China is Coming for Our Gold Miners

With the world hurtling towards a monetary reset, everyone suddenly wants the gold miners. Just this morning:

China’s Zijin Gold to buy Canadian miner Allied Gold for about $4 billion

(Reuters) - Chinese miner Zijin Gold will buy Canadian miner Allied gold for 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.

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.

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.

Why the Low Premium?

At 5.4% above the recent closing price, this doesn’t exactly scream “buying frenzy”. But a quick check of Allied’s price chart provides an explanation: Its stock is up 280% in the past year, so a serious premium has been built into the price by the past few months’ trading.

More important is that this is just the beginning of a wave of M&A in the precious metals sector, much of it coming from Zijin and its peers. Expect announcements like today’s to be weekly occurrences in 2026, taking a lot of our Portfolio miners off the market. The process will be bittersweet, but very profitable. Enjoy this part of the ride.