By Dan Healing, The Canadian Press on January 5, 2021.
TORONTO – Stock in gold miner TMAC Resources Inc. jumped 40 per cent on Tuesday after it announced a deal to be sold to Canadian gold miner Agnico Eagle Mines Ltd. for $286.6 million.
TMAC shares on the Toronto Stock Exchange quickly rose 63 cents to match the $2.20 per share being offered by Agnico Eagle. They closed at $1.57 on Monday.
The Agnico Eagle price represents a 25.7 per cent premium over the $1.75 that shareholders would have received had the company’s sale to China’s Shandong Gold Mining Co. Ltd. been allowed to go ahead.
The federal government blocked that deal late last year following a review under the Investment Canada Act.
TMAC chief executive Jason Neal called the Agnico Eagle deal a great outcome after a year of uncertainty due to the company’s precarious financial position and uncertainty about whether Ottawa would allow the sale to Shandong to proceed.
“I am very excited to welcome Agnico Eagle to Hope Bay,” he said, referring to TMAC’s gold mining project at remote Hope Bay in Nunavut.
“Our company spent almost the entirety of 2020 under the uncertainty of a strategic review process and the Canadian government review of the sale to Shandong, with an impending debt maturity, compounded by the anxiety of the global pandemic… The acquisition being completed by Agnico Eagle is a great outcome for all stakeholders.”
On Tuesday morning, Agnico Eagle shares fell by as much as three per cent or $2.94 to $93.27.
“We are very pleased to have the opportunity to bring our extensive northern operational and community experience to the Hope Bay Mine and the Kitikmeot Region of Nunavut,” Agnico Eagle CEO Sean Boyd said in a statement.
“Together with the TMAC team and our Nunavut partners, we look forward to advancing exploration and expansion initiatives to realize the full potential of the mine and its large unexplored land package.”
About 97 per cent of TMAC’s shares were voted in favour of the Shandong deal in June, but it was blocked by the federal government late last month following a review under the Investment Canada Act.
The companies said the sale to Agnico Eagle will not require a new shareholders meeting.
This report by The Canadian Press was first published Jan. 5, 2021.
Companies in this story: (TSX:AEM, TSX:TMR)