Agnico Eagle announces agreement to buy TMAC Resources for $286M

Feds rejected bid by Chinese state-owned company in late December

The Hope Bay goldfield, operated by TMAC Resources, lies about 125 kilometres southwest of Cambridge Bay. TMAC and Agnico Eagle have announced a deal for Agnico Eagle to buy TMAC. (File photo)

By Mélanie Ritchot and Randi Beers

Updated at 6:15 p.m.

TMAC Resources has found a buyer, a mere two weeks after the federal government quashed a proposed sale of the Nunavut gold-mining company to Chinese-owned Shandong Gold Mining Co. Ltd.

Agnico Eagle Mines Ltd., which operates other gold mines in the territory, will buy TMAC instead. The move will stabilize TMAC’s Hope Bay mine, open the door to expansion and create more jobs in the territory, Agnico Eagle CEO Sean Boyd said.

The two companies issued a news release Tuesday announcing a deal worth $286 million for Agnico Eagle to acquire TMAC, which had been searching for a buyer for nearly a year. The sale price is 26 per cent more per share than Shandong had agreed to pay last year.

TMAC Resources operates the Hope Bay gold property in western Nunavut. Agnico Eagle operates gold mines near Rankin Inlet and Baker Lake.

Boyd said in a news conference Agnico Eagle’s first priority is to do more exploration and that it is confident it can turn Hope Bay into a “stable, larger, longer-life operation that is going to benefit all of Nunavut.”

TMAC Resources CEO Jason Neal also said the Hope Bay property has an “extraordinary amount of potential.”

“I don’t think anybody would be surprised if it ran for 50 years or more,” said Neal.

More exploration and eventual expansion would mean more jobs and training opportunities which TMAC did not have the resources to offer on its own, as a one-asset company, said Neal.

“The multi-generational impact that can make on communities is just outstanding,” he said.

Boyd said Agnico Eagle would like to see its number of Inuit employees “increase significantly” and confirmed all current employees will keep their jobs through the acquisition.

There are 140 employees at the Hope Bay mine now, but its pre-pandemic capacity was 345.

Martin Plant, the Nunavut VP of Agnico Eagle, said “it is really one of our core values to increase the number of Inuit employees on site.”

Last January, TMAC Resources announced it would need new investment in order to expand its mining operations along the gold field, which measures 80 kilometres by 20 kilometres — covering more than twice the area of Toronto. The company’s executive entered a strategic review of operations and ultimately decided to put TMAC up for sale.

In May, TMAC announced Shandong was willing to pay $207 million for the company. The federal government reviewed the proposal, with an eye on national security concerns, economic and other impacts. On Dec. 22, the government announced its rejection of the deal.

Agnico Eagle has called on the federal government to help build mining infrastructure in Nunavut over the last few years.

Now, Boyd said discussions with the government have been encouraging and things like renewable energy, wind farms and high-speed internet might be on the table, but it’s “still too early” to tell.

“It’s totally different than it was a few years ago where it was a struggle to get them to pay attention to what we were doing in Nunavut,” he said, adding that this could be because of the Chinese-owned company showing an interest in Hope Bay.

The deal announced Tuesday is an amended version of the arrangement TMAC had previously struck with Shandong. It’s subject to approval under the federal Competition Act. According to the release, TMAC will seek approval to substitute Agnico Eagle as the purchaser before the Ontario Superior Court of Justice via Zoom on Jan. 20.

The two companies have agreed to attempt to finalize the transaction on or before Feb. 8, according to the release.

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(7) Comments:

  1. Posted by The Old Trapper on

    My comments on 22DEC20;
    “With the price of gold well over $1,800 USD per ounce TMAC should be able to raise sufficient funding for continued operations. If the gold reserves are in the ground then there will be investors willing to risk their money for mine expansion.”
    TMAC investors are happy, they get $2.20 per share vs the $1.75 Shandong was willing to pay. KIA should be happy, more money and a company that has shown respect to Inuit through their actions. The GN should be happy, more jobs for Inuit, not Chinese nationals.
    And Canadians should be happy. The federal government acted in the best interests of Canadians. They need to do this more often.
    Well done.

    • Posted by WellDone? on

      Why did TMAC entertain selling to the Chinese for less then what a Canadian company is giving them now?

      Why first dibs to the Chinese?

      • Posted by anon on

        It might have been the only offer they got at the time.

        • Posted by Chinadiot on

          NTI politicians need to change or wake up. It seems only China knew about the sale.

      • Posted by JanPhimself on

        Or for further calculation of the resource management globally and debate in the Nunavian/ NWTian/ Canadian positions in local, territoral as national ‘deeper argumentation’ like Chinese do?

  2. Posted by I live in the Arctic on

    very good news for all canadians.

  3. Posted by Colin on

    Mining is now high tech. But GN does nothing to train mining engineers, geologists and the specialists the industry needs. Education and skills training needs to start in the early years of schooling. Inuit should be the managers and professionals in their own lands.

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