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Shares of Zijin Gold International experienced a rise after its parent company’s gold subsidiary announced plans to acquire Canada’s Allied Gold, which owns multiple gold mines across Africa, for CAD 5.5 billion (approximately USD 4 billion).
As of 1:15 p.m. in Hong Kong, Zijin Gold was up 6.4%, trading at HKD 222.20 (USD 28.49). Meanwhile, Zijin Mining’s stock listed in Shanghai surged 1.4%, reaching CNY 40.05 (USD 5.75). Both stocks reached their highest intraday levels to date.
Zijin Gold intends to acquire all shares of Allied Gold at CAD 44 (USD 32) per share, representing a premium of about 27% over the 30-day volume-weighted average price on the Toronto Stock Exchange as of market close on Jan. 23. The deal also includes the purchase of Allied Gold’s convertible bonds valued at roughly CAD 300 million (USD 219.3 million). The transaction is expected to close by April.
The announcement also positively impacted Allied Gold’s shares, which closed up 4% at CAD 43.40 in Toronto and USD 31.60 in New York yesterday.
“Allied Gold has built and developed a portfolio of large-scale, long-life gold assets with promising expansion potential,” said the chairman of Zijin Gold. “This acquisition aligns with our strategy of acquiring high-quality gold assets and broadening our footprint in Africa.”
In 2023, Allied Gold produced about 10.7 tons of gold, increasing to 11.1 tons in 2024, and was projected to have produced between 11.7 and 12.4 tons last year. By the end of 2024, the company had 361 million tons of gold ore resources and 533 tons of gold reserves, with an average grade of 1.48 grams per ton.
The company owns significant stakes in several mines: an 80% stake in the Sadiola mine in Mali, 65% in the Korali-Sud mine, 90% in Bonikro and Hiré mines in Côte d’Ivoire, 85% in the Agbaou mine, and full ownership of the Kurmuk gold mine in Ethiopia. It also holds four exploration licenses in Côte d’Ivoire and Ethiopia.
The Kurmuk mine is expected to begin production in the second half of this year. The Ethiopian government is responsible for constructing the power transmission infrastructure, and after production begins, the government is entitled to a 7% stake in the mine.
The reconstruction and expansion projects at the Sadiola and Kurmuk mines are projected to increase Allied Gold’s gold production to approximately 25 tons by 2029. Meanwhile, the Korali-Sud mine is nearing the end of its operational life.
All of Allied Gold’s mines are large-scale open-pit operations either currently producing or soon to be operational, meaning they can contribute to the company’s output and profits immediately upon acquisition. The company pointed out that with its resource development and engineering expertise, there’s potential for further enhancements in the mines’ productivity and efficiency.
Once approved by Allied Gold’s shareholders, the Ontario Superior Court, and relevant government agencies, Zijin will expand its asset base to include 12 major gold mines across 12 countries. This strategic move is expected to significantly boost the company’s asset size, profitability, and influence within the global gold industry, strengthening its competitive position worldwide.
Zijin Gold, which was listed in Hong Kong last September, manages and operates Zijin Mining’s overseas gold assets. Zijin Mining owns an 85% stake in Zijin Gold.
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