Ottawa reviews TMAC sale to China miner
Sale of Arctic gold mine to Shandong raise security concerns North of 60 Mining News – October 16, 2020
Last updated 10/15/2020 at 1:32pm
TMAC Resources Inc. Oct. 15 announced that Ottawa has ordered a national security review of Shandong Gold Mining Co. Ltd.'s acquisition of TMAC and its Hope Bay gold mine in the Kitikmeot region of northwestern Nunavut.
Under a definitive agreement announced in May, Shandong Gold Mining (HongKong) Co., an overseas subsidiary of the state-owned Chinese gold mining company, would pay roughly US$149 million (C$208 million) to acquire all TMAC shares.
The sale of a producing gold mine that lies along the Northwest Passage in Canada's Arctic to a company owned by a Chinese government with Arctic ambitions has raised national security concerns among many Canadians.
"This purchase should not go forward," said Richard Fadden, who previously served as national security adviser to Canada Prime Minister Justin Trudeau and former Prime Minister Stephen Harper. "They are clearly adversaries, and I think we have to take that into account every time they seek to buy something."
TMAC and Shandong argue that the transaction has a strong overall net benefit to Canada and does not pose a security risk.
Those in Nunavut, which want to see the Hope Bay gold mine succeed, have been less inclined to turn down the mining experience and financial wherewithal that SD Gold would bring to the operation.
"The benefits of Shandong's investment in Nunavut have a potential value of hundreds of millions of dollars. My community needs these benefits," said Leona Aglukkaq, a TMAC Resources director and former member of the Nunavut parliament.
TMAC shareholders agree, voting 97% in favor of the sale to Shandong.
TMAC had planned to close the sale to Shandong during the first quarter of 2021. The national security review and extended federal government timelines due to COVID-19, however, may mean the regulatory review process and an Investment Canada Act decision may not be reached by the Feb. 8, 2021 outside date outlined in the agreement.
TMAC and Shandong said they remain committed to working with the federal investment review division to obtain approval of the transaction.