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Ottawa rejects sale of Hope Bay to Chinese mining company

The Canadian government is refusing to allow the sale of TMAC Resources and its Hope Bay gold mine to Shandong Gold Mining, a Chinese state-owned company.

Ottawa announced the results of its national security review on Monday. Shandong had offered $230 million to purchase TMAC in May, which was later accepted by TMAC shareholders, but the Kitikmeot Inuit Association never endorsed the deal.

Shandong Gold Mining’s bid to take over operations at the Hope Bay gold mine, 125 km southwest of Cambridge Bay, will not be approved by the federal government.
photo courtesy of TMAC Resources

Jason Neal, president and CEO of TMAC, stated, “While we are disappointed with the outcome, we are very pleased that
TMAC achieved significant operation improvements at Hope Bay. 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 had a $71.5 million cash balance as of Sept. 30 and is generating positive cash flow, Neal noted. He expects that the company will have sufficient financial resources to fund the 2021 sealift, but he projects TMAC will fall short of being able to repay maturing debt that is due on June 30, 2021.

Neal added, “I would like to thank the TMAC employees and contractors for their hard work and dedication this year as we have dealt with the unprecedented Covid-19 pandemic and the uncertainties of the transaction, while concurrently improving our safety performance and productivity. I would also like to thank the Inuit communities and leadership of Nunavut, our business partners and other stakeholders for their patience during the regulatory review process.”