Canadian Government stops gold mine sale to China's Shandong Gold Mining
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(Kitco News) - After conducting a regulatory review, the Canadian government is stepping in to stop the sale of one of the nation’s gold mines to a Chinese company.
Monday evening TMAC Resources announced that Governor in Council issued an order under the Investment Canada Act directing Shandong Gold Mining Co., Ltd. to not proceed with its takeover plan of TMAC Resources, including its Hope Bay mine in Nunavut.
“The Transaction between TMAC and Shandong will not proceed,” the company said. “TMAC and Shandong are in discussions regarding termination of the Transaction.”
The government’s decision comes after 97% of TMAC shareholders voted in favor of the takeover bid. Shandong offered to buy TMAC for US$149 million in May. The offer came as the Hope Bay mine has struggled to perform since production began in early 2017
“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,” said Jason Neal, president and chief executive officer of TMAC, in a statement. “We continue to believe that the Hope Bay gold belt holds substantial value with long life production potential that presents a significant development opportunity. We have developed and are currently evaluating mining and processing plant alternative scenarios with the objectives of reducing capital expenditures and financing requirements compared with the 2020 PFS while maximizing value.”