US$295 Million Deal Emerges After Gold Mining Takeover Collapses

Allied Gold Corp. (AAUC:TSX; AAUC:NYSE) announced that its previously announced arrangement agreement with Zijin Gold (2259:HK) International Company Ltd. had been terminated after both companies concluded there was no reasonable likelihood that the conditions required to complete the transaction would be fulfilled by the July 29, 2026, outside date or within any reasonable time thereafter.

According to the company, the parties mutually agreed not to extend the outside date further. It said the termination of the arrangement agreement was related to broader external factors applicable to cross-border transactions of this scale.

At the same time, Allied announced that Zijin Gold had agreed to make a strategic investment of approximately US$295 million through a non-brokered private placement. Under the subscription agreement entered into concurrently with the termination of the arrangement, Zijin Gold agreed to subscribe for approximately 12.8 million common shares at a subscription price of CA$32.55 per share for aggregate gross proceeds of approximately US$295 million. The company said the subscription price equaled the 30-day volume-weighted average trading price of its common shares on the Toronto Stock Exchange as of July 27, 2026, and represented a premium to the current market price of its common shares.

Upon completion of the strategic investment, Zijin Gold is expected to hold approximately 9.2% of Allied's issued and outstanding common shares.

Completion of the private placement remains subject to approval by the Toronto Stock Exchange and the New York Stock Exchange and is expected to occur on or about Aug. 10, 2026. The subscription agreement includes customary participation and top-up rights allowing Zijin Gold to maintain its pro rata interest in the company. The subscription shares will be issued under applicable Canadian and United States securities laws and will be subject to a statutory hold period of four months and one day under Canadian securities laws. Allied also said its chairman and chief executive officer, and its vice-chairman, had voluntarily agreed to enter into lock-up agreements for the same period.

The company said the net proceeds from the strategic investment are expected to be used for the continued advancement of its growth initiatives, including operational optimizations, the completion and ramp-up of Kurmuk, the phased expansion of Sadiola, production increases at the CDI complex, and exploration efforts across its portfolio.

Gold Held Above US$4,050 as Correction Stabilized

Gold traded above US$4,050 per ounce on August 3 after recovering losses from the previous session as investors monitored geopolitical developments in the Middle East and prepared for a week of U.S. economic data. According to Trading Economics on August 3, gold rose as President Donald Trump said peace talks with Iran would resume, while markets also focused on Friday's U.S. jobs report after the Federal Reserve left interest rates unchanged at its most recent meeting. Trading Economics reported spot gold at US$4,050.70 per ounce during the session.

Kitco commentator Jordan Roy-Byrne wrote on July 31 that, despite a recent pullback, "the secular bull market remains in place," citing long-term structural trends including the bond market, U.S. public finances, and central bank purchases. He also wrote that "Central Bank buying played an important role in the 2018 and 2022 bottoms in Gold," adding that continued purchases "may be helping build a floor under the market now."

According to an August 3 Reuters report, gold prices also rose as the U.S. dollar weakened and optimism surrounding a possible U.S.-Iran agreement reduced oil prices and eased inflation concerns. Reuters reported that spot gold traded at US$4,048.84 per ounce after the metal posted its first monthly gain in five months during July, rising about 1%. Reuters also noted that investors were watching upcoming U.S. employment data for additional signals on the interest rate outlook.

Newsletter Commentary Addressed Deal Termination and Valuation

On July 29, Chen Lin of the What Is Chen Buying? What Is Chen Selling? newsletter commented on the termination of the proposed transaction, writing that "AAUC deal was killed," and stated that his Chinese source had been correct regarding the outcome.

Lin wrote that "The Chinese government rejected it using the excuse of the Mali situation," adding that the decision "is due to Chinese internal politics" and that "the rivals of Zijin finally slowed down the rapid acquisition of Zijin."

He also noted that "Interestingly, Zijin is taking 10% of AAUC at a premium," referring to the strategic investment announced alongside the termination of the arrangement agreement.

Discussing his own view of the company, Lin wrote, "I think the deal could still surface in the future if the Mali situation improves as AAUC is quite cheap at the current level." He added that he was "picking up some shares at 17 level" and believed "it is quite cheap here as AAUC's new 300koz mine is ahead of schedule."

In a July 30 research note, H&P Advisory Ltd. said it viewed the termination of Allied Gold Corp.'s acquisition agreement with Zijin Gold International as a short-term negative, but described Zijin's continuing investment commitment as strategically positive. The firm wrote that the US$295 million equity investment "strengthens the balance sheet," adding to Allied's June-end cash balance of US$190 million. H&P said it believed the principal obstacle to the acquisition had been obtaining approval from China's National Development and Reform Commission.

H&P reported that Allied's second-quarter gold production of 97.4 koz was in line with its 97 koz estimate. The firm said annual guidance for existing operations remained at 385 koz to 425 koz, compared with its estimate of 392.5 koz. For the second quarter, H&P forecast net revenue of US$427 million, EBITDA of US$202 million, net profit after tax of US$129 million, and all-in sustaining costs of US$2,184 per ounce.

The analysts also focused on the Kurmuk project in Ethiopia, writing that its ramp-up was progressing. H&P estimated 2026 production of 130 koz, within company guidance of 100 koz to 150 koz. It said Kurmuk had reserves of 2.7 million ounces and could produce up to 240 koz annually at an all-in sustaining cost of US$1,100 per ounce once fully operational. H&P valued Kurmuk at US$2.5 billion and described its commissioning as "the key inflection point for Allied from a cashflow and technical risk perspective."

