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Or if that fails, use an automatic centre punch to make a decent sized dent in the head of the bolt, and then punch the dent tangentially / anti-clockwise to remove the bolt.
I removed a knackered SPD cleat bolt this way the other day, and have previously extracted the remains of a sheared bolt in a seat post using the same method.
Slow, but it gets there eventually.
JurekB
Rather than cut a slot I'd first try smacking in a Torx and see if that will grip and remove the rounded Allen bolt...