OTTAWA — Shares in TMAC Resources Inc. fell Tuesday morning after it announced Ottawa has blocked its $230-million sale to China’s Shandong Gold Mining Co. Ltd.
Ottawa made the decision following a review under the Investment Canada Act, the Canadian miner said in a news release, adding it is now in talks with Shandong regarding termination of the transaction.
“While we are disappointed with the outcome, we are very pleased that TMAC achieved significant operation improvements at Hope Bay,” said CEO Jason Neal in a news release, referring to TMAC’s gold mining project in Nunavut.
“We will continue to build on these improvements while considering options to manage our balance sheet. We continue to believe that the Hope Bay gold belt holds substantial value with long life production potential that presents a significant development opportunity.”
TMAC shares were down 15 cents at $1.15 in late-morning trading after falling as low as $1.05 earlier in the day.
Shandong announced the deal in May to buy TMAC for $1.75 per share in cash.
The friendly deal had received Chinese regulatory approvals and TMAC shareholders voted 97 per cent of their shares in favour of it in June.
However, the federal cabinet ordered a national security review of the proposed sale in October.
Neal said the company had cash of $71.5 million as of Sept. 30 and is generating positive cash flow. He said it will have enough funds to pay for its “sealift” bulk supply deliveries next year but not enough to fully repay maturing debt recently extended to June 30, 2021.
“We have the required consumables, materials and supplies to continue operating at current levels until the third-quarter 2021 sealift arrives,” he said.
In August, Shandong reported the appointment of Barrick Gold Corp. veteran Mark Wall as CEO of Streamers Gold Mining Corp. Ltd., its wholly owned subsidiary in Canada.
By Dan Healing in Calgary. This report by The Canadian Press was first published Dec. 22, 2020
