1911 Gold Corporation (TSXV: AUMB; OTCQX: AUMBF)
1911 Gold is Manitoba’s Gold Standard - Ready, Permitted and High-Grade 1911 Gold is an Emerging Gold Producer, with Significant Cash Flow Generation and District-Scale Growth Potential
Zijin Mining’s planned $4 billion acquisition of Allied Gold has collapsed after Chinese regulatory approval failed to materialize, forcing the state-backed miner to settle for a minority holding in the Canadian gold producer.
Zijin Gold International, a Zijin Mining subsidiary, and Allied Gold (TSX, NYSE: AAUC) said on July 29 they had mutually terminated the takeover agreement after determining there was “no reasonable likelihood” the remaining closing conditions would be satisfied within a reasonable period. The deal had already been extended to that date but remained stalled in China, even as approvals were secured in Canada and other jurisdictions. Outstanding issues around security and streaming arrangements, capital investments and lending agreements also went unresolved.
The market reacted swiftly. Allied Gold shares tumbled nearly 18% in early Toronto trading to C$24.27, valuing the company at just over C$3 billion (US$2.1 billion). On the New York Stock Exchange, the stock fell 16% to US$17.68.
In January, Zijin had offered US$44 per share in cash for Toronto-headquartered Allied Gold, a bid worth roughly US$4 billion that ranked among the largest gold mining acquisition proposals this year and pushed Allied’s stock to an all-time high. Instead of a full takeover, Zijin is now building its stake through a private placement.
Under the subscription agreement, Zijin Gold International will purchase approximately 12.8 million newly issued Allied shares at C$32.55 each, for a total of about C$416.6 million (US$295 million). Upon completion, expected around August 10, Zijin will hold roughly 9.2% of Allied Gold.
Allied Gold plans to channel the proceeds into expanding its African footprint. The funds will help finish and ramp up the Kurmuk mine in Ethiopia, enlarge the Sadiola mine in Mali, lift output at operations in Côte d’Ivoire and finance exploration across the portfolio. The company currently produces about 375,000 ounces of gold annually from Mali and Côte d’Ivoire, while Kurmuk is being readied for production. Allied went public in 2023; executive chairman Peter Marrone put about US$50 million of his own money into the company. Marrone founded Yamana Gold in 2003 and later oversaw its US$4.8 billion sale to Agnico Eagle Mines and Pan American Silver in 2023.
The collapse of the takeover underscores the growing hurdles facing large cross-border mining deals involving Chinese buyers, as geopolitical tensions and regulatory scrutiny intensify. The strategic stake, however, injects fresh capital into Allied Gold as it accelerates production growth across Africa.
