Allied Gold (AAUC) Q3 2026 earnings review
Allied Gold's profit rises, but its 2026 output plan drops
Higher gold prices lifted Allied Gold's third-quarter profit, but a late start at its new Ethiopian mine forced a sharp cut to this year's production plan. The African gold miner grew revenue 17% from a year ago on stronger metal prices and higher grades in Ivory Coast, while mining and fuel costs in Mali pushed total all-in sustaining costs up 14%. Because ore only entered the new Kurmuk plant after September ended, the company cut its 2026 output plan by 21% at the middle of the range.
| Revenue | $358.1M +17.2% from a year ago |
|---|---|
| Profit per share, excluding one-offs | $0.37 +28% from a year ago |
| All-in sustaining cost per ounce | $2,378 +13.7% from a year ago |
| Full-year 2026 production outlook | Cut 21% middle of the range: 417,500 ounces |
⚖️ Verdict: 🔴 Bearish
The story got worse because the Kurmuk delay and rising costs at Sadiola hit this year's targets at the same time. Kurmuk's expected 2026 output dropped to between 25,000 and 35,000 ounces, down from at least 100,000 ounces previously, and Sadiola's unit cost climbed for a third straight quarter to $2,876 an ounce. On the positive side, Kurmuk is now running and management kept its 2027 Kurmuk target unchanged while closing a $299 million share sale to Zijin Gold.
The question now is whether Kurmuk can ramp up fast enough to hit next year's 54% production jump while Sadiola brings its costs down. One view is that three months of high-grade stockpiles at Kurmuk and expiration of gold price caps in December will drive a step-up in 2027 cash flow; the other is that grid power timing in Ethiopia and fuel inflation in Mali will keep squeezing margins. Fourth-quarter production at Kurmuk and unit costs at Sadiola will tell.
🐂 Bull Case
2027 Outlook Still Calls For 54% Growth
Allied Gold mines gold in Mali, Ivory Coast and Ethiopia. The Canadian miner issued its first full-year 2027 production plan of 615,000 to 670,000 ounces, up 54% from the middle of its 2026 range. Kurmuk, its new mine in Ethiopia, will supply 240,000 to 270,000 ounces next year as output climbs to 55,000 to 65,000 ounces in the first quarter.
The company also built 1.5 million tonnes of ore stockpiles at Kurmuk, enough for three months of plant feed at grades above reserve averages. At Sadiola in Mali, management plans solar and battery systems in late 2027 and heavy fuel oil generators in 2029 to cut all-in sustaining costs by $150 to $200 per ounce.
What to watch: first-quarter 2027 gold production at Kurmuk against the 55,000 to 65,000 ounce plan. Hitting that target would confirm the plant can run at about 20,000 ounces per month and keep the 2027 growth plan on track.
Ivory Coast Mines Lifted Production And Profit
Allied Gold operates the Bonikro and Agbaou mines in Ivory Coast, located 20 kilometres apart, as one integrated complex. After stripping away waste rock last year to reach richer ore in Stage 5, Bonikro lifted its third-quarter gold production by 30.5% from a year ago to 28,644 ounces, while its all-in sustaining cost fell 4.8% to $1,670 per ounce.
Exploration also extended the life of the complex. A July reserve update at Agbaou increased proven and probable gold reserves by more than 60%, extending its mine life to 2030 alongside Bonikro's life to 2036. That supports the company's goal of producing at least 200,000 ounces a year from Ivory Coast for over a decade.
What to watch: fourth-quarter waste stripping at the Assondji-So Main pit at Bonikro. Completing that work on schedule will secure ore supply for 2027 and keep unit costs low at the complex.
Zijin Cash And Lower Overhead Helped Margins
On August 10, the miner closed a private placement of 12.8 million shares to Zijin Gold for $298.9 million, leaving cash at $379.1 million at quarter-end. Operating profit rose to 27.3% of revenue, up 9.8 percentage points from a year ago, because general and administrative overhead fell 3.4 points to 6.0% of revenue and financial instrument revaluations swung to a gain, offsetting a 6.6-point rise in other losses.
