Allied, Zijin Pivot After US$4 Billion Buyout Falls Through

Allied Gold (TSX:AAUC,NYSE:AAUC) and Zijin Gold International (HKEX:2259,OTCPL:ZJNGF) abandoned a previously announced US$4 billion takeover agreement amid cross-border regulatory hurdles, pivoting instead to a US$295 million private placement that grants Zijin a 9.2 percent stake in the Canadian producer.

The collapse ends an arrangement that would have seen Zijin acquire all outstanding Allied shares, a transaction the companies attributed to “broader external factors applicable to cross-border transactions of this scale.”

To maintain its exposure to Allied’s African asset portfolio, Zijin will purchase approximately 12.8 million common shares at roughly US$23.5 per share.

Market observers cited Chinese regulatory friction as the primary obstacle to the outright acquisition. Research firm H&P Advisory identified approval from China’s National Development and Reform Commission as the main hurdle.

Despite the takeover collapse, analysts view the US$295 million equity injection as a balance-sheet stabilizer that supplements Allied’s June-end cash position of US$190 million.

H&P raised its valuation for Allied at a 104 percent premium. The valuation upgrade incorporates a revised mine plan at the Bonikro project that extends operations to 2036, pushing its estimated asset value from US$365 million to US$949 million.

Operationally, Allied delivered second-quarter gold production of 97,400 ounces, aligning with estimates, while generating US$427 million in net revenue and US$202 million in EBITDA.

Allied will deploy the fresh capital to accelerate growth initiatives across its portfolio. Immediate focus rests on the Kurmuk project in Ethiopia, where operations are slated to begin this August with first gold expected weeks later.

H&P projects Kurmuk will produce 130,000 ounces in 2026, eventually scaling to 240,000 ounces annually at an all-in sustaining cost of USD 1,100 per ounce.

Proceeds will also fund the phased expansion of the Sadiola mine in Mali, which accounts for US$1.5 billion of the company’s operational net asset value, and production increases at the CDI complex in Côte d’Ivoire.

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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.