Allied Gold's C$5.5 Billion Zijin Sale Collapses

Allied Gold Corporation and China's Zijin Gold International have scrapped their planned C$5.5 billion (US$3.90 billion) takeover, the companies announced on Wednesday. The two sides mutually agreed to let the July 29 deadline expire, citing “no reasonable likelihood” the remaining conditions would be met within a reasonable period.

In place of the full acquisition, Zijin will take a 9.2% stake through a private placement valued at approximately US$295 million. U.S.-listed shares of Allied Gold tumbled nearly 15% in premarket trading.

Contents

01

The Original Deal

02

Why It Collapsed

03

The Replacement

04

Market Fallout

The Original Deal

The transaction, unveiled on January 26, 2026, was a friendly all-cash offer at C$44 per share, a premium of roughly 27% over Allied Gold's 30-day volume-weighted average TSX price as of January 23. The equity value stood at approximately C$5.5 billion.

The acquisition was structured as a Plan of Arrangement under Ontario's Business Corporations Act, requiring 66⅔% shareholder approval. Directors and officers holding about 15.4% of shares had signed voting support agreements. Closing was expected by late April 2026, subject to shareholder and court approvals, Investment Canada Act clearance, and Chinese regulatory sign-offs.

Why It Collapsed

Neither company detailed which conditions went unmet. Allied Gold pointed to “broader external factors affecting cross-border transactions of this scale” without elaborating. The original agreement carried a C$220 million termination fee payable by Allied Gold to Zijin in certain circumstances, though it remains unclear whether that clause was triggered.

The collapse arrives amid sliding gold prices and heightened scrutiny of large cross-border mining deals. Zijin Gold, listed in Hong Kong with a market capitalisation of roughly US$70 billion as of late January, operates across Asia, Africa, Australia, and South America. Allied Gold runs three producing assets and development projects in Côte d'Ivoire, Mali, and Ethiopia.

The Replacement

Zijin will subscribe for approximately 12.8 million newly issued Allied Gold shares at C$32.55 each, a steep discount to the original C$44 offer. The private placement is expected to close on or about August 10, 2026.

Allied Gold plans to direct the US$295 million in proceeds toward completing the Kurmuk mine in Ethiopia, expanding the Sadiola mine in Mali, increasing Ivory Coast production, and funding exploration across its portfolio.

Market Fallout

The premarket sell-off reflected investor disappointment that the C$44-per-share buyout had evaporated. The private placement at C$32.55, while injecting fresh capital, offers no immediate liquidity to existing shareholders.

Peter Marrone, Chairman and CEO of Allied Gold, had framed the original deal in January as benefiting all stakeholders. The company must now convince investors that its standalone strategy, supported by Zijin's minority investment, can deliver the value the full takeover no longer will.