Barrick Gold, the world's largest gold producer, has ended its talks with China government-owned China National Gold Group over the sale of a controlling stake in its African business, African Barrick Gold.

Listed on London Stock Exchange, African Barrick Gold (ABG) is Tanzania's largest gold miner. Following the news, ABG shares plummeted more than 20 percent to 352.10 pence at the close of trading on Tuesday.

The firms failed to agree on the value of a 73.9 percent stake in ABG, ending a deal that would have been the largest gold firm takeover involving a Chinese company. The deal was valued at about $3bn (£1.9bn, €2.3bn).

"These discussions were part of our ongoing efforts to identify opportunities to optimise our portfolio, however we are approaching this in a prudent and disciplined manner and will only proceed with opportunities that generate acceptable value for Barrick," Barrick Gold president and CEO Jamie Sokalsky said in a statement.

In an update on the collapse of the deal, ABG said it would review its business operations in order to meet its production targets and tackle rising costs. The company has recently suffered a number of problems including mine invasions and fuel thefts.

The company believes that "the Operational Review will create the opportunity to further improve the return profile of the business."

ABG downgraded its 2012 production forecast earlier in October and analysts opined that the downgrade would have blocked the deal.

Nevertheless, it is planning to maintain the total dividend for 2012 at the 2011 level of $67m.

"The Board is confident in the ability of the management team to deliver significant value from our high quality asset base to the benefit of all stakeholders," said Derek Pannell, acting chairman of ABG.

"While our operational and financial performance in 2012 has been lower than the previous year, we are positive on the future potential of the business, we have built up a strong balance sheet and we recognise the ongoing support of our shareholder base."