The Toronto-based mining multinational Allied Gold Corporation has received board approval for a two-phase advancement of its expanded Kurmuk Project, slated to become the largest gold mining project in the country.

Based in Benishangul Gumuz Regional State, 763Km from Addis Abeba, the project requires over 500 million dollars in development capital. The company has committed 185 million dollars to be spent over the next year and a half for the project's first phase development plan during its inaugural board meeting in September.

The mineral producer has ongoing projects across African countries such as Mali, Egypt and Côte d'Ivoire at different stages. Its total operation costs over the 12-year life cycle of the mine are estimated to reach around 1.8 billion dollars, according to the annual report presented to the Toronto Stock Exchange (TSX).

Allied's listing on the Toronto Stock Exchange four weeks ago resulted in it raising 267 million dollars in Canada's largest mining initial public offering since 2010; with a market capitalisation of 970 million dollars on the first day.

The Kurmuk Project entails a 4.4tn a-year processing plant that will produce close to 2.4 million ounces over a 12-year mine life based on a definitive feasibility study completed in 2022 on the Dish Mountain and Ashashire deposits in Benishangul Gumuz.

Its top brass, including CEO Peter Marone, are mostly former Yamana Gold shareholders, which was sold for 4.8 billion dollars to Pan American Silver last year.

They expect to start early works by the end of the year and target to reach commercial production in a couple of years despite setbacks due to the presence of artisanal miners, which had posed a security threat to exploration efforts.

Allied acquired the exploration license for Dish Mountain from ASCOM Mining Ethiopia Plc in 2017, while the Ashashire licence followed a year later from Aurigin Resources Inc.

A large-scale mining license was granted to the Kurmuk in 2021 for the 100sqkm site located five kilometres from the Sudan border. It was accompanied by a two-decade-long development agreement that entails a 25pc corporate tax and five per cent royalty fees with the Ethiopian government.

Allied, which holds three other exploration licenses around the mining site, completed the accretive acquisition of the minority interest previously held by APM Investment Holdings Ltd (APM) in September, consolidating 93pc ownership with the remaining held by the state.

The acquisition included the issuance of over 11 million common shares at a price of 4.45 dollars for an aggregate value of 52 million dollars.

Ethiopia's largely untapped gold resources have attracted the attention of several international investors over the years, who have filed for exploration and mining licenses with mixed success.

The country only has one active large-scale gold producer for the past quarter of a century, run by MIDROC Goldmine Plc, in Lega Dembi, Oromia Regional State. The site has been a source of public outrage due to its environmental damage.

With hopes of incentivising targeted investors, a wave of reforms was put forth by the National Bank of Ethiopia (NBE) last month, which effectively removed foreign exchange controls for large mining projects.