KEY POINTS
- Zijin has invested C$416.64 million in Allied Gold through a private placement for 12.8 million shares.
- Zijin now owns about 9.2% of Allied Gold after the proposed C$5.5 billion takeover collapsed in July.
- Allied Gold will use the funds to expand operations, including projects in Ethiopia, Mali and Côte d’Ivoire, as well as exploration.
Canada-based gold producer Allied Gold has completed a strategic investment from Zijin Gold International Company, giving the Chinese mining group a significant minority stake in the company.
The investment was completed through a non-brokered private placement in which Zijin purchased 12.8 million common shares in Allied Gold for gross proceeds of C$416.64 million.
Following the transaction, Zijin now owns approximately 9.2% of Allied Gold’s issued and outstanding common shares.
The deal strengthens Allied Gold’s financial position and provides additional funding for the company as it works to expand production and develop several major projects across Africa.
Funds to Support Growth Projects
Allied Gold said the money raised will be used to support a number of growth plans across its portfolio.
A major focus will be the continued development, completion and ramp-up of the Kurmuk gold project in Ethiopia. The company also plans to use part of the funds to support the phased expansion of its Sadiola project in Mali.
In addition, Allied Gold intends to increase production at its Côte d’Ivoire Complex and step up exploration activities across its wider portfolio.
The investment therefore provides Allied Gold with additional capital to improve existing operations while also advancing projects that could increase its future gold production.
The strategic investment comes shortly after a much larger proposed transaction between the two companies fell apart.
Zijin had previously proposed a C$5.5 billion deal to acquire all the shares of Allied Gold. However, that proposed takeover collapsed at the end of July.
Rather than ending their relationship completely, the companies subsequently agreed to a smaller strategic investment that would give Zijin a sizeable stake in Allied Gold without taking full control of the Canadian gold producer.
The C$416.64 million private placement represents the new arrangement between the companies following the failed takeover proposal.
