Peter Marrone
CHAIRPERSON & CEO: Allied Gold
‘Would I look at a merger of equals? Absolutely. I don’t need to be in the seat’
PETER Marrone’s reputation in the mining industry rests on Yamana Gold, a company he founded in 2003 and sold 20 years later for $4.8bn. He is now hoping to build an even bigger company with Allied Gold. He points to at least one interesting similarity. In 2003 the gold price was around $300/oz and on the way up.
A similar bull market exists today which Marrone told Kitco News last year would result in a quintupling of Ebitda assuming he can grow production as per the plan and lower costs. The latter is the challenge. At around 400,000 ounces a year from mines in Mali (Sadiola) and Cote d’Ivoire (Bonikro/Agbaou), all-in sustaining costs are on the high side at $1,400/oz. These will be lowered significantly once the $450m Kurmuk mine in Ethiopia is built, a project offering 175,000oz/yr in gold in its initial stages, at an all-in sustaining cost below $900/oz. This, says Marrone, is owing to the resource’s high grade and a cheap 20-year power deal with Ethiopia. He’s bullish. But the market is marking Allied Gold down.
“I am disappointed in the share price,” said Marrone last year, adding, however, that a settlement with Mali’s military junta on its 2023 Mining Code and a $175m streaming/pre-pay financing deal for Kurmuk will overcome the market scepticism. Gold output will be 600,000oz/yr in 2026 and 800,000oz/yr in 2028. Ever the dealmaker, Marrone does say a “merger of equals” could interest him. ‘Confidentialities’ with a few companies have been signed. “I don’t have to be in the seat,” he says of his Allied Gold adventure.
LIFE OF PETER
The son of parents who emigrated to Canada, Marrone trained in corporate law, practising in Toronto before he took the leap into investment banking. He founded Yamana Gold in 2003 and barely took breath between selling Yamana to Agnico-Eagle and starting Allied Gold. “My drive was perhaps shaped by the fact that my parents moved to this country because they said they wanted a better life for their children,” Marrone said in one interview. He also doesn’t play golf and has so far rejected the “therapeutic benefits” of fishing. “I am not sure this is for me at this stage of my life”, he said in 2023.
