Allied Gold’s Capital Expenditures Pile Up As Execs Eye Production In 2026

Ethiopian Electric Power slated to finalize transmission line in coming months

Allied Gold Corporation poured more than USD 187 million in capital expenditures into the Kurmuk gold mining project in Benishangul-Gumuz in the nine months leading up to October 2025, according to a document filed with the US Securities and Exchange Commission.

Allied Gold holds three gold exploration licenses in Benishangul through its subsidiary Kurmuk Gold Mining PLC (KGM) and its executives say they will begin gold production in mid-2026, almost a decade after the firm acquired the concessions.

Before the acquisition in 2018, the Kurmuk gold project was under Asec Company for Mining (ASCOM), a conglomerate with strong ties to the Egyptian government.

KGM holds a 20-year concession for gold mining in a 100 square kilometer plot covering the Dish Mountain and Ashashire deposits, with gold exploration licenses covering an additional 1,450 square kilometers in Benishangul, according to a prospectus presented to investors in 2023.

However, the firm has been unable to commence gold production over the past several years owing to a number of issues.

In July 2024, the company penned a letter to the Ministry of Mines complaining that its operations in the gold-rich Benishangul-Gumuz Regional State were being hindered by regional authorities, whom it accused of refusing the company access to mining sites.

The firm accused the Benishangul-Gumuz Water, Mine, and Energy Resource Development Bureau of refusing to endorse the exploration licenses granted to KGM by the Ministry.

An investigation by The Reporter found that regional officials were pushing back against KGM’s concessions due to questions surrounding “the legitimacy of the licensing process” and concerns about what it would mean for a large number of artisanal miners who depend on the land allotted to KGM to make a living.

The issues seem to have cleared up, and Allied Gold reports that engineering works have been substantially completed, and construction has entered the mechanical erection, earthworks, and power-line installation phase.

The state-owned Ethiopian Electric Power (EEP) is scheduled to finalize a transmission line to the mining site in early 2026, ahead of commissioning in the second quarter, according to the document filed with US regulators.

“The key focus during the quarter and the rest of the year is on logistics for transporting equipment and materials to the site, finishing technical concrete works around the grinding area, and advancing the mechanical erection at the processing plant site,” it reads.

Allied is banking on producing 290,000 ounces of gold annually in Kurmuk, according to the document.

The project, which Allied describes as “a key growth asset within its African portfolio,” is designed to become a cornerstone mine as the company targets group-wide production of over 800,000 ounces by 2029. Allied also operates gold mines in Mali and Côte d’Ivoire.

Analysts who spoke to The Reporter contend that Kurmuk has the potential to transform Ethiopia’s gold-export base and attract renewed investor confidence in the mining sector.

The project, located about 700 kilometers west of Addis Ababa, is also expected to generate significant local employment and fiscal revenues through royalties and taxes once commercial production begins.

Industry observers caution, however, that the project’s success depends on stable power supply, regulatory coordination, and security in the Benishangul-Gumuz region. Previous investor reports have underscored potential sensitivities given the mine’s proximity to the Grand Ethiopian Renaissance Dam (GERD) and past joint-venture ties involving Egyptian interests, which Allied Gold has since been consolidating through staged buyouts.

In October 2024, Kurmuk Gold transferred 5.75 million shares to ASCOM Precious Metals Investment Holding BVI, a subsidiary of the Egyptian Asec Company for Mining (ASCOM).

ASCOM, an Egyptian conglomerate affiliated with the government in Cairo, had previously run the Kurmuk project for a decade beginning in 2007 before its license was revoked over security concerns. The license was transferred to Allied Gold Corp in 2017.

ASCOM exited the venture in Benishangul by selling 64 percent of its stakes to Allied while retaining 35 percent through its subsidiary, ASCOM Precious Metals (APM). It later announced that it had sold the remainder of its shares.

The Ethiopian government is entitled to a seven percent stake in the venture in exchange for infrastructural support, including roads and power supply.