The corporation behind the Kurmuk Gold mine in the Benishangul-Gumuz Regional State, Allied Gold Corp, is getting ready to settle roughly USD 66 million in arrears to an Egyptian company in an attempt to increase its ownership part in the mining enterprise. The buyout is scheduled to occur over the course of three installment payments, which will begin in September 2024 and end in September 2027.
The action would increase Allied Gold’s ownership stake in Kurmuk Gold to 93%, as per a business report this week. The Ethiopian government owns the remaining nine percent.
Nevertheless, through base erosion and base shifting in the Allied Gold partnership, the Egyptian government-affiliated conglomerate Asec Company for Mining (ASCOM) and its parent company Qalaa Holdings will continue to have holdings in Kurmuk. Kurmuk Gold is still listed in Qalaa Holdings’ annual reports, indicating that Egyptian investors continue to have sway over the company despite its convoluted and unclear ownership structure.
A May 2024 business report states that Qalaa will have at least 11.5 million shares in Kurmuk Gold following the transfer of the extra shares to Allied.
An exploratory license for a possible gold mining location in Kurmuk, Benishangul-Gumuz, close to the Sudanese border, was first obtained by ASCOM. The company quickly gave Allied Gold Corp, a Canadian company, a 64 percent share in Kurmuk Gold after the political shift of 2018. According to insiders, there was concern at the time about the potential security risks posed by an Egyptian enterprise operating close to the Grand Ethiopian Renaissance Dam (GERD).
Nonetheless, ASCOM kept a sizeable stake in Kurmuk Gold through its wholly-owned subsidiary, ASCOM Precious Metals (APM). The company is currently getting ready to pay USD 65.6 million to Allied to transfer ownership of the gold mining operation.
The Reporter was informed by sources that Allied Gold is getting ready to settle the payments, but the company’s murky links to Egypt and convoluted ownership structure are still in place.
At the top of the ownership hierarchy are APM and its parent business ASCOM. They are all a part of Qalaa Holdings, a massive company that oversees numerous subsidiaries. Among them are African Railways, Nile Logistics, Gozour, Asec Holding, Taqa Arabia, Tawazon, Egyptian Refining Company, and ASCOM.
The company is well-known in the Middle East and East Africa, especially in Sudan.
The National Service Projects Organization (NSPO) of Egypt paid around USD 53 million for 27.5 million shares, or a 20 percent ownership, in Taqa Arabia last year. NSPO was established in 1979 and produces goods for the Egyptian government in the petrochemical and agricultural industries, among other fields. Due to the acquisition of a share in the Qalaa Holdings subsidiary, it now has a loose connection to Kurmuk Gold in Ethiopia.
Allied gold Corp is not the same as the Australian-based Allied mining corporation, even though they have the same name. The Allied GoldCorp (AGC) that is present in Ethiopia was incorporated in the Seychelles and functions as a Canadian business thanks to a reverse listing procedure that involves Mondavi Ventures Ltd. Its ownership structure is likewise unclear and flexible.
According to reports from the International Consortium of Investigative Journalists, the Paradise Papers and the Panama Papers both cite the AGC and its affiliates. The filings also list Hailemariam Mulugheta and Brox Worku as AGC’s Ethiopian stockholders.
Financial limitations have prevented Allied Gold from acquiring complete ownership of Kurmuk, despite the fact that it obtained a mining license in 2021 and purchased a majority position in the company from ASCOM in 2018. According to reports, Mondavi Ventures Ltd. has committed to raising USD 263 million from the Canadian stock exchange to assist Allied in funding its most recent acquisition of APM.
According to its reports, Mondavi is also anticipated to raise further money for Allied, which needs as much as $500 million to complete the Kurmukgold processing plant.
A legally binding agreement was signed in May 2023 by Allied Gold, Allied Merger Corp (AMC), and Mondavi Ventures Ltd to finance a minimum of $300 million in proceeds.
“The current shareholders of each of Allied and AMC will receive common shares of Mondavi, resulting in a reverse take-over of Mondavi,” the paper reads. Mondavi is an unlisted reporting issuer in Canada.
Even though Allied Gold has obtained an extraction license for an area of land that is almost 100 square kilometers and stretches from Kurmuk to the area around Assosa, the business has currently reduced its efforts to focus exclusively on Dish Mountain, which is thought to contain substantial gold reserves.
Allied intends to carry out exploration work in the meantime in Tsenge, Mestefinfin, and Setota, all of which are close to the original Kurmuk location.
On its website, Allied states that it also manages projects in Mali and Cote d’Ivoire.
“Allied is setting up a minimum USD 250 million Kurmuk funding package comprising a gold stream and a gold prepay facility for the Kurmuk development project, given the competitive cost of capital realized via the Côte d’Ivoire stream and strong market feedback.” It is anticipated that this all-inclusive funding solution will close by the end of September 2024. A study published this week states, “The prospective stream has attracted significant interest at an attractive cost of capital and validates the opportunities at Kurmuk, including its strong geological upside potential.”
A few months prior, Kurmuk Gold’s managers had complained in writing to the Ministry of Mines that security concerns and the illegal artisanal mining settlement in Benishangul prevented the business from accessing its locations.
On the other hand, according to a corporate report this week, civil works at the location are moving along nicely.
Kurmuk Gold manager and Allied Gold stockholder Brox Worku talked with The Reporter about the company’s workflow but asked that none of his remarks be included in this piece. He did not offer legitimate business reports and records, nor did he reply to written inquiries from The Reporter.
Company reports state that exploration activity has proven more than 60,000 tons of gold deposits in Kurmuk. According to sources, Kurmuk Gold expects to spend USD 155 million on operations in 2024, with the first gold pour anticipated in mid-2026.