H&P also incorporated the updated Bonikro mine plan into its valuation. The firm said the revised plan extended the mine life to 2036, with throughput of 3.0 million to 3.2 million tonnes and production of 120 koz per year. H&P increased its valuation for Bonikro from US$365 million to US$949 million.

At Sadiola, H&P noted continued incremental improvements, including a planned pre-leach thickener that it said should allow more than 90% of fresh ore to be processed with lower reagent consumption from early 2027. The firm said Sadiola accounted for 30%, or US$1.5 billion, of its operational net asset value.

H&P raised its valuation for Allied to CA$48.91 per share from CA$44.00 per share, which it said was 104% above the July 29 share price of CA$24.00. The firm said the updated valuation reflected the extended Bonikro mine plan, revised Kurmuk guidance, a higher assumed discount rate for Sadiola, and the equity financing announced alongside the terminated acquisition agreement.

Operational Activities Scheduled for August and Beyond

Allied said completion of the strategic investment is expected to occur on or about Aug. 10, 2026, subject to approvals from the Toronto Stock Exchange and the New York Stock Exchange.

The company also stated that development of the Kurmuk mine had advanced, with the start of operations expected in August and the first gold following a few weeks thereafter. In addition, it said ongoing optimization and growth initiatives at Sadiola, the previously announced extension of Bonikro's mine life, and continued growth in mineral reserves and mineral resources at the Cote d'Ivoire complex continued to support the operational performance, scale, quality, and longevity of its asset portfolio.

Streetwise Ownership Overview*

Allied Gold Corp. (AAUC:TSX;AAUC:NYSE)

Restructures

Date	Old Symbol	Old Shares	New Symbol	New Shares
05/22/25	AAUC:TSX	3	AAUC:TSX	1
10/17/01	CAXMF:OTC	1	AAUC:OTC	1

^*Share Structure as of 8/4/2026

Source: Refinitiv

The March 2026 investor presentation also identified continued work on the phased expansion at Sadiola, continued exploration at the CDI complex to replace depletion and improve mineral resource models, and exploration across the company's portfolio as part of its operational activities.

Ownership and Share Structure¹

69.06% of Allied Gold Corp is owned by Institutions. Management and Insiders have 16.10%. The rest is retail. 

As of August 3, Allied's market capitalization was approximately CA$3.0 billion to CA$3.1 billion. Its 52-week trading range was CA$15.69–CA$43.77 per share.

FAQ

Why did Allied Gold and Zijin Gold terminate their takeover agreement?
Allied Gold said the arrangement agreement was terminated after both companies concluded there was no reasonable likelihood that the required closing conditions would be fulfilled by the July 29, 2026, outside date or within a reasonable period afterward. The company said the termination was related to broader external factors affecting cross-border transactions of this scale.

What is the new strategic investment between Allied Gold and Zijin Gold?
Instead of completing the acquisition, Zijin Gold agreed to make an approximately US$295 million strategic investment in Allied Gold through a non-brokered private placement. The investment includes the purchase of approximately 12.8 million common shares at CA$32.55 per share.

How much of Allied Gold will Zijin Gold own after the investment?
Upon completion of the private placement, Zijin Gold is expected to own approximately 9.2% of Allied Gold's issued and outstanding common shares.

What will Allied Gold use the US$295 million investment for?
According to the company, the net proceeds are expected to fund operational optimizations, the completion and ramp-up of the Kurmuk mine, the phased expansion of Sadiola, production increases at the CDI complex, and exploration across its portfolio.

When is Allied Gold's strategic investment expected to close?
The company said the private placement is expected to close on or about August 10, 2026, subject to approval by the Toronto Stock Exchange and the New York Stock Exchange.

What is the Kurmuk gold project, and why is it important to Allied Gold?
The company said Kurmuk is expected to begin operations in August, with the first gold anticipated a few weeks later. Allied also identified the completion and ramp-up of Kurmuk as one of the primary uses of the strategic investment proceeds.

What other gold mining projects is Allied Gold advancing?
Allied Gold said it intends to use the investment proceeds for the phased expansion of Sadiola, production increases at the CDI complex, operational optimization initiatives, and exploration activities across its portfolio.

How did the termination of the takeover affect Allied Gold's relationship with Zijin Gold?
Although the acquisition agreement ended, the companies entered into a strategic investment agreement under which Zijin Gold agreed to become a significant shareholder through the private placement.

What did market commentator Chen Lin say about Allied Gold after the deal ended?
Chen Lin wrote that he believed Allied Gold remained "quite cheap at the current level" and said he was purchasing shares. He also noted that Zijin Gold's decision to acquire a roughly 10% stake at a premium was noteworthy.

What is Allied Gold's primary business?
Allied Gold is a gold mining company focused on operating mines, advancing development projects, increasing production, expanding mineral resources and reserves, and conducting exploration across its portfolio.

What are investors watching next for Allied Gold?
Based on the company's announcement, investors are watching the expected closing of the strategic investment, the start of operations at the Kurmuk mine, the first gold from Kurmuk, the phased expansion at Sadiola, production increases at the CDI complex, and ongoing exploration activities.

How are gold prices influencing the gold mining sector?
Gold traded above US$4,050 per ounce on August 3 as investors monitored geopolitical developments, the U.S. dollar, Federal Reserve policy expectations, and upcoming U.S. labor market data, according to Trading Economics and Reuters. These factors continued to shape conditions across the gold mining industry.

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