With Kurmuk now starting up, management plans to launch a share buyback programme for up to 10% of its public float, pending Toronto Stock Exchange approval, and anticipates starting a base dividend in 2027.
What to watch: Toronto Stock Exchange acceptance of the buyback notice and fourth-quarter cash balances. Rising cash after Kurmuk's start-up would show the miner can fund both Sadiola's expansion and shareholder returns.
🐻 Bear Case
Kurmuk Started After Q3, Cutting 2026 Output
Allied Gold previously planned first gold at Kurmuk in mid-2026 and then in August or September. Instead, the company said that "Subsequent to quarter-end, the crushing and supporting infrastructure were completed, ore was introduced into the plant, and the mine commenced production." While medium-voltage grid power arrived in September, the full power line and substations are not due until the end of November.
- 2026 Kurmuk production outlook: cut to 25,000–35,000 ounces, down from 100,000–150,000 ounces
- 2026 total production outlook: cut 21% at the middle of the range to 400,000–435,000 ounces
- 2026 existing mines outlook: trimmed to 375,000–400,000 ounces from 385,000–425,000 ounces
This delay matters because Kurmuk's 2026 contribution has dropped by 95,000 ounces at the middle of the range since last quarter. In addition, the project contributed to a rise in the company's total recordable injury rate to 2.91 per million hours in the third quarter, up from 1.21 in 2025.
What to watch: completion of the full 132-kilovolt power infrastructure at Kurmuk by the end of November 2026. A further delay would force the plant to rely on temporary generators and risk the fourth-quarter ramp-up.
Sadiola Costs Rose For A Third Quarter
Sadiola in Mali is Allied Gold's largest producing mine, generating 46% of third-quarter revenue. Management had postponed cost-reduction and contractor changes at the site, "having previously postponed them during the Zijin Transaction", and only began implementing new mining contractor agreements and equipment replacements this quarter.
Instead of falling, Sadiola's all-in sustaining cost (AISC, a measure of direct mining, royalty and sustaining capital costs) rose to $2,876 per ounce sold, up 4.0% from the second quarter and 29.3% from a year ago. Gold recovery dropped to 79.8% from 88.3% a year earlier as the plant processed more fresh rock, and Allied Gold noted that "Costs for the period have been impacted by geopolitical developments, which resulted in inflationary pressures affecting transportation, fuel, and other consumable costs".
What to watch: fourth-quarter AISC and gold production at Sadiola, where 134,475 ounces produced in the first nine months leaves at least 65,525 ounces needed in the fourth quarter to reach the 200,000-ounce annual floor. Another quarter of high costs would show that contractor updates and higher-grade ore are not offsetting Mali fuel inflation and lower fresh-ore recoveries.
Hedges And Prepayments Cap Gold Price Gains
Spot gold prices averaged $4,262 per ounce in the third quarter, up 23.3% from a year ago. However, Allied Gold realized an average price of $3,863 per ounce, or 90.6% of the market price, because zero-cost gold collars (hedges that cap the selling price on 10,000 ounces a month at $3,125 through December 2026) reduced revenue by $371 per ounce, and streaming agreements took another $59 per ounce.
While the $3,125 collar ceiling expires at the end of 2026, a new obligation takes its place. Starting in October 2026, the miner must deliver 4,035 ounces of gold per month for twelve months under a $125 million prepaid forward arrangement, alongside ongoing stream deliveries at Kurmuk.
What to watch: first-quarter 2027 realized gold price as a percentage of the average market price. A reading that stays well below spot after the collars expire would show that prepaid and stream deliveries still hold back cash revenue.
Material Weaknesses And Takeover Questions Persist
Two governance concerns from prior quarters remain open. First, regarding the C$44 per share buyout by Zijin Gold that was terminated on July 29 in favour of a C$32.55 share placement, the report states only that "the conditions required to complete the transaction were unlikely to be satisfied by the agreed outside date" without naming which conditions failed.
