Allied Gold Pours First Gold at Ethiopia’s Kurmuk Mine After Failed $3.9 Billion Zijin Takeover

Canadian-based gold producer Allied Gold has poured its first gold at the Kurmuk mine in Ethiopia, marking the start of production at a project expected to significantly increase the company’s output over the next two years.

The milestone brings the mine closer to commercial operations before the end of 2026. Allied is targeting full production capacity by early 2027, with gold recovery rates expected to improve as operations progress.

Kurmuk is expected to produce between 25,000 and 35,000 ounces of gold in 2026. Output is projected to rise to 55,000–65,000 ounces in the first quarter of 2027, before reaching an estimated 240,000–270,000 ounces for the full year.

By 2028, annual production is expected to reach approximately 300,000 ounces. Allied is targeting a similar average during the mine’s first four years of operation, although production is forecast to average 240,000 ounces annually over its full lifespan.

Kurmuk marks major milestone for Ethiopia’s mining industry

Allied Gold’s management and board commended the project, operations and in-country teams for bringing Kurmuk from a greenfield development to its first gold pour.

The company also acknowledged the cooperation between its Ethiopian and international teams, as well as support from the Ethiopian government.

Kurmuk is among the first large-scale mechanised mines in Ethiopia and is expected to support the country’s ambition to develop a modern, large-scale mining industry.

Zijin Gold abandons $3.9 billion Allied Gold acquisition

The start of production comes after China’s Zijin Gold abandoned its proposed acquisition of Allied Gold, which was valued at C$5.5 billion, or approximately US$3.9 billion at the time of the announcement.

The transaction was terminated after both companies concluded that the remaining conditions required to complete the deal could not be satisfied within a reasonable timeframe.

Had the acquisition proceeded, Zijin would have gained control of Allied Gold’s African mining portfolio, including operating mines and development projects in Mali, Côte d’Ivoire and Ethiopia.

The failed takeover would have expanded the Chinese group’s presence in Africa’s gold sector and given it access to Allied’s growing production pipeline.

Zijin retains a stake in Allied Gold

Despite the termination of the acquisition, Zijin did not completely withdraw from its relationship with Allied Gold.

Under a separate agreement, the Chinese miner agreed to invest approximately US$295 million in Allied through a private placement. The investment is expected to give Zijin a 9.2% stake in the Canadian company.

The arrangement allows Zijin to maintain an equity position in Allied and retain exposure to its African gold portfolio without completing the full takeover.

With Kurmuk now producing gold, Allied is moving ahead with its plans to expand output, while Zijin remains a minority shareholder in the company.