Feds order national security review of TMAC-SD Gold sale

“TMAC and Shandong remain committed to working with the Investment Review Division to obtain approval of the transaction”

The federal cabinet has ordered a national security review of the sale of TMAC Resources Inc. to the Chinese mining giant Shandong Mining Co. Ltd. Due to COVID-19 measures, TMAC’s Hope Bay gold mine continues to operate at a reduced level and has brought new technology on site to test for COVID-19. (Photo courtesy of TMAC)

By Jane George

The federal cabinet has ordered a national security review of the proposed sale of TMAC Resources Inc., which owns the Hope Bay gold mine in western Nunavut, to the Chinese state-owned Shandong Mining Co. Ltd., TMAC said today.

“TMAC and Shandong remain committed to working with the Investment Review Division to obtain approval of the Transaction,” TMAC said in a release issued Thursday, Oct. 15.

Under the Investment Canada Act, the government continues to look at whether the deal with Shandong (SD Gold) is likely to increase employment in Canada, as well as its economic and other impacts.

But the Investment Canada Act also allows Ottawa to review a transaction for national security reasons.

Navdeep Bains, Canada’s minister of innovation, science and industry, had extended the timeline to determine whether to start a national security review until Oct. 19.

The final decision on the proposed sale, first revealed in May, is expected by Feb. 8, 2021, which TMAC said is “the extended outside date in the arrangement agreement” for the transaction.

On June 26, shareholders of TMAC approved the sale of the company to an affiliate of SD Gold.

The Kitikmeot Inuit Association, which represents five communities in western Nunavut and is a TMAC shareholder, abstained from voting on the proposed sale in June due to uncertainty about how the sale would affect Inuit.

But then on June 30, TMAC received a final order from the Ontario Superior Court of Justice approving the transaction.

TMAC said the transaction has received all the required regulatory approvals from the government of the People’s Republic of China.

But closing of the transaction is subject to the receipt of “all required regulatory approvals and the satisfaction or waiver of all closing conditions,” TMAC said its release.

One of those closing conditions of the sale has been a site visit by SD Gold, which has not yet taken place, due to a recent outbreak of COVID-19 at the mine site.

The Hope Bay goldfield lies about 125 km southwest of Cambridge Bay. (File photo)

With the recent COVID-19 outbreak at Hope Bay now contained, the western Nunavut gold mine said earlier this week that it sees itself operating at reduced levels “for the foreseeable future.”

The mine, 125 kilometres southwest of Cambridge Bay, operated at a reduced level due to COVID-19 after it sent about 60 Nunavut based-workers home last March.

TMAC plans new on-site COVID-19 rapid testing and contact tracing, said the company’s president and CEO Jason Neal said in a news release issued earlier this week.

The COVID-19 cases at Hope Bay numbered 14 positive and two presumptive positive, Neal said in Oct. 14 news release, a tally similar to that announced on Oct. 8 by Nunavut’s chief public health officer.

The company has now ramped up its new on-site rapid testing device for COVID-19, Neal said.

And it plans to deploy new contact tracing technology. If there were another COVID-19 case, this would enable the infected individual’s contacts to be quickly traced and isolated.

The crew change at the mine was finally completed on Oct. 12, after a delay of 13 days due to the recent outbreak of COVID-19 at the mine, Neal said.

“All individuals with positive cases have now returned home, while a team at site disinfected and cleaned the camp before the current crew arrived,” Neal said.

Neal said that, “There is no material risk of COVID-19 transmission to local Kitikmeot communities as Hope Bay is geographically isolated from these communities. ”

The Nunavut workers who had been sent home saw their employment with TMAC terminated on Sept. 27, at the end of the 180-day temporary layoff period, the release said.

“Our top priority remains the well-being of the affected workers and the rest of the workers at [the] site, while working towards rehiring Kitikmeot-based workers as soon as permitted,” Neal said.

Meanwhile, Neal said TMAC is evaluating the operating schedule for the processing plant.

“It is expected that there will be no impact on the planned number of processing days in the fourth quarter,” Neal said in the release.

