Zijin Acquires Canada’s Allied Gold in $4B Cash Deal
Zijin Gold has announced its plan to acquire Canada’s Allied Gold in a significant all-cash deal valued at approximately C$5.5 billion. This acquisition represents a major move in Zijin Gold’s strategy to extend its global footprint in the mining sector, particularly in the context of rising gold prices and growing consolidation within the industry.
Zijin’s Acquisition Details
The Chinese mining giant will pay C$44 per share for Allied Gold, which reflects a 5.4% premium over Allied’s recent closing price and a 27% increase compared to its 30-day average closing price as of January 23. Following this news, Allied’s shares saw a rise of nearly 4% in premarket trading.
Transaction Conditions
- The agreement includes a C$220 million termination fee payable by Allied under specified conditions.
- The acquisition is subject to shareholder approval and must comply with the Investment Canada Act.
Strategic Significance
According to Allied’s chairman and CEO, Peter Marrone, the decision to sell followed a strategic review initiated in 2024. This review analyzed various opportunities for joint ventures and mergers and highlighted the value of the company’s portfolio in Africa.
The acquisition will enhance Zijin Gold’s portfolio by incorporating three producing mines, with an expected output of up to 400,000 ounces of gold for the previous year. Notably, the Sadiola mine in Mali is anticipated to contribute approximately half of this production. Allied’s holdings additionally include operations in the Ivory Coast and the Kurmuk project in Ethiopia.
Future Prospects
Zijin Gold, which operates in nine countries, was spun off from Zijin Mining Group in September 2023 to accelerate its overseas expansion. The company made a successful debut on the Hong Kong stock exchange, riding on a wave of rising gold prices.
With several existing projects in Africa, including copper and lithium ventures in the Democratic Republic of Congo and a gold mine in Ghana, Zijin is strategically positioned to benefit from a stronger portfolio. The rise in gold prices has resulted in improved margins and cash flow for mining companies, prompting major players to opt for acquisitions to secure long-lasting assets rather than invest in new mine developments.
Geopolitical Context
The acquisition also comes amid easing trade tensions between Canada and China. Recent agreements have focused on reducing tariffs on electric vehicles and canola, paving the way for enhanced cooperation in various sectors.
The finalization of this transaction is anticipated by late April 2025, marking a pivotal moment for both Zijin Gold and Allied Gold in the global mining landscape.
