China’s Zijin Gold International has acquired approximately 9.2 percent of Canadian mining company Allied Gold Corporation, giving the company indirect exposure to major gold assets including the Kurmuk project in western Ethiopia.
Allied Gold announced that the transaction, valued at just under USD 300 million, had been completed following months of negotiations between the companies.
“With the completion of the strategic investment, Zijin Gold holds approximately 9.2 percent of the issued and outstanding common shares of the company,” Allied Gold said.
The investment gives Zijin Gold an interest in Allied Gold’s portfolio of mining assets in Ethiopia, Mali and Côte d’Ivoire.
The Kurmuk Gold Project is located in Ethiopia’s Benishangul-Gumuz Regional State, close to the country’s western border with Sudan. The project is among Ethiopia’s most significant emerging large-scale gold developments and is expected to substantially increase the country’s industrial gold production once fully operational.
Allied Gold has indicated that it expects the Kurmuk project to begin contributing to production shortly, with output projected at between 240,000 and 270,000 ounces of gold in 2027. At prevailing international gold prices, production at that level could represent close to USD 1 billion in annual gold value.
The transaction follows an earlier plan by Zijin to acquire Allied Gold in its entirety for approximately USD 4 billion. The proposed acquisition was later discontinued after the transaction did not receive the necessary regulatory approval in China.
Following the collapse of the full acquisition, the companies moved forward with the minority investment arrangement.
Allied Gold said proceeds from the transaction would be used to strengthen and expand operations across its mining portfolio. The company identified operational improvements, project development and the completion and ramp-up of the Kurmuk project among its priorities.
Zijin Gold International forms part of Zijin Mining Group, one of China’s largest global mining companies, with investments across gold, copper, lithium and other mineral resources.
The transaction comes as Ethiopia seeks to attract greater investment into its mining sector. Government officials have identified gold and other critical minerals as priority areas for investment as the country works to expand mineral production, exports and foreign currency earnings.
Source: Middle East Eye
