Chinese mining giant Zijin Mining has failed to complete its planned $4 billion acquisition of Canadian gold producer Allied Gold after the transaction was unable to secure approval from Chinese regulators. The takeover, announced in January, collapsed just before the closing deadline. Instead of acquiring full ownership, Zijin will become a strategic shareholder with a 9.2% stake and invest nearly $300 million in Allied’s African growth projects.
The companies announced that they had mutually agreed not to extend the July 29 deadline because the remaining closing conditions were unlikely to be satisfied within a reasonable timeframe. While the transaction received regulatory approval in Canada and other overseas jurisdictions, it stalled in China. Outstanding issues also remained regarding security arrangements, precious metal offtake, capital expenditure commitments, and financing agreements.
Shares of Allied Gold fell nearly 18% on the Toronto Stock Exchange to C$24.27, reducing the company’s market capitalization to just over C$3 billion. The stock also declined 16% in New York trading.
Rather than proceeding with a full acquisition, Zijin agreed to purchase approximately 12.8 million newly issued Allied Gold shares through a private placement at C$32.55 per share. The C$295 million financing is expected to close around August 10, after which the Chinese miner will own approximately 9.2% of the company.
The failed takeover highlights how geopolitical tensions and increasingly stringent regulatory scrutiny are complicating large cross-border mining transactions involving Chinese buyers. For Allied Gold, however, securing Zijin as a strategic investor provides fresh capital at a critical stage of its growth.
The Canadian miner operates gold mines in Mali and Côte d’Ivoire, producing approximately 375,000 ounces of gold annually. The proceeds from the private placement will fund the completion and ramp-up of the Kurmuk gold project in Ethiopia, the expansion of the Sadiola open-pit mine in Mali, production growth in Côte d’Ivoire, and exploration activities across the company’s project portfolio.
Allied Gold was listed on the stock market in 2023. The company is led by Peter Marrone, founder of Yamana Gold, who built the company from the ground up in 2003 before selling it two decades later to Agnico Eagle and Pan American Silver for $4.8 billion.
Although the takeover has fallen through, the partnership between the two companies will continue in a different form. Zijin gains exposure to a growing portfolio of African gold assets, while Allied Gold secures funding to advance mine construction, expansion, and exploration. The outcome also serves as another reminder of the growing influence of geopolitics on global mining investment.
Source: MINING.COM
Image: Allied Gold