He said the mine expects to produce sufficient ore, combined with low-grade stockpiles, to be able “to operate at a reduced level for the foreseeable future and until at least the 2021 sealift.”

By then, the outcome of the proposed sale of TMAC to SD Gold should be clear.

TMAC said at the end of July 2020 the company started to operate the processing plant for three weeks at a time, producing 18,420 ounces of gold in the third quarter out of 79,680 ounces in the year to date.

Over the past year, TMAC has sold 27,650 ounces of gold. Today, the price per ounce of gold is $US1,900.

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(7) Comments:

  1. Posted by Bob’s Your Uncle on

    Stop selling our Resources to China!

    • Posted by Tell it to the Canadian owners on

      It’s not like China is robbing a mine from someone, or forcing the sale to happen… The slogan rings hollow when you realise it’s Canadian miners selling this to the Chinese of their own free will to make themselves some more money.
      .
      It’s good to keep an eye on other countries involvement in our resources, but you have to have a proper understanding of what’s happening to be effective in criticisms.
      .
      Canadian mining companies are notoriously poorly regarded across the world, and Canadian miners want to make this sale. So it’s not China’s fault for backing a purchase, and they aren’t doing anything devious in regards to this deal.
      .
      Canadian capitalists want to enrich themselves, China is answering the call. If you have an issue with that, take it up with the Canadian company who wants this to happen.
      .
      “Don’t hate the player, hate the game.”

      • Posted by Tyrion Lannister on

        Your post is based on a long string of false premises and non sequiturs.
        But the worst part is your callous disregard for human rights.
        First, Shandong is owned and controlled by the Peoples Republic of China, a brutal authoritarian one-party state. It’s well-known that the PRC uses its state-owned companies to advance its foreign policy. They are not garden variety “capitalists.” This is Chinese state capitalism.
        Second, this mine is located on the Northwest Passage in a strategic location. No one doubts that the PRC will use this to extend Chinese influence over a section of the Arctic that is sovereign to Canada and where Inuit hold land rights.
        Third, China’s vicious human rights violations are well documented, including the cultural and physical genocide of the Uyghurs in Xinjiang province. This is a crime against humanity that compares with the worst practices of Stalin and Hitler. The repression in Hong Kong and Tibet is just as bad.
        Canada and our allies must impose sanctions on China and its state owned companies to send a message that its behaviour is not acceptable.
        By the way, this mine is not owned by “Canadian capitalists.” The largest shareholder is Newmont which is an American company.
        Altogether, your post is a good example of the kind of pseudo-progressive, pseudo-leftist rhetoric that actually betrays the left’s proud history of internationalism and advocacy of human rights. You really need to improve your education.

      • Posted by GOT Roasted… see what I did there? on

        Did that character from an incestuous, dragon show ever roast you!!

      • Posted by Bob’s Your Uncle on

        Ahhhh….I was wondering how long it’d take a Chinese propaganda mouthpiece to pop up and defend the motherland….Wolf Warrior Diplomacy in action!

        Don’t buy China – Don’t sell to China. Period!

  2. Posted by Two Michaels on

    Only when the two Michaels are free from China, should any proposals be considered.

  3. Posted by Simple Logic on

    SD Gold is the Chinese Government. It isn’t a private company, or publicly owned. Why would the Chinese, with their immense power and wealth want a 27,000 ounce gold producer? That’s not even pocket change to them. It’s lint in your pocket.

    But they ARE immensely interested in northern Canada, and the northern passage. Every single purchase or investment the Chinese make, worldwide, is to further the interests of the Chinese machine, plain and simple.

    China would not allow Canada, or any other country, to purchase and operate within their borders anyways, so it should be simple. If it isn’t allowed in your country, it isn’t allowed in ours. There is zero separation between the interests of a Chinese company and Chinese government – it’s the same thing. Stay away…FAR away from this. If the Trudeau government doesn’t see this for what it is, then just eliminate our borders and sovereignty all together. They will exploit the Inuit through corruption and schemes. They will use this as the old “wolf in the hen house” technique and that will be that.

  4. Posted by Truck driver on

    Have they started on that road for the Chinese mine yet? Haven’t heard.

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