Allied Gold (AAUC) closed the second quarter coming off the first major turn of its short life as an NYSE-listed name: for a year and a half the company had been the object of a takeover approach by Zijin Gold, one of the world's largest miners. On July 29 that deal died. The arrangement was terminated because the conditions required to complete it were unlikely to be satisfied by the outside date. The same day, a new agreement took its place - Zijin agreed to invest roughly $295 million for a 9.2% stake instead of buying the company outright, at a subscription price of C$32.55 (about $23.00 U.S.) per share. The change in structure is the quarter's defining fact, because it resets what the market is pricing: not a takeout, but a stand-alone producer entering its most consequential quarter.
The operating quarter underneath was strong and clean. Attributable net earnings swung to $37.2 million, or $0.29 per share (GAAP), from a $25.4 million loss a year ago, on revenue up 45% to $366.3 million - the payoff of record gold prices (spot averaged $4,506 an ounce in the quarter) on rising production. On an adjusted basis, earnings were $55.4 million, or $0.44 per share, and adjusted EBITDA reached $166.9 million. Production rose 7% to 97,429 ounces, in line with plan, at an all-in sustaining cost of $2,192 per ounce. The tension sits on the balance sheet: cash fell from $479.8 million at year-end to $192.2 million as Kurmuk's build-out consumed capital and the quarter paid out $129.7 million of income tax - a timing concentration that drove a $67.4 million net use of operating cash for the quarter. That is the hinge. Kurmuk is weeks from first gold, the strategic backer is now a minority investor with the incentive to see the share price work, and the whole thesis turns on whether a company the market briefly priced as acquired can prove the stand-alone value at record gold. The next two quarters supply the first hard test.