A proposal to create Canada's fourth largest gold miner has unraveled, with shareholders of Iamgold rejecting a controversial C$2.3 billion merger with Wheaton River Minerals.

Iamgold shareholders voted 58 percent against the plan July 6, reviving what had already been a tangled ownership battle involving two U.S.-based companies.

Denver-based Golden Star had previously launched a C$1.1 billion...