China’s largest miner, Zijin, has scrapped plans to acquire a Canadian gold producer Allied Gold after failing to get approval from PRC regulators, and instead bought $300 million worth of its shares.
The $4 billion acquisition’s deadline was set on July 29. After failing to secure a permission from Chinese authorities, the parties have mutually agreed not to extend it, since there was "no reasonable likelihood" that the remaining closing conditions would be satisfied within a reasonable period.
However, Zijin Gold International, a gold mining division of Zijin, has still opted for C$416.64 million ($300 million) in Allied shares by way of a non-brokered private placement.
Allied plans to use the proceeds of this strategic investment for the continued advancement of its growth initiatives, including operational optimisations; the completion and ramp-up of the Kurmuk project, in Ethiopia; the phased expansion of the Sadiola project, in Mali; production increases at the Côte d’Ivoire Complex; and exploration efforts across its portfolio.
The companies announced that the strategic investment is complete, and Zijin now holds about 9.2% of the issued and outstanding common shares of Allied.
Theodor Lisovoy, Managing Editor, Rough&Polished
