Canada orders review of Shandong’s TMAC buy

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The Federal Cabinet of Canada has ordered a national security review of Shandong Gold’s acquisition of TMAC Resources, according to the Canadian-based company.

The Chinese-based company agreed to buy TMAC, owner of the Hope Bay mining project in Nunavut, for around $149 million in May.

The cabinet national security review, under the Investment Canada Act, raises concerns that the deal may not be able to close by a Feb. 8, 2021, deadline to complete the sale.

TMAC says it expects the deal to close in the first quarter of 2021 if it is approved.

The miner owns the Doris gold mine, the only operating asset in its Hope Bay property. The mine began commercial production in 2017 and had proven and probable mineral reserves totalling around 3.54 million ounces of gold at the end of 2019, according to the company’s website.

TMAC is in the early stages of developing a second underground mine at Hope Bay — Madrid North. It has also concluded a prefeasibility study on a production expansion at the Hope Bay property.

TMAC’s biggest shareholders include Newmont (NYSE: NEM) (TSX: NGT), the world’s no. 1 gold producer, and Resource Capital Funds.