Zijin agrees to buy Canada’s Allied Gold for $4B in cash

Zijin Gold agreed Monday to buy Canada’s Allied Gold (TSX, NYSE: AAUC) in a friendly all-cash transaction valued at about $5.5 billion (US$4 billion) as ‌the Chinese miner ramps up its global expansion and bullion prices fuel global mining consolidation.

China’s largest gold miner will pay $44 per share, a 5.4% premium to Allied’s last close and about 27% above its 30-day average price as of Jan. 23, Allied said Monday in a statement. Allied shares rose 3.8% to $43.35 in trading Monday morning in Toronto, below the price offered by Zijin.

The deal is expected to close in late April, subject to customary closing conditions and approvals. They include approval by two-thirds of Allied Gold shareholders and the federal government under the Investment Canada Act. The agreement includes a $220 million termination fee payable by Allied under certain conditions.

The sale follows a strategic review launched in 2024 that examined alternative combinations and joint ventures, Allied CEO Peter Marrone said in the statement. It reflects the value of the company’s African portfolio, he added.

Low premium?

The acquisition will add three producing mines to Zijin’s portfolio that were expected to generate up to 400,000 oz. of gold last year, with the Sadiola mine in Mali accounting for roughly half of that output. Allied’s assets also include operations in Côte d’Ivoire and the Kurmuk project in Ethiopia, which is scheduled to start producing this year.

Given the recent surge in gold prices, the premium offered by Zijin “could be seen as too low by investors for a company that is poised to re-rate as it delivers on Kurmuk in 2026,” Mohamed Sidibé, a mining analyst at National Bank Financial in Toronto, said in a note Monday. “The all-cash component limits future potential upside that could be generated from the asset base but also solidifies the value near current all time highs and removes uncertainty that may arise from hiccups in ramp-ups or further issues in Mali.”

Together the all-cash nature of Zijin’s offer, the risk of operating in Mali represents “a deterrent to many potential peers in the jurisdiction such as Endeavour Mining (LSE, TSX: EDV) or Fortuna Mining (TSX: FVI; NYSE: FSM),” Sidibé added. If a new bidder fails to emerge, “it would likely be up to shareholders to get Zijin to up its bid.”

Expansion play

Zijin Gold, which operates in nine countries, spun off from Zijin Mining Group last September to accelerate overseas growth and made a strong Hong Kong debut amid a sustained rally in gold prices. Parent company Zijin Mining already has several projects in Africa, including copper and lithium assets in the Democratic Republic of Congo and a gold mine in Ghana.

Higher gold prices have lifted miner margins and cash flow, pushing large producers to favour acquisitions over new mine development to secure long-life assets.

The deal also lands as Canada and China move to ease trade tensions following a preliminary agreement this month to cut tariffs on electric vehicles and canola, while vowing to ease trade barriers and strengthen strategic cooperation.