UAE-based investment fund Ambrosia Investments will acquire a 50% stake in Canadian gold mining firm Allied Gold Corporation’s operations in Mali, it said in a press release (pdf). The agreement had an aggregate value of USD 500 mn, including a USD 250 mn upfront cash-consideration, and will go towards the expansion of Allied Gold’s Sadiola mine in Mali and the development of the Kurmuk project in Ethiopia.

The details: The partnership will see Allied issue Ambrosia 46 mn shares — approximately 12% of its issued and outstanding shares — on a private placement basis at CAD 3.40 (c. USD 2.40) apiece. The aggregate proceeds of CAD 156.6 mn (ca. USD 190.5 mn) will be used to fund Sadiola’s expansion. Some USD 375 mn will go towards the acquisition of a stake in a joint venture with Allied to govern the mine, while USD 110 mn will go towards acquiring a 12% stake in the parent company.

ALSO- Emirati firm ATGC will also provide energy to the Allied’s Sadiola gold mine in Mali starting next summer and for the next 12 years.

Allied’s ambitions: The investment comes as Allied looks to expand extraction from the Sadiola mine to 400k ounces per year, and open the Kurmuk gold mine in Ethiopia which is set to be operational during the middle of next year and produce 290k ounces of gold per year during the first four years.

Behind the partnership: The acquisition came on the back of “the commitment of the government of The United Arab Emirates in Africa at large,” Allied CEO Peter Marrone said. The development is a vote of confidence for Mali mines after government policy caused difficulties for extracting companies in the country, the Financial Times reports.

Allied is eyeing a listing on the New York Stock Exchange this year, and is expecting a decision on its application during 1H this year, Bloomberg reports citing CEO Peter Marrone. The business information service noted a trend of gold equity players looking to the city on the back of big ticket agreements.

Mining has drawn increasing Emirati interest recently, with the formation of the ADQ-Orion USD 1.2 bn JV last month and Abu Dhabi’s International Resources Holding upping production by 32% at its Zambian mining site.

ADVISORS- Stifel Nicolaus Canada and National Bank Financial were Allied’s financial advisors, whilst Cassels Brock & Blackwell and Hogan Lovells International provided legal counsel. Ambrosia tapped SCP Resource Finance for financial advice and A&O Shearman and McCArthy Tétrault for legal counsel.

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