Canada-headquartered Allied Gold has scrapped a planned private placement with UAE-based Ambrosia Investment Holding, citing unmet conditions and improved market dynamics that it says now support a higher valuation.

The Toronto-based miner announced on Monday that it would not proceed with the previously disclosed equity deal, which would have seen Ambrosia invest at C$3.40 a share. With the price protection from the TSX set to lapse, Allied opted not to seek an extension. The decision follows a sharp increase in both the price of gold and Allied’s share price since the deal was first floated.

The company cited “the time and effort involved, the significant increase in gold price and its share price in the interim period, the evolution and impacts in trading liquidity and eligibility for index inclusion, as well as meaningful improvements in its business plan and outlook” as key factors behind its decision. It added that these developments are “expected to support a higher share price than contemplated in the private placement".

The now-cancelled private placement was originally unveiled on February 25 as part of a broader strategic partnership with Ambrosia, under which the firm is to acquire 50% of Allied's interest in its Mali holdings, including its 80% stake in Société d'Exploitation des Mines d'Or de Sadiola.

Despite pulling out of the funding deal, Allied said Ambrosia remains engaged, with both parties continuing advanced discussions relating to a joint venture (JV) and long-term power supply arrangement for the Sadiola mine in Mali, substantively on terms as previously disclosed and independent of the private placement.

The company is moving ahead with the phased expansion of its Sadiola operation. The first stage remains on schedule and on budget for completion later this year, with a second phase planned thereafter. Allied has been working to ramp up production from 170 000 oz in 2023 to between 200 000 oz/y and 230 000 oz/y in the medium term. A subsequent expansion phase, expected by late 2028, aims to push production to 400 000 oz/y in the first four years.

Meanwhile, Allied said it had been cleared by the NYSE to file a formal listing application. The company expects to trade under the ticker "AAUC" by early in the third quarter, subject to final approval.

“Allied believes that listing on the NYSE will provide the company with, among other things, access to a broader investor audience, increased sources of potential capital, improved trading liquidity in Allied's common shares, and increased research coverage from US investment banks. Finally, the listing is expected to provide the opportunity for broader index inclusion,” it stated. 

Although the equity component has been dropped, Allied and Ambrosia still plan to execute the JV and power supply elements of the deal. ATGC, an Emirati energy firm, is expected to deliver a renewable power solution to Sadiola by July 2026 under the original plan, lowering operating costs and reducing the mine’s carbon footprint.