TMAC Resources says national security review extended

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TMAC Resources Inc. [TMR-TSX; TMMFF-OTC] on Friday November 27 said the security review under the Investment Canada Act (Canada) of its plan of arrangement with Shandong Gold Mining Co. Ltd. of China has been extended for up to 45 days.

Back in May, 2020, it was announced that Shandong, through its wholly-owned Shandon Gold Mining (Hong Kong) unit had agreed to acquire all of the outstanding TMAC shares they didn’t already own for $1.75 per share.

The total equity value of the transaction was reported to be approximately US$149 million on a fully-diluted basis.

Based in Shandong province, China, Shandong Gold ranks among the world’s largest gold producers by market capitalization. It reported production of 1.3 million ounces in 2019.

Shandong is an equal partner with Barrick Gold Corp. [ABX-TSX, GOLD-NYSE] in the Veladero gold mine in Argentina.

TMAC is a gold producer with a 100% stake in the Hope Bay gold project in Nunavut. The Hope Bay property covers a greenstone belt, which is 80 kilometres long and 20 kilometres wide and includes three camps with significant infrastructure, including 2,000 tonne-per-day processing plant, and underground developments at the Doris and Boston mines.

The Doris mine reached commercial production in June 2017. Ore from the Doris mine is treated at a processing plan at 2,000 tonnes per day. In a press release on October 14, 2020, TMAC said it produced 18,420 ounces of gold in Q3 2020 and 79,680 ounces year to date.

The company expects to mine between 268,000 and 273,000 tonnes of ore in 2020 and combined with processing stockpiled material, maintains its full-year production guidance of 95,000 to 100,000 ounces of gold.

Meanwhile, the Shandong transaction has received all the required regulatory approvals from government and the People’s Republic of China. “We believe the transaction has a strong overall net benefit to Canada,” said TMAC President and CEO John Neal.

It has been reported that Resource Capital Funds, Newmont Corp. [NGT-TSX, NEM-NYSE] and directors and officers of TMAC, collectively holding 58.6% of TMAC’s outstanding shares have pledged to back the Shandong transaction.

TMAC shares eased 1.6% or $0.02 to $1.20. The shares are currently trading in a 52-week range of $3.93 and $0.44.

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