Barrick owns 73.9% of ABG, but identified it as an asset that did not meet its investment framework after new boss Jamie Sokalsky took over in June.
It entered discussions with CNG in August.
"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," Sokalsky said overnight.
"African Barrick Gold's assets hold significant potential and we will continue to look for ways to best realise that value for our shareholders."
ABG said the extended period of uncertainty over a potential sale had ended and it would conduct an operational review on its Tanzanian mines to improve performance.
It comes after a weak operational and financial performance in 2012.
"Whilst the discussions between CNG and Barrick have not led to a transaction, the process has re-emphasised the fundamental long-term value of ABG's portfolio and the scarcity of large-scale producing opportunities to enter the gold market in Africa," ABG chief executive Greg Hawkins said.
"We have demonstrated the ability of this business to generate significant cash flows and believe that the operational review will create the opportunity to further improve the return profile of the business."
Shares in ABG slumped nearly 21% overnight to 320 pence in London and Numis Securities kept the stock on hold with a 450p price target.
"The statement states Barrick ‘will only proceed with opportunities that generate acceptable value', implying the price wasn't right," analyst Cailey Barker wrote in a morning note.
"The company will continue to look for ways to realise value from the block, so still up for a potential sale.
"However, the news will come as a disappointment to some, who saw it as a potential exit from this underperforming stock, with a price mooted around the 520p mark."
ABG was spun-off from Barrick in 2010, with Barrick receiving over $US800 million for the sale of 26.1% of the company as part of its London initial public offering.