TMAC Resources Inc
TMAC Resources Inc
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(INVESTMENT)
Canadian mining companies seeking foreign investment to help grow their post-COVID recovery learn their deals will face increased scrutiny to protect national security.
Gold miner Agnico Eagle Mines is acquiring fellow Canadian explorer TMAC Resources via the $C286.6M ($2.20ps cash) acquisition of TMAC’s outstanding common shares, a deal that is up $0.45ps on the $1.75ps offered by Chinese company Shandong Gold Mining and rejected by Canadian authorities over concerns about a Chinese state-owned entity operating in the country's sensitive Arctic region.
The Canadian Govt has knocked back major Chinese gold miner Shandong Gold Mining’s $US150M takeover bid for TMAC Resources and its Hope Bay gold expansion project in the Kitikmeot region of Nunavut, Canada.
TMAC says it’s been informed the Governor-in-Council has issued an order under the Investment Canada Act (Canada) directing Shandong not to implement the plan of arrangement. “As a result, the transaction between TMAC and Shandong will not proceed,” TMAC president/CEO Jason Neal said.
Despite lower gold production from its 100%-owned Hope Bay mineral property in Ontario, Canada, TMAC Resources has jumped to a $C16.1M June 2020 qtr (Q2 20) profit from Q1 20’s $18M loss.
TMAC Resources has weathered its 1st full qtr of reduced operations at Hope Bay in Nunavut, Canada, in response to COVID-19, albeit with June 2020 qtr (Q2 20) gold production easing to 28,970oz from Q1 20’s 32,290oz, but sales up a little to 27,870oz from 27,710oz.
The result was on a mining rates plunging to 630tpd from 1,760tpd, but with the grade up to 11.6g/t from 10.2g/t. TMAC says Hope Bay is still operating at a reduced rate in response to COVID-19, slowing the mining rate significantly.
Increased gold production, sales and consequent higher revenue have seen TMAC Resources cut its Mar 2020 qtr (Q1 20) loss to $C18M from Q4 19’s $628.4M loss, a result that would have better without FX losses out to $16M from a positive $3.3M.
Canadian gold miner TMAC Res has staged a $610m turnaround, cutting its Q1 20 loss to $18M
(MERGERS & ACQUISITIONS)
State-owned Chinese miner Shandong Gold brings the finance and technical strength to advance Canada’s $1B-plus Hope Bay gold mine expansion through a $149M takeover of the project owner TMAC Resources.
Major Chinese gold producer Shandong Gold will take command of the Hope Bay project in Canada as it undergoes a planned $C1.28B underground expansion through an agreed takeover of its 100% owner TMAC Resources.
The $US149M deal, under which Shandong will pay $C1.75ps, a 52% premium to TMAC’s volume-weighted average pricE, follows a strategic review process that was always likely to result in a sale or merger of the company.
The PFS on TMAC Resources’ 100%-owned underground Hope Bay gold expansion project in the Kitikmeot region of Nunavut, Canada, envisages a total $C1.28B capex operation producing 3.1Moz of over an initial 15-year LoM.
The latest numbers include a pre-tax NPV5% of $549M and an after tax NPV5% of $486M, based on updated proven/probable mineral reserves containing 3.5Moz, measured/indicated resources of 5.2Moz and an inferred 2.1Moz.