Allied Gold’s $5.5 billion sale to Chinese gold miner falls apart amid slide in gold prices

Since the original deal was announced on Jan. 26, the price of gold has dropped by more than 20 per cent from US$5,090 per ounce to about US$4,030 per ounce as of July 29. Photo by GEORG HOCHMUTH/APA/AFP via Getty Images files

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Toronto-based Allied Gold Corp. said Wednesday that it has terminated its $5.5 billion agreement to be acquired by China’s Zijin Gold Co. Intl. Ltd.

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No immediate reason was given, but Allied said “both companies have concluded that there is no reasonable likelihood that the conditions relating to completion of the Transaction will be fulfilled.”

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Separately, Allied said it had struck an agreement for Zijin to make a $417 million strategic investment, in which it will purchase 12.8 million shares, or 9.2 per cent of the company, at $32.55, the 30-day volume weighted average trading price of Allied.

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The new investment represents a step back from previous terms, announced in January, in which Zijin planned to pay $44 per share, which at the time represented a 27 per cent premium to the 30-day volume weighted average trading price.

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Allied did not immediately respond to requests for comment.

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Allied is an African-focused gold producer, with mines in Cote D’Ivoire and Mali, that produced 380,000 ounces of bullion in 2025. It is also developing a mine in Ethiopia.

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Zijin Gold, China’s largest gold producer, is listed on the Hong Kong stock exchange and is a subsidiary of Zijin Mining Group Co. Ltd., one of the world’s top copper producers, which has a footprint in more than 15 countries.

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Since the original deal was announced on Jan. 26, the price of gold has dropped by more than 20 per cent from US$5,090 per ounce to about US$4,030 per ounce as of July 29, driven in part by concerns that interest rates will rise and the U.S. dollar will strengthen, both of which have eased gold’s appeal as a safe haven investment asset.

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Allied Gold’s share price has mirrored the broader decline in the price of gold. Initially, it hit a plateau after the deal with Zijin was announced and traded above $40 per share for months. But by April, it started to slid, and on Wednesday, after the deal termination was announced, it plunged 16.4 per cent to $24.65.

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In March, Allied chairman and chief executive Peter J. Marrone said on a conference call with analysts that 99 per cent of shareholders had approved the deal and that both companies were committed to an expeditious closure. The goal was to finalize everything before the end of May, Marrone said.

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But he cautioned that the price of gold was only one of the factors injecting volatility into the situation.

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“That volatility is not just markets and it’s not only gold price, but that volatility has now expanded itself to geopolitical issues as well,” Marrone said in a March 31 earnings call.

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Although regulators in Ottawa approved the deal in May, foreign press outlets reported that some other governments including Ethiopia and China had not.

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