08:39 AM EDT, 09/03/2024 (MT Newswires) -- Allied Gold ( AAUCF ) on Tuesday said it reached a 10-year definitive protocol agreement with the government of Mali that allows the company to expand its Sadiola mine and begin developing a satellite deposit on the property in return for a one-time cash payment to settle outstanding disputes.

Allied Gold ( AAUCF ) said the renewable agreement reached under a 2023 mining code passed by the West African country, will allow the company to begin producing from the Korali-Sud satellite deposit by month's end and continue a two-phase expansion of the Sadiola mine with work on the $65-million initial phase expected to begin in the fourth quarter.

A second $400-million expansion will add a new processing plant and infrastructure is expected to be complete in 2028.

Allied said it is paying Mali an undisclosed amount of cash to settle "all outstanding disputes, allegations, audits, and assessments, including those related to tax, customs levies, maintenance and management of offshore accounts, and the development and management of the mine and satellite areas".

"The settlement of the Protocol Agreement terms marks a significant step in securing the future of, and creating certainty for, the Sadiola Gold Mine and its expansion plans. The Protocol Agreement reaffirms Allied's commitment to working collaboratively with the Malian government and other stakeholders," the company said.

Allied also said it is arranging a financing package of between $225 million and $275 million for it Kurmak project in Ethiopia, expected to cost a total $500 million in a two-phase development. The financing is made up of a gold stream and pre-pay agreement.

On Friday, the company's shares closed down $0.05 to $3.06 on the Toronto Stock Exchange.