African gold miners shouldn’t suffer because of geopolitical risk
African gold miners should not sell at a discount to their peers due to heightened geopolitical risk. “I would argue that geopolitics is an input into the return calculus, but it is not the determinative point,” says Peter Marrone, chairman and CEO of Allied Gold.
Allied Gold has two producing mines: Sadiola in Mali and the Côte d’Ivoire complex. It is also developing the Kurmuk advanced greenfield project in Ethiopia. Africa is a continent of 50-odd countries, some more stable than others. But the bigger question is how a mining company generates returns. Factors include permitting times — longer in other jurisdictions like Canada — the mineral endowment, grades, and the quality of the personnel.
According to Marrone there are no places in the world that deliver the types of returns that one can get in Africa. If a place delivers a better return than another, then it should be valued better than that place that delivers the lower return.
Last year Allied Gold produced 343,000 ounces and this year’s guidance is 400,000 oz. Marrone said that, between adding ounces through exploration at its existing mines and bringing its Kurmuk project online in 2026, Allied is looking to double its annual production.
