Zijin Gold will buy Canada's Allied Gold for about C$5.5 billion ($4.02 billion) in cash, the companies said on Monday, as the Chinese miner ramps up its global expansion against the backdrop of record high prices of the yellow metal.
Zijin Gold rocketed 13.7% while Zijin Mining surged by 6% following its announcement.
A surge in gold prices has boosted margins and cash flows for miners, fuelling consolidation in the industry as large producers seek to secure long-life assets and boost output through acquisitions rather than developing new mines.
The deal also comes as Canada and China move to mend ties, having reached a preliminary agreement earlier this month to cut tariffs on electric vehicles and canola, while vowing to ease trade barriers and strengthen strategic cooperation.
Zijin will pay C$44 per share, implying a premium of about 5.4% to Allied stock's last close. U.S.-listed shares of Allied were up nearly 4% in premarket trading.
Allied CEO Peter Marrone said the deal offers significant value for shareholders and showcases the depth of the company's portfolio of gold assets across Africa.
Zijin, one of the world's largest gold miners with operations across nine countries, enjoyed a strong debut in Hong Kong last year amid a sustained rally in bullion's prices and a September fundraising boom.
Under the agreement, Allied will have to pay C$220 million to Zijin, if the deal is terminated under certain conditions.
The companies expect the transaction to close by late April 2026.
($1 = 1.3676 Canadian dollars)