The sulfide expansion will add another 100,000ozpa to Simberi production and has an estimated capital cost of $A246 million.
The PFS looked at processing refractory ore by roasting a concentrate.
The development of the sulfides is dependent on the removal of the oxides and the company recently approved the $32 million oxide expansion which will add a further 100,000ozpa to production from the end of next year.
The PFS showed the sulfide and oxide project combined have a pre-tax net project cash flow of $750 million and a pre-tax net present value of $334 million.
Cash costs are expected to be $678 per ounce and the study assumed a gold price of $US1000/oz.
At today's gold price of around $1400/oz, the project NPV grows to $A862 million.
The project will produce a total of 1.88 million ounces of gold over a 15-year mine life.
Allied has already moved to a bankable feasibility study, which will investigate an increased throughput option from 1.5 million tonnes per annum to 2.5Mtpa, which could see Simberi production jump to 250,000-300,000ozpa.
The company is planning further sulfide exploration to support these plans.
The BFS is due to be completed by the start of 2012, with construction to be completed by the end of 2014.
If the gold price continues to strengthen, Allied may look at accelerating plans.
The current Simberi oxide plant has a nameplate capacity of 2Mtpa to produce 70,000ozpa gold.
The Papua New Guinean mine produced 64,327oz in the 2010 financial year and 72,609oz in the 2009 financial year.
Allied's second mine, Gold Ridge in the Solomon Islands, is set for first production in March next year.
The company said group production should be 320,000ozpa from 2015.