2027.
Group production is forecast to rise to between 615,000 and 670,000 oz next year, compared with 400,000 to 435,000 oz expected in 2026.
Kurmuk is expected to become Allied's lowest-cost operation, while the completion of major construction work should reduce capital expenditure.
Allied ended September with $379.1m in cash, compared with $479.8m at the end of December 2025.
The proposed shareholder returns follow the collapse in July of Zijin Gold's $4bn takeover of Allied, which was announced in January. The Chinese company instead acquired a 9.2% stake in Allied through a $295m investment completed in August.
Allied, led by chairman and CEO Peter Marrone, has resumed evaluating the next stages of its phased expansion at Sadiola.
Marrone previously headed Yamana Gold, which was acquired by Agnico Eagle and Pan American Silver in 2023 after Gold Fields withdrew from an earlier takeover agreement.