Zijin Gold's planned takeover of Allied Gold has been terminated, but the Chinese miner will invest about $295 million in the company behind major gold assets in Mali, Ethiopia and Côte d'Ivoire.

China's Zijin Gold has abandoned its C$5.5 billion takeover of Allied Gold after the companies concluded that the remaining conditions could not be completed within a reasonable period.

The deal, worth about US$3.9 billion when announced, would have transferred control of Allied's African gold portfolio to the Chinese mining group. Allied owns producing mines and development projects in Mali, Côte d'Ivoire and Ethiopia.

Zijin is not walking away entirely. Under a separate agreement announced on Wednesday, it will invest approximately US$295 million, or C$417 million, in Allied through a private placement.

The investment will give Zijin about 9.2% of Allied's outstanding shares, preserving a Chinese foothold in one of Africa's fastest-growing gold portfolios without completing the full acquisition.

Zijin agreed to buy Allied in January for C$44 per share. The transaction valued the Canadian-listed miner at C$5.5 billion and was expected to give Zijin control of the Sadiola mine in Mali, Allied's Côte d'Ivoire operations and the Kurmuk development project in Ethiopia.

The companies later extended the transaction deadline to July 29 while working through outstanding approvals and closing conditions. In its latest statement, Allied said both parties had decided not to extend the deadline again because there was "no reasonable likelihood" that the remaining conditions would be fulfilled by the deadline or within a reasonable period afterward.

Allied attributed the termination to broader external factors affecting cross-border transactions of this size but did not identify a single regulator or African government as the cause.

The Financial Times previously reported that Chinese regulators had raised concerns about the transaction, including the valuation and political risks connected to Allied's assets in Mali. That regulatory explanation has been reported by the newspaper but was not confirmed in Allied's termination announcement.

Zijin will subscribe for approximately 12.8 million newly issued Allied shares at C$32.55 each. Allied said the subscription price was equal to the company's 30-day volume-weighted average share price as of July 27 and represented a premium to its market price when the investment was announced. The transaction is expected to close on or around August 10, subject to customary conditions and stock-exchange approval.

Allied said the money would support the completion and ramp-up of the Kurmuk project in Ethiopia, the expansion of the Sadiola mine in Mali, increased production from its Côte d'Ivoire operations and further exploration.

Kurmuk, located in Ethiopia's Benishangul-Gumuz region, is designed to produce an average of approximately 290,000 ounces of gold annually during its first five years, according to Allied. The figure is a company target rather than recorded production.

The miner currently forecasts group production of 485,000 to 575,000 ounces in 2026 and is targeting approximately 800,000 ounces by 2029. Those figures are also forward-looking estimates.

The failed acquisition means Allied will remain an independent, publicly listed company rather than becoming a wholly owned Zijin subsidiary.

However, the smaller investment still links Zijin's capital to projects across three African gold markets. It also gives Allied funding for expansion without immediately transferring control of its operations.

The outcome is particularly significant for Mali, where changes to mining rules and disputes between the government and foreign operators have increased scrutiny of international mining investment.

BI Africa reported in June that the acquisition was facing questions over its valuation and Allied's exposure to political risk in Mali. The termination confirms that the full takeover will not proceed, while the minority investment provides both companies with a narrower alternative.

Allied's US-listed shares fell nearly 15% in premarket trading after the announcement, according to Reuters, showing the gap investors saw between Zijin's original cash offer and the value of remaining independent.

The $295 million investment is therefore not a smaller version of the takeover. It leaves ownership of Allied unchanged apart from Zijin's minority holding, while giving the Chinese group exposure to the miner's African growth plans.