Second, management reported that legacy information technology and process deficiencies remain unresolved as of September 30, concluding that "the Company did not maintain effective internal control over financial reporting". Remediation testing may extend into 2027.
What to watch: the 2026 annual report, when Allied Gold's external auditor must formally attest to internal controls under US rules. An adverse opinion would confirm that control fixes slipped into 2027.
💲 Other KPIs
Total inventories (current and non-current ore stockpiles, gold in circuit and doré bars) rose by $33.9 million in the third quarter by our math, and are up 53.9% from $210.2 million at the end of 2025. The build reflects 1.5 million tonnes of ore stockpiled ahead of the Kurmuk plant start-up, which tied up cash before milling began.
Cash generated from operating activities turned positive at $12.3 million after a $67.4 million outflow in the second quarter, but dropped from $182.1 million a year ago (which included $93.8 million of upfront stream proceeds). Working capital outflows of $63.2 million from stockpile builds and value-added tax receivables, plus $40.1 million in cash taxes, left free cash flow at negative $83.3 million by our math.
Mine-site capital spending equalled 37.1% of revenue by our math, down from $158.9 million in the second quarter but up from $112.0 million a year ago. Construction at Kurmuk accounted for $85.7 million of the quarter's total, while expansion spending at Sadiola took $14.3 million.
🔮 Guidance
Cut. The middle of the full-year range dropped by 112,500 ounces, or 21.2% by our math, leaving full-year growth at about 10.1% over 2025. By our math, after producing 284,640 ounces in the first nine months, the new plan leaves 115,360 to 150,360 ounces for the fourth quarter (132,860 ounces at the middle, up 13.6% from a year ago). The cut comes from Kurmuk starting after the third quarter.
Cut. The miner lowered Kurmuk's partial first-year plan by 95,000 ounces at the middle of the range because ore only entered the plant after September 30. All 25,000 to 35,000 ounces fall into the fourth quarter as the plant ramps up toward commercial production.
Cut. The target for Sadiola, Bonikro and Agbaou moved down by 17,500 ounces at the middle of the range. By our math, that leaves 90,360 to 115,360 ounces for the fourth quarter (102,860 ounces at the middle, up from 91,195 ounces in the third quarter on higher-grade ore at Sadiola, but down 12.1% from a year ago).
New. Allied Gold issued its first total production plan for 2027, calling for 53.9% growth at the middle of the range over the revised 2026 plan. Existing mines are set to repeat 375,000 to 400,000 ounces while Kurmuk adds a full year of output.
Unchanged. The full-year 2027 plan for Kurmuk stays at 255,000 ounces at the middle of the range, followed by about 300,000 ounces in 2028. With the first quarter guided at 55,000 to 65,000 ounces, the plan leaves an average of 65,000 ounces per quarter across the rest of 2027 by our math.
New. The company plans for Kurmuk to average about 20,000 ounces per month in the first quarter of 2027, doubling the fourth-quarter midpoint of 30,000 ounces as the plant reaches full capacity.
❓ Key Questions
Which conditions failed in the C$44 Zijin buyout?
The report states only that conditions were unlikely to be met by the outside date. Investors still do not know which regulatory or closing condition blocked the C$44 per share sale before Allied Gold accepted a C$32.55 share placement instead.
What is the exact cost and timeline for Kurmuk's leaching upgrades?
Allied Gold expanded Kurmuk's plant capacity to 6.4 million tonnes a year and noted that future modifications to the leaching circuit will be deployed to sustain throughput and fresh ore recoveries, but gave no capital budget or schedule.
How much did Mali royalties versus fuel add to Sadiola's AISC?
Sadiola's all-in sustaining cost reached $2,876 per ounce as recovery fell to 79.8% and geopolitical events raised fuel and transport bills. Management did not break out how many dollars per ounce came from gold-linked royalties versus operating inflation.
At what price are the 4,035 monthly prepaid gold ounces valued?
Starting in October 2026, the miner will deliver 4,035 ounces of gold per month for a year to settle its $125 million prepaid arrangement, which will affect realized revenue per ounce after the $3,125 collars expire in December.