Zijin Gold Intl scraps $5.5B Allied Gold takeover, takes 9.2% stake instead

Zijin Gold International walked away from its $5.5 billion acquisition of Allied Gold Corp. and instead invested C$417 million for a 9.2% minority stake, a deal restructuring that reflects the growing complexity of cross-border mining transactions.

Zijin Gold International terminated its $5.5 billion acquisition of Allied Gold Corp. on Wednesday, replacing the full takeover with a C$417 million ($295 million) strategic investment that gives the Chinese miner a 9.2% stake.

"The parties concluded there is no reasonable likelihood that the conditions for completion would be satisfied by the July 29, 2026 deadline or within a reasonable period thereafter," the companies said in a joint statement, citing broader external factors affecting large-scale cross-border transactions.

Zijin will purchase 12.8 million newly issued Allied Gold shares at C$32.55 apiece, matching the Toronto-listed miner's 30-day volume-weighted average price as of July 27. The subscription price represents a premium to Allied Gold's market price when the original deal was announced. The investment is subject to approval from the Toronto Stock Exchange and New York Stock Exchange, with closing expected around Aug. 10.

The shift from full ownership to a minority position reduces Zijin's integration risk and capital outlay while preserving exposure to Allied Gold's development pipeline, which includes the Kurmuk mine in Ethiopia — expected to begin operating in August with first gold production weeks later — and the phased expansion of the Sadiola project in Mali. Allied Gold plans to use the proceeds for operational improvements, production increases at its Côte d'Ivoire complex and exploration activity.

Deal Structure Shifts as Cross-Border Hurdles Mount

The termination marks one of the largest failed mining takeovers of the year and underscores the regulatory and geopolitical friction facing Chinese acquirers in Western markets. The original all-cash offer, announced earlier this year at a significant premium, would have given Zijin control of Allied Gold's four operating mines and two development projects across Africa.

Under the new arrangement, Zijin receives participation and top-up rights allowing it to maintain its proportionate ownership through future share issuances. The shares are subject to a four-month-and-one-day holding period under Canadian securities law. Stifel Nicolaus Canada advised Allied Gold on the strategic investment.

What the Investment Funds

Allied Gold said it will deploy the C$417 million in proceeds toward completing and ramping up Kurmuk, its flagship development project, as well as the phased expansion of Sadiola. The company also plans to increase production at its Côte d'Ivoire complex and fund exploration across its portfolio. Kurmuk is expected to deliver its first gold within weeks of an August operational start.

For Zijin, the 9.2% stake provides a foothold in Allied Gold's African assets without the full balance-sheet commitment of a $5.5 billion acquisition. The Chinese miner, which also trades in Hong Kong as Zijin Mining (02899.HK), has been expanding its overseas gold portfolio amid a gold price rally that has pushed bullion to record levels this year.

This article is for informational purposes only and does not constitute investment advice.