In short: The flagged arb (a subscriber question) — a wide ~34% spread on Zijin Mining's all-cash bid (C$44 / US$32, struck when gold peaked in Q1) with the stock at ~$23 US / $33 CAD. Wide for four reasons: outstanding Chinese outbound approvals (MOFCOM/SAFE/NDRC) after the July 29 outside date; extreme West-Africa exposure (Mali junta, Ivory Coast, Ethiopia — vs Alamos's tier-one jurisdictions); a Q1 $58M loss + high AISC + Kurmuk capex; and a 20% gold selloff raising re-strike fear. But the stock is back to its pre-deal price → "the risk-reward is quite decent" for patient capital.
A Chinese miner, Zijin, agreed to buy Allied Gold for cash — about US$32 a share — back when gold was at its peak. But the stock trades near $23, a huge ~34% gap. That gap ("merger arbitrage spread") is your potential profit if the deal closes, and it's this wide because the market is nervous: China's government still has to sign off (and keeps pushing the deadline), and Allied's mines are in risky places — Mali (run by a military junta), Ivory Coast, and Ethiopia — where local governments could hold up the sale to squeeze out more money.
Singh's point: those fears are real, but the stock has already fallen all the way back to where it traded before the deal was even announced — so you're being paid a lot to take a bet that a cash-rich Chinese buyer, desperate for gold assets, eventually closes. He calls the risk-reward "quite decent